E Coli outbreak dampens profits at Total Produce
Published 07/09/2011 | 05:00
THE E Coli outbreak in the early part of the summer held back Total Produce during the first half of the year, after the company reported flat half-year profits yesterday.
The company, which was spun out of Fyffes some years ago, said profit for the six months to June 30 rose marginally to €16.7m from €16.2m a year earlier on the back of revenue that was unchanged at €1.33bn. There was no change to the dividend but adjusted earnings per share rose 2pc to 4.2c. Company chairman Carl McCann said the company had produced a "solid" performance for the year so far.
Mr McCann added: "The group's interim dividend is unchanged at 0.54c per share.
"Based on current trading conditions, the group continues to target adjusted earnings per share in the range of 6.5c to 7.5c per share for the full year.
"The group continues to actively pursue further investment opportunities in both new and existing markets."
Sales were flat as was revenue from the fresh produce division. The eurozone area suffered a €1.5m hit from the E Coli outbreak and the group fears a similar effect in the second half of the year.
The results were broadly welcomed by analysts. NCB's Darren Greenfield said: "The company maintained its guidance of 6.5 -7.5c for the full year. Its valuation remains very undemanding given the low-risk nature of its business model and its strong balance sheet. We reiterate our buy recommendation."
Davy's Aiden O'Donnell added : "In what the company has described as an unusual trading period, the H1 out-turn is solid. Cash-flow generation remains robust, and for us the current valuation is an attractive entry point."
Total Produce closed up 2.7pc at 38c.