Fyffes back on track with eyes on Europe

FRUIT importers Fyffes has produced first half results in line with market expectations.

But the group played down rumours it might bid for Chiquita now coming out from under Chapter 11 in the US.

Deputy chairman Carl McCann said its acquisition focus will be in Europe.

Some time back Fyffes was linked strongly to Chiquita when it was the subject of much takeover speculation after it hit financial difficulties.

Mr McCann said at the time the group saw itself as "part of the solution" in the global fruit and vegetable distribution market, without being specific about its plans, if it had any, to bid for the ailing Chiquita.

He yesterday told RTÉ Fyffes will be focusing its strategy on the European market, suggesting there has been a decline in interest in the US.

Results for the six months ended June 30, 2002 show the group's pre-tax profits rose 5.8% before exceptional items from 36.8m euro to 38.9m euro.

The group's profit margin rose from 3.59% to 3.93% reflecting significant cost cutting within the organisation where savings of over 20m euro have been made since the cost cutting was initiated in 2000 when profits had slumped to 7.7m euro at the pre tax level.

As a result of the disposals, sales fell from 1,048.8m euro to 930 as the group continued to trim its operational base.

Gone are JA Kahl of Munich, sold off in November and Sofiprim SA in Paris, off loaded in April of this year.

Combined the two have an annual turnover of 115m euro and their impact on the first half in terms of lost revenue amounted to 40m euro.

Earlier disposals of Fyffes Multifresh in the UK and the group's Capespan joint venture in August 2001 resulted in an additional turnover of 43m euro being shed from the first half figures.

Various senior staff members yesterday made it clear the group was back on the acquisition trail after reaping the benefits of its cost-cutting drive.

Over the last two years Fyffes put its efforts into getting the business back in shape after the worldoffruit.com debacle that cost it dearly not just in money terms but in credibility terms also.

Dublin-based Fyffes is Europe's biggest fruit and veg importer. In 2002 it incurred losses of 13.7m euro.

To recover it shut ripening units in the UK, exited joint ventures and sold its shipping business.

Fyffes bought a 70% stake in Czech produce distributor Hortim International earlier this month for over 22m euro but still has well over 160m in cash to fund any acquisitions it wants to make going forward.