Fyffes has €100m war chest for future acquisitions

Fyffes chairman David McCann has said the company has flexiblity to do up to €100million of further acqusitions over the next few years after buying Canadian mushroom company Highline Produce.

“We probably have some greater constraints than we previously had but could comfortably go up to €100 million without causing too much worry,” he said.

The importer, which on Friday raised its earnings forecast, acquired Highlinefor CAD$145 million (€97.7 million) earlier this month.

Speaking to reporters after the group’s annual general meeting in Dublin on Friday, Mr McCann also said the company “is always open to something bigger”

after missing out on a proposed $1 billion merger with rival Chiquita in 2014.

Fyffes said it expects its full-year earnings before interest, tax, depreciation and amortisation (ebitda) forecast to €63 million to €69 million from €54 million to €60 million. That compares to €56.1 million for 2015.

Shares in Fyffes fell 1.2 per cent in early trading in London, having jumped earlier on the month when the €98 million acquisition of Highline was announced.

Patrick Higgins, an analyst with Goodbody Stockbrokers, said he plans to raise his estimates for Fyffes as a result of the new guidance.

Fyffes said it remains confident about its future prospects, including the performance of its new mushroom business, and continues to focus on its ongoing development with a view to increasing shareholder value.

"With strong returns on capital, a less volatile business model and an attractive valuation, we retain our positive stance on the stock," said Mr Higgin, who rates Fyffes' shares a buy.