Total Produce upbeat despite revenue dip

Total Produce positive as revenue and pre-tax profits dip

Fruit distributor Total Produce has hailed a “robust” performance for 2014, despite seeing a dip in both pre-tax profits and revenues, and is continuing to look at further acquisition opportunities.

The Dublin-based company, spun-out from banana producer Fyffes seven years ago, yesterday reported total revenues of just under €3.13bn for 2014; marking a 1.4% decline on the previous year.

Pre-tax profits were down by just over 8% at €44.3m, with adjusted pre-tax profit down by 3.3% to €51.2m. The latter figure excludes acquisition-related intangible asset amortisation charges and costs, fair value movements on contingent consideration and exceptional items. It also excludes Total Produce’s share of these items within joint-ventures and associate firms.

Last year saw Total Produce invest more than €22m in investments across Europe and north America. In Europe it ranks as the premier fresh produce distributor.

Post year-end, it completed its fourth north American investment, via a 50% equity stake in Canadian fresh produce company Gambles. More investment is likely, according to management.

“The group actively continues to pursue further investment opportunities”, chairman Carl McCann said yesterday, adding that management is targeting adjusted earnings per share for 2015 in the range of 9.2c to 10.2c.

Adjusted fully diluted earnings per share, for 2014, was one of the few areas where the group saw financial growth, with a figure of 9.45c representing a 4.5% annual increase. Group revenue grew by 1.1% to almost €2.67bn, while operating profit before exceptional credits crept up by 0.1% to €47m. Group revenue excludes Total’s share of joint-venture and associate company sales.

European market revenues were down by 5%, largely impacted by Russia’s ban on EU product imports.

“Total Produce has delivered a robust performance in 2014 and is pleased to record a 4.5% increase in adjusted earnings per share in a mixed year for the fresh produce industry,” Mr McCann said.

Analysts were in agreement. Declan Morrissey of Davy Stockbrokers noted the figure surpassed his company’s earnings per share forecast by around 6%; and Goodbody calling it a strong performance in difficult market conditions.

“Trading on around 6.4 times enterprise value/earnings before interest, tax, depreciation and amortisation, with a robust balance sheet and strong cashflow conversion, we believe the stock is undervalued,” said Goodbody’s Liam Igoe.


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