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Mike Knowles



Fyffes enjoys positive start to 2012

Improved pricing in Europe boosts expected earnings, following impressive increase in net profit during 2011

Fyffes enjoys positive start to 2012

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Ireland-based tropical fruit importer Fyffes has reported impressive results for 2011, posting a 35.3 per cent increase in its annual net profit from continuing operations to €11.2m, on the back of a 14.5 per cent annual rise in turnover to €850m.

While the notable increase in revenue was mainly the result of Fyffes' recently acquired one-third stake in German distributor Van Wylick, which brought €63.8m in additional sales on to the balance sheet, the company said like-for-like sales were 5.9 per cent higher compared with 2010.

Group revenue, excluding Fyffes' share of joint ventures such as property investor Balmoral, amounted to €659m for the year, a 5.8 per cent rise that was reportedly driven by what Fyffes described as "strong organic growth" in each of its product categories.

Chairman David McCann praised the group's strong performance in 2011: "Fyffes is pleased to report a strong result for 2011, towards the top end of its target range."

He added that Fyffes had enjoyed a "positive start" to 2012, with improving pricing in continental Europe, and therefore expected its annual earnings before interest, tax and amortisation for this year to be in the range of €22m–€27m, potentially higher than the €23.2m and €21.3m posted for 2011 and 2010 respectively.

The positive results came during a year in which the weekly, priced banana market followed a "more normal pattern", although a 35 per cent increase in fuel costs must remain a concern.

Profits also increased in the pineapple category in 2011 and the company expanded its own production to the extent that it now produces almost half of the pineapples it sells.

Fyffes' US melon business achieved what it described as a "satisfactory result in 2011 despite less favourable market conditions compared to the previous year".

The company added: "This business continues to expand its activities, including adding further production capacity in Guatemala, and has virtually doubled in scale since Fyffes first invested in 2008."

The strength of its fruit trading core business will presumably reassure investors, who have seen Fyffes make significant investments amounting to €33.8m during the past financial year.

These investments included €12.7m to buy back some of its own shares, €10.4m in payments owed for earlier acquisitions, €7.4m on new acquisitions (including Van Wylick and melon production in Guatemala) and a further €3.3m development loan to one of its suppliers.

Fyffes admitted that, mainly as a result of these investments, it owed €1.2m at the end of last year, compared with a cash surplus of €37.1m a year earlier.

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