'Satisfactory' first-half profit before tax of €22m at Total Produce

FOOD GROUP Total Produce has reported "satisfactory" results for the first half, with profit before tax increasing by 13.2 per cent to €22 million and earnings per share up 13 per cent to 4.09 cent.

Revenue increased by over 6 per cent to € 1.295 billion and operating profit jumped by 15.6 per cent to € 24.8 million, as the group benefited from a restructuring programme implemented in Britain in 2007 as well as a continued focus on costs and efficiency, which has resulted in significant cost savings.

However, the increases were offset by the lower euro translation of British revenues.

Britain currently represents about 20 per cent of Total Produce's business.

The firm's interim dividend has increased by 8 per cent, up to 54 cent per share, and it will be paid on November 3rd.

Describing the results as "satisfactory", chairman Carl McCann said the increase in earnings was due to tight control over costs and acquisitions at the firm, which was spun off from Fyffes in 2006.

On Monday, Total Produce announced it had completed its acquisition of 60 per cent of Dutch fresh produce firms Haluco and Nedalpac for € 23 million - deals which are expected to add €300 million to annual revenues.

Since the end of June, Mr McCann said trading was in line with expectations and the company was continuing to target mid to upper single digit growth in adjusted earnings per share.

Looking further ahead, Mr McCann said the group's strategy was to grow the business organically and by acquisition. "We have the resources to grow significantly by completing medium and larger acquisitions and are on target to meet our previously stated ambition to double turnover over five years," he said, adding that the company would target fresh produce companies in the original European Union countries.

Paul Meade, an analyst with NCB Stockbrokers, said the results were strong "given the inflationary pressures within the retail industry". He added that they highlight the key attractions of the stock, which include "operating in a highly predictive demand industry, strong cash generation and [adherence to a] low risk acquisition expansion model".

Net debt increased to €80 million at the end of June, compared to €79.6 million for the same period in 2007. Total invested €2.7 million in joint ventures during the period, mainly in South African farm activities.