Fyffes slams costs in €35.2m profits announcement

Food distribution company Fyffes has made a before-tax profit of €35.2m for the first six months of the year, down from €74.7m in the same period last year.

The interim dividend of 1.69c remains unchanged.

Chairman Carl McCann said: "Fyffes is pleased to report first half results ahead of its previous expectations set out in a trading update at the end of June.

"The group’s trading performance for the first six months of the year reflects the impact which the changes in the EU's banana import regulations, combined with significant cost inflation, are having on the industry."

Total revenue for the first six months of the year, including the Group’s share of its joint ventures and associates, was €1.18bn compared to €1.1bn in the same period last year, an increase of 5.9%.

Sales in the group’s tropical produce division, net of inter-segment revenue, increased to €251m in the first half, from €208m in 2005. Fyffes said today that this reflects in particular the contribution from Turbana in north America, in which the group acquired a 50% stake in late 2005, combined with higher pineapple sales as a result of increases in volume.

Turnover in the group’s general produce and distribution division amounted to €926m in the first half of 2006 compared to €903m in the same period last year. Fyffes said this was down to both organic growth and the benefit of a number of bolt-on acquisitions during the past year.

Following approval by shareholders at an EGM on May 9, Fyffes completed the demerger of its property undertaking to Blackrock International Land plc, a new separately-quoted property company listed on the AIM market in London and IEX market in Dublin.

Under the demerger arrangements, Fyffes transferred properties to Blackrock with a market value of €195m together with its interest in a joint venture property undertaking with a net asset value of €2.4m.

Fyffes also announced today that, subject to shareholder approval and other consents, it intends to demerge its general produce and distribution business into a new, separately-quoted company to be owned 100% by Fyffes’ shareholders. This new company will be listed on the Irish Stock Exchange’s IEX market in Dublin.