Fyffes enjoys fruitful year as turnover tops €1bn
SHARES in Fyffes rose sharply yesterday as the fruit company saw higher profits on the back of sales that topped €1bn for the first time since becoming a standalone company.
The fruit importer jumped 4.9pc to 63c after it said pre-tax profits more than doubled to €27.15m during 2012, up from €12.49m a year earlier.
Revenue came in at €1.02bn. That was an increase of just under 20pc year on year and was the first time turnover broke the €1bn barrier since Fyffes was separated from the larger Total Produce in 2006.
Company chairman Carl McCann said the results reflected a "very strong performance" by his company during the year.
"Revenue exceeded €1bn for the first time since demerger, driven by continued organic growth, and the result for the year also reflected further operational efficiencies, particularly in logistics.
"Earnings per share included the additional benefit of the shares repurchased in the second half of 2011," he said.
Looking ahead, Mr McCann pointed to trading conditions that have been "broadly in line with expectations" so far.
The firm is maintaining its €27m to €33m target for earnings before interest, tax and amortisation.
Most divisions performed well, with sales benefitting from growth across the board, along with higher prices.
The company also benefited to the tune of about €35m from favourable exchange rates for the euro against sterling and the dollar.
The figures translated into earnings per share that rose 45.8pc to 8.82 cent, while the dividend has been bumped up 7.5pc to 2.07c.
The results are the latest progression for a company that has struggled at times since it split off from Total Produce but now seems to be growing strongly across all its regions.
Known primarily as a banana company, Fyffes also supplies pineapples and melon, as well as some dried fruit snacks, most of which are imported from South America to Europe and the US.
The raw numbers for the company reflect where its business is. In 2011, Fyffes transported about 31 million cases of bananas into Europe and a little less than 11 million to the US.
The pineapple category is much smaller but at 8 million cases a year remains profitable at an operating level. Finally its winter melon business is strong, bringing about 12 million cases a year into the US through Florida.
The stable business has been reflected in the share price. Fyffes is up more than 56pc in the past year.
That is more than 20pc better than the return to shareholders in sister company Total Produce over that period.
The problems caused by its stake in property business Balmoral International Land have been written down to practically nothing, and at this stage have a carrying value of just €50,000.
Importantly, the business is throwing off cash, with free cash flow yield an impressive 8.1pc.
That was the highlight for analysts yesterday, with Davy's John O'Reilly pointing to the need to allocate that cash wisely.
For an Irish company, that is a good problem to have.