Fyffes shares up 10% on marked earnings upgrade
In a brief trading update yesterday, the company said it now anticipates full-year earnings before interest, tax, depreciation, and amortisation of €55m to €61m.
This is up by around 23% on the previous €44m to €50m range guided. Furthermore, earnings before interest, tax, and amortisation guidance has been increased by 21% to a €44m to €50m range, from €36m to €42m.
Management said the company has continued to perform well in the year to date (it previously released an upbeat first quarter statement in April), which has seen it secure necessary selling price increases for banana and pineapple product in response to currency headwinds.
The company said the price change shows its ability to quickly adapt to prevailing market conditions and demonstrates its “robust business model”.
“Fyffes is confident about the future prospects of its business and is well-placed to compete strongly in its key markets, following important strategic and operational developments in recent years,” the trading update said.
“Management’s goal of moving the business to a higher and more sustainable earnings base is playing out. Similar to last year, the magnitude of the Fyffes upgrade is significant and is mainly driven by increased pricing in the banana category,” said Declan Morrissey of Davy Stockbrokers.
Goodbody Stockbrokers yesterday raised its 12-month price target for the stock from €1.27 to €1.50. Fyffes’ share price was yesterday around €1.30 mark.
