Fyffes saw its UK turnover drop in a year in which nearly £12 million of exceptional charge payments contributed to an overall pre-tax loss of £12.5m.
The banana and pineapple giant’s UK sales for the financial year ending 31 December 2014 fell from £287.2m in 2013, to £273.5m, according to accounts posted at Companies House.
Added to that, the company recorded an impairment charge of £8.6m on its investment in Windward Isles Banana Company, and has also set aside £3.4m to pay a “share of deficit on Merchant Navy Ratings Pension Fund.” Fyffes’ UK business made a pre-tax loss of £565,000 in the preceding financial year.
Speaking in the report accompanying the accounts, director David Flynn said: “The results for the year show a decrease in turnover and cost of sales of 4.8 per cent and 5.3 per cent respectively, and an increase in operating expenses of 4.1 per cent, leading to an overall decrease in operating profit. The company achieved a broadly satisfactory performance in the banana category in 2014. The industry experienced further inflation in the cost of fruit during 2014, continuing a multi-year pattern.
“There was also a favourable movement in exchange rates year on year, due to a weakening of the US dollar particularly relative to sterling. The impact of the increase in the cost of fruit was partly offset by lower logistics costs, as a result of a reduction in fuel costs and other shipping and import costs.
“While the company experienced a reduction in average selling prices in bananas mainly driven by the reduction in exchange rates, market conditions were broadly positive during 2014.”
On the Windward Isles Banana Company impairment charge, the directors noted: “Following a review of the expected future cash flows from its investment in Windward Isles Banana Company (UK) Limited, the company recognised a further £8,555,000 impairment charge in this regard during the year.”
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