Total Produce raises annual earnings outlook

Irish fruit distribution company Total Produce has raised its earnings outlook for 2017 after seeing a continuation of its strong trading performance in the first four months of the year.

Chairman Carl McCann also reiterated to shareholders at the company’s AGM in Dublin that mangement is continuing to pursue “attractive acquisition opportunities” in order to further expand the business.

The company — which grew revenues last year by 9% to €3.76bn and profits by 17% to €67.7m — said trading for the first four months of 2017 has been “satisfactory”. On the back of that, management has raised its full-year earnings expectations — now saying it expects adjusted earnings per share, for 2017, to come in at the upper end of the previously-announced 12c-13c range.

Total Produce is the former general produce arm of banana giant Fyffes, which sold out to Japan’s Sumitomo group for €751m at the turn of the year.

Total recently upped its stake in Canadian produce group Oppenheimer, an extra €28.4m spend on another 30%, taking its total shareholding to 65% and its investment in the business to €43.4m. The Irish company spent €60m on acquisitions last year, in Europe and North America, with those buys expected to boost group 2017 revenues to over €4bn.

“We expect organic growth and acquired growth to help deliver guidance in 2017 and 2018,” said Darren McKinley, an analyst with Merrion Stockbrokers.

Davy Stockbrokers analyst Roland French said: “The group’s balance sheet remains healthy and this will enable the group to continue to operate its self-funded and value-accretive M&A strategy.”

“The group has a track record of delivering consistent earnings growth, whilst maintaining double-digit returns and ample balance sheet firepower.”

Total Produce’s share price rose by over 3% yesterday, but remains down 13% this year. However, over the past 52 weeks it has risen by 63%. The company is also due today to pay out an annual dividend per share of 2.23c, marking a 10% year-on-year increase.


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