Fyffes grows revenue to €1bn

Fyffes has generated revenues of over €1bn for the first time in six years.

The Dublin-headquartered fruit importer yesterday reported total revenue — including its share in joint ventures — of just under €1.02bn for 2012; up by 19.7% on the €850m generated in 2011. It marks the first time sales have passed the €1bn mark since the group split from its general produce arm, Total Produce, in 2006.

Fyffes chairman David McCann said the 2012 performance was “very strong”, saying it was driven by continued organic growth, and also reflected “further operational efficiencies, particularly in logistics”.

Group revenue excluding joint ventures and associate contributions rose 19% to just under €784m. The group’s pre-tax profits surged 117% from €12.5m to €27.1m; with operating profits rising by over €15m to €28.3m. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 38.4% to €41m.

Last year’s growth was driven by Fyffes’ banana unit, although an impairment charge of €2.8m was taken on certain production assets in the division. Elsewhere, good growth was also seen in the pineapple and melon categories.

In terms of current trading, management said 2013 has seen conditions “broadly in line with expectations”. The group added said it is maintaining its EBITDA target of €27m-€33m for 2013.

“The group continues to pursue necessary increases in selling prices to offset the impact of cost inflation and unfavourable exchange rates,” the company said in a statement yesterday, adding that it also remains focused on achieving further growth, “both organically and through strategic acquisitions and alliances”.

Analyst reaction to Fyffes was positive, with Davy suggesting capital allocation will be the group’s key driver of future returns. Ending 2012 with a strong net cash position of €8.6m should see the company look for more strategic acquisitions, according to Davy. NCB said Fyffes was currently undervalued.

Earlier this week, Total Produce said it would be pursuing more investment opportunities this year on the back of a better-than-expected 2012 which saw it register an 11% increase in revenue to nearly €3bn and a 19% rise in adjusted pre-tax profits to €47.3m.