Fyffes shares rise as profits 12pc higher than expected
SHARES in fruit and vegetable company Fyffes surged yesterday after it unexpectedly said profits this year would be much higher than previously thought.
Fyffes said profits this year would be 12pc higher than originally predicted, despite higher fuel and other business costs. The forecasts stand out in a sector that has seen companies cut their profit guidance recently.
In an interim management statement to coincide with the group's annual general meeting, Fyffes said it was increasing its range for earnings before interest, tax and amortization to between €25m and €30m, well ahead of the previous estimate of €22m to €27m. Last year the company earned €23.2m.
"The industry has experienced further cost inflation during the period, including higher fuel costs, and less favourable exchange rates," the company said.
"Fyffes continues to pursue necessary increases in selling prices in all markets (and it) remains focused on growing the group both organically and through further strategic acquisitions and alliances."
Analysts were broadly positive on the news, with Davy Stockbrokers' Aiden O'Donnell describing the firm's numbers as the "pick" of the sector so far this year.
"Its continued focus on costs has allowed it to become the lowest-cost supplier of bananas in Europe, thus enabling it to compete more effectively. As is always the case, the full year result can be impacted by events outside of management's control but for now the outlook is positive. We reiterate our 'outperform' rating," he said.
Shares ended the day up 1.09pc at 47c.