Fyffes warns of cost inflation and higher fruit prices next year

Fruit company Fyffes warned of higher fruit prices next year in a trading update to the market last night.

The company said it expected earnings this year to be at the upper end of its target range, on the back of favourable market conditions in the final months of 2012.

But it warned: “The industry will once again experience cost inflation in 2013 and, as a result, higher selling prices will be necessary in all markets.”

Fyffes, which imports tropical fruits into Europe, said it was narrowing its 2012 target earnings before interest, tax and amortisation (ebita) range of between €28 million and €33 million to between €30 million and €33 million.

The impact on earnings per share is expected to be a 37 per cent to 52 per cent increase, reflecting the effect of the company’s share repurchasing scheme in 2011.

The company said yesterday it may repurchase further shares in the market.

It also outlined a target ebita in the range €27 million to €33 million for 2013. Fyffes said it remained positive about its future prospects.