IN the words of the popular song, while loading bananas unto the banana boat the cry goes up to the tally men on the dockside assessing the value of the produce, "Hey mister tally man, tally me bananas". Fyffes, the freshfruit import and distribution group, which now jointly owns Geest's banana interests, is keeping the tally men on overtime with its enlarged banana interests accounting for 30 per cent of total group sales of £1.43 billion last year.
Fyffes, which remains under the firm control of the McCann family, has evolved over 20 years from a Dublin fruit merchant into a public company responsible for around 12 per cent of the bananas in Europe's fruit bowls.
This week Fyffes offered the tally men its set of trading results for the year to the end of October last, a year in which the group produced good growth in turnover and profits. With difficulties in the banana market, other areas of Fyffes' fresh produce business chipped in with a solid trading performance, helping to lift group pretax profits 15 per cent to £48.5 million and swelling cash assets to just under £71 million.
Yet it was the first time revenue contribution from the Geest banana business which provided the yeast for Fyffes' profit rise. The joint acquisition deal with the Windward Islands' company produced £6.5 million for Fyffe's operating profits, a substantial return on its £20 million cash investment. But stripping out the acquisition benefits operating profits eased back £1 million to £34.8 million.
The group is keen on using its cash resources to beef up its presence in Europe where the market is growing by around 7 per cent per annum. In the absence of a suitably large acquisition, a share buy back may be considered to maximise earnings benefits from its £70 million cash float.
Fyffes's access to European markets and sluggish earnings per share could still prove a lure for US rival Dote, a highly deadly corporate tarantula which made an unsuccessful attempt to devour the group four years ago. But given improved banana prices this year and a full year contribution from Geest, the consensus of analysts' opinion is that the fruit bowl of profits should continue to look attractive.
