Fyffes on track for a bumper full year

Fruit importer Fyffes is on track for a bumper year after recording a 30% increase in profits for the first half of the year.

The company’s profits before tax for the first half of the year to Jun 30 were €22.4m, with the group’s total revenue amounting to €550m.

Fyffes chairman David McCann said that the strong set of figures were as a result of strong growth across the company’s products.

“Fyffes has delivered a strong increase in profits for the first half of the year, driven by further organic growth in each of its product categories.

“Earnings per share also benefited from the significant repurchase of shares in 2011. Fyffes is increasing its 2012 full-year target EBITA range to €28m-€33m from €25m-€30m previously.” he said.

One of the key drivers of the fruit company’s growth has been the strength of its tropical fruit division, with bananas in particular driving the increased profits.

In all of the tropical fruit divisions Fyffes increased its profits by restructuring its shipping and an increase in average selling price that has been a result of volatility in the market.

The operating profit on bananas increased by €3.9m despite facing a challenging foreign exchange market and increased fuel prices.

Fyffes’ pineapple business increased by 8% in volume and savings on the route to market have increased profits.

The US-based melon business has also recorded strong growth.

Production capacity increased during the period through the purchaseof an additional farming operation in Guatemala and its marketing reach was expanded with the opening of a sales office on the US west coast.

Based on the figures, Fyffes are upgrading their targets for the year.

NCB analyst Darren Greenfield said that based on these figures, Fyffes share were under-valued.

“While Fyffes profits can be volatile, we believe the stock is trading below fair value,” he said.