Total Produce in strong update

FRUIT distributor, Total Produce has reiterated its full-year earnings per share guidance of between 6.5c and 7.5c, for 2011.

In a short trading update, published yesterday, the company said that it is in a strong financial position and “continues to pursue attractive acquisition opportunities”.

Total Produce — the former general produce and distribution arm of fruit giant Fyffes — listed as a separate entity, on both the IEX (now the ESM) in Dublin and the AIM in London, four years ago.

Yesterday’s update comes just two months after the company issued a strong set of full-year results for 2010; showing an 18%/€5 million increase in pre-tax profits to €33.6m and a rise in revenue from €2.43 billion to €2.6bn. While earnings per share for 2010 rose by nearly 6% to 6.84c; the guidance of between 6.5c and 7.5c set at that point marked a marginal upgrade.

Those 2010 figures also showed that Britain was Total Produce’s only under-performing non-Irish based division last year (the company has a presence across mainland Europe and in Scandinavia), even though some growth was evident in its key soft fruit business there.

While the company has the funds for a sizeable acquisition, further smaller bolt-on buys are all that is expected for now, as it looks to expand further in its existing European locations.

Market reaction was positive to yesterday’s guidance reiteration.

Bloxham Stockbrokers said that, given recent upbeat comments from Fyffes, the Total Produce earnings per share figure for 2011 should be closer to the top-end of the range, despite rising green banana prices.

“In addition, the group retains a strong balance sheet that provides the resources for acquisition-led expansion. Despite being the largest fresh produce distributor in Europe, Total Produce’s share is only 5%, so the scope for growth is significant,” Bloxham said.

Davy Stockbrokers, meanwhile, has reiterated its own “outperform” rating on Total Produce.

It forecasts earnings per share of 7.2c for Total this year.


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