Fyffes report 30.4% rise in profits

FYFFES has reported a 30.4% year-on-year increase in first-half profits and has maintained its guidance for the full year.

Adjusted pre-tax profits for the first six months of the year came in at €17.3 million, up from the €13.3m reported for the corresponding period last year.

The Dublin-headquartered fruit distribution giant also reported a €6.3m increase in interim operating profit to €16.45m and a 30.5% rise in adjusted earnings per share to 4.41c. Group revenue for the period was up by 7.5% year-on-year to €370m.

When Fyffes’ various joint ventures are included, revenue was up by nearly 14% at €458.5m.

The interim dividend for shareholders has been recommended at just over 60c; an increase of 10% on the previous year’s first-half payment.

Fyffes saw a healthy increase in volumes in its US-based melon operations and the company also made what it called “further progress” in the pineapple category (meaning that this part of Fyffes’ business broke even) during the period, despite trading conditions in this sector being relatively difficult in the US and Europe, due primarily to excess market volumes.

However, the main driver of the overall figures was a strong performance in the core banana category — operating profit in this part of the business was €4.2m higher than a year earlier, thanks to better weather and a lack of excess market supplies.

Overall, said Fyffes chairman David McCann, trading conditions in the first half were “generally positive for much of the period”, leading them to maintain their earnings target of between €20m and €24m for the full year.

Despite this, and the strong results, Goodbody Stockbrokers said yesterday, that they are unlikely to alter their profit forecast for Fyffes, which is currently at the lower end of that €20m-€24m scale.

Back in May, Fyffes upped its earnings forecast from a €17m-€22m scale.

Fyffes — whose share price was up by 6.6% yesterday to 39 cents — also said that its 40% share of the net after-tax profit of property spin-off, Balmoral International Land, amounted to €400,000 for the period, compared to a loss of €900,000 for the first half of 2010.