Total Produce targets up after strong start to 2016
Published 26/05/2016 | 02:30
Irish fruit and vegetable company Total Produce is raising its earnings target for 2016 following a "satisfactory" opening four months of the year.
In a trading update issued to shareholders yesterday, the company said it is upping its earnings per share target into the top half of the previously announced 10.5c to 11.5c range.
Since the start of the year the firm has completed the acquisition of a 65pc shareholding in LA-based Progressive Produce.
Progressive is a grower, packer, and distributor of conventional and organic produce to the retail and wholesale sectors in the US and Canada.
At the time Progressive president Jim Leimkuhler described the link up as an "excellent long-term combination of skills and expertise".
The Progressive deal was part of its plan to ramp up sales in the North America region.
Last year Total Produce chairman Carl McCann outlined the firm's ambitions to increase sales in the US business to match its EU revenues.
"We have become a meaningful operator in North America and we have a very good operation over there.
"We would like to develop our American business to be the same size as or larger than our European one," he said.
Total Produce also completed a €20m share buy-back programme at the end of January and has signalled the potential to purchase shares in the market as appropriate.
The company has also set out a final dividend of 2.027c per share, which is due to be paid on May 26, representing a 15pc increase on last year.
Davy analyst Declan Morrissey said Total Produce continues to demonstrate "consistent progress" in what he described as a positive trading update. "It increased its target full year earnings per share (EPS) to the upper half of the range announced in March (10.50-11.50c).
"A supportive pricing environment in mainland Europe and more favourable foreign exchange are the likely catalysts.
"We will likely move our full year EPS forecast up to around 11.3c (up 2pc)."
The news follows on from a strong performance in 2015 in which revenues at the company increased by 10.4pc to €3.45bn.
Total Produce's profits rose by 13.3pc last year, rising to €58m.
Shares in Total Produce were up by 0.24pc to £1.26 (€1.66) at 2pm yesterday.