FYFFES shareholders have been told that the joint venture acquisition of the Geest banana business should start contributing to earnings from next year.

Fyffes shareholders yesterday approved the £147.5 million sterling acquisition of the Geest banana business by a joint venture in which Fyffes and the Windward Islands Banana Development Company (WIBDECO) have equal shares. WIBDECO is owned by the five Windward Island governments and 20,000 banana growers.

But Fyffes chairman, Mr Neil McCann, sounded a note of caution when he said: "The Geest business has a lot of problems, otherwise it wouldn't have been for sale."

He added, however, that Fyffes was confident that it could deal with those problems.

Finance director, Mr Carl McCann, would not be drawn on whether Fyffes planned to sell the Geest banana plantation in Cost a Rica or the two "reefer ships" whose lease obligations make up over £55 million of the Geest purchase price.

All that Mr Carl McCann would say in reference to the Costa Rica farm and the reefer ships was: "A strategic evaluation will be undertaken as a matter of priority". This is taken to mean that both the farm and the ship leases will ultimately be sold.

Mr McCann said the Costa Rica plantations - in which Geest invested $75 million - were not trading satisfactorily mainly because the cost of production was too high. "They are very interesting properties for the right people, possibly somebody already in Costa Rica" he said.

The Geest business is essentially a British and continental European importing and distribution business, handling more than 19 million 40lb boxes a year with formal supply agreements with WIBDECO. The business includes eight British and one European ripening centres with the capacity to handle nine million cartons a year.

There is also a shipping business with eight ships bringing Windward Islands bananas to Britain and Central American bananas to the rest of Europe. The ships have a substantial business shipping general cargo from Southampton to the Caribbean. Mr McCann said that while the Geest business will be run at arms-length by Fyffes and WIBDECO, there may be the possibility of rationalisation in the shipping side. "It's a huge cost," he stated.

After the acquisition is completed, Fyffes will have net cash of around £30 million. Further acquisitions are likely to be considerably smaller, said Mr McCann, adding "bigger acquisitions are not out there".

He ruled out using the cash to pay a once-off enhanced dividend or to buy back shares.