Fruit and vegetable distributor Fyffes has reported a 17.5% increase in pre-tax profits for the six months ending June 2005. Pre-tax profits rose to €69.3m from €58.9m the same time last year.
Sales for the half year rose by 17.7% to €1.1 billion from €944m the same time last year. The company said it was targeting high-teens percentage growth in earnings for the full year.
Earnings per share rose over 6% to 14.32 cent from 13.47 cent for the first six months of 2004. The board has declared an interim dividend of 1.69 cent per share, up 10.5% on last year's figure of 1.53 cent.
Fyffes said its Tropical Produce division achieved a strong result in the seasonally stronger first six months of the year, mainly in continental Europe with a relatively flat outturn in Ireland and the UK. It said that market conditions were particularly favourable, due mainly to positive supply factors.
Costs, including fruit, shipping and fuel, were higher in the six month period, although this was partly offset by improved exchange rates compared to the first six months of 2004.
The company said that it continues to expand its supersweet pineapple business with half yearly volumes up by over 50% to 3 million boxes.
Fyffes said its General Produce division delivered a 'satisfactory' performance in the first six months of 2005. Volumes were slightly lower than in H1 2004, however this was offset by a modest improvement in average prices.
During the first six months, the group earned profits of €0.1m from the disposal of property, plant and equipment. This compares to €14.2m the same time last year.
The company said that costs amounting to €4.3m in the first half of 2005 and €2.1m in the first half of 2004, in connection with the group's legal action against DCC, have been excluded from adjusted profit before tax and adjusted earnings per share. A verdict in this case is expected later this year.
Fyffes said that after the 'exceptional' results in the first half of the year, trading in July and August has been 'satisfactory'.
'Taking into account that the performance in the second half of last year was very strong and given the significant cost inflation being experienced in the industry, particularly in relation to fuel costs, Fyffes is currently targeting an increase in adjusted earnings per share, for the full year in the high teens in percentage terms,' the company said. This is slightly ahead of expectations in the group's trading update in June.
It said that it continues to actively pursue opportunities to apply the group's substantial resources to develop Fyffes both organically and through further 'attractive acquisitions and alliances'.
Fyffes shares closed up two cent at €2.59 in Dublin.
