Fyffes sticks by earnings forecast after strong start
Published 03/09/2016 | 02:30
Irish fruit firm Fyffes has reaffirmed its earnings estimates for the full year after the firm posted a strong first half to its financial year.
Total revenue during the period increased by 14.7pc to €739.3m, which included its share in joint ventures.
Meanwhile, its own business also reported a strong surge in revenue, up 16.6pc.
Earnings before interest tax depreciation amortization (EBITDA) rose by 11.3pc to €44m with the company standing over its EBITDA targets for the year.
In April Fyffes targeted a full-year EBITDA of between €63m and €69m for the full year.
The company has also raised its interim dividend by 10pc to 0.9c per share off the back of earnings per share of 10c during the six months.
In April Fyffes spent just under €100m for US mushroom business Highline Produce.
Highline is the fourth biggest mushroom producer in the US and at the time the company signalled its ambition to move for more companies.
Fyffes chairman David McCann has been pleased by the acquisition.
"Highline has performed in line with our expectations for the three-month period post acquisition," Mr McCann said in a statement.
" The first-half results in the group's other product categories were in line with the same period last year in aggregate, with strong performances in the pineapple and melon categories," he said.
Overall Mr McCann was pleased by the firm's performance despite adverse currency movements in the value of sterling against both the euro and the dollar.
Profit before tax at the half-year point amounted to €35.5m up 4.5pc year on year.
The firm also outlined its intention to start buying back shares in the market after receiving shareholder approval back in April.
Net debt at the firm rose by around €60m to €99.1m due in most part to the company's spend on acquisitions.
Goodbody analyst Patrick Higgins said that despite Fyffes interim results coming in below their expectations, the firm did demonstrate its resilient business model.
"The foreign exchange driven volatility in the banana business was broadly offset by its two other categories enabling the group to maintain full year guidance.
"This has been diversified further through the acquisition of Highline Produce," Mr Higgins said.
"We retain our view that the stock is undervalued and reiterate our positive stance on the group," he added.