Fyffes has said it expects to report record profits this year, beating market expectations with an increase of more than 20 per cent in pre-tax profits and earnings per share.
The fruit importer and distributor said that following a very satisfactory performance in the first half of the year, it had continued to deliver strong results in the second half.
"Favourable market conditions in a number of continental European locations and the first-time contribution from recent acquisitions have driven this improvement," the company said in a trading statement.
A maiden contribution from Swedish company Everfresh, a strong banana price and dollar weakness were among the positive factors helping the company.
Shares in Fyffes rose by nearly 2.5 per cent following the trading statement, closing five cents higher at €2.08 in a generally weaker market.
However, Fyffes said that, during the second half, it had incurred exceptional costs in relation to its negotiations with Italian-based fruit marketing company Bocchi, which ended in September without a deal.
It also ran up costs in its ongoing legal action against DCC, which begins in the High Court tomorrow. It declined to put a figure on these costs but noted that "the board and its advisers remain very confident of the strength of its case".
Analysts said they were raising their forecasts for Fyffes in the wake of the trading statement with the company on course to deliver adjusted earnings per share (EPS) of at least 18 cents.
NCB has raised its 2004 EPS forecast by 9 per cent to 18 cents and its 2005 forecast by 8 cents to 19 cents while it has also set a price target of €2.25 for the stock.
Merrion Stockbrokers, which had been forecasting EPS growth of 13.5 per cent to 17 cents, is upgrading its forecasts by 7 per cent to 18.2 cents. It is also raising its 2005 forecast by 7 per cent to 19.1 cents.
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