Firmer European banana prices and a strong performance by its Capespan associate has helped fruit distribution group Fyffes produce a strong recovery in the first half.
Analysts are now expected to substantially upgrade their estimates for Fyffes' full-year earnings and forecasts.
Although the first-half profits of €36.8 million were well ahead of market forecasts of €31-32 million, Fyffes shares still fell back as investors who have bid the shares up strongly in recent months took their profits. At the close Fyffes shares were down 9 cents on €1.38.
This compares with a low of the year of €0.79 but is still a long way off the €3.98 high the shares reached at the height of the dot.com boom.
Banana prices in Europe have risen 30 per cent this year with a greater supply-demand balance and with the elimination of the illegal imports that drove prices to record lows last year.
On the cost side, Fyffes has completed a €20 million cost-cutting programme which has seen the closure of three depots and the merging of some operations in the UK.
Finance director Mr Carl McCann said: "We still need some price increases to compensate for the dollar movement, but things are looking a lot better."
Turnover in the first half was up 5.6 per cent to €1.05 billion but operating profits were much improved and were 44 per cent higher on €37.7 million. Earnings per share were up 42 per cent on 7.22 cents and sharheolders are to get a 10 per cent increase in the interim dividend to 1.1496 cents.
The half-year results also includes the final instalment of Fyffes's unfortunate foray into e-commerce and include a €1.7 million charge for closure and redunancy costs at the ingredients.net joint venture.
