Shares in Fyffes jump 4pc as high prices lift first half
SHARES in Fyffes jumped more than 4pc yesterday after high banana prices helped boost half-year profits by nearly a third.
The company said adjusted profits before tax rose by some 30.4pc to €17.3m on the back of revenue that rose 13.9pc to €458.5m. Earnings per share rose by more than 30.5pc to 4.41c, while the dividend rose by 10pc.
The company was boosted by high prices for bananas, particularly on the continent, after poor weather in a number of regions cut production during the early part of the year. Despite a weakening in the market during the summer, growth overall remained strong.
Profits were also helped by comparisons with what Fyffes called "the exceptionally difficult trading conditions which prevailed during the early months of 2010".
Fyffes also reported "further progress" in pineapple and melon sales. The group earned €400,000 from its 40pc share of Balmoral International Land.
The results were broadly welcomed by analysts -- in particular that fact the company was maintaining its guidance for full year EBITDA of between €20m and €24m.
"Fyffes has produced a strong set of interim 2011 results. More importantly, it is standing over the full year guidance which was set before some weakness in EU fresh produce markets.
" This remains a solid equity investment story," said Bloxham stockbrokers.
Davy's Aiden O'Donnell took a similar view: "With eight months of the year now completed, we feel comfortable regarding our forecasts for an adjusted EBITA out-turn of €21.7m.
"In recent weeks banana prices have recovered from the very depressed levels witnessed over the summer.
"Should this trend continue, there will be upside to our forecasts. We reiterate our 'outperform' rating and feel that the stock is undervalued at current levels."