Good weather bears fruit for Total Produce

Good weather in the early part of the year helped Europe's biggest provider of fresh fruit and vegetables, Total Produce, to a positive start to its life as a separate listed company following its demerger from Fyffes.

Total Produce's turnover for the first half of 2007 grew by 33 per cent to €1.22 billion following a number of acquisitions and strong growth in some of its markets.

Group operating profit, including its share of joint ventures, increased by almost 15 per cent to €23.5 million compared to the same period in 2006, although its net margins were slightly lower.

The company was the best performer on the Irish Stock Exchange yesterday, climbing more than 6 per cent on the IEX index for small companies to €0.70 as analysts responded positively to the figures.

Profit before tax and amortisation was €21.5 million, an increase of 13 per cent on 2006, and there was an increase of 18 per cent in adjusted earnings per share (eps) to 3.62 cent.

Eps growth for the full year is now expected to be in the high single digits, up from previous guidance of mid single digits.

The warm weather in northern Europe in April and May helped Total Produce's sales. However, the firm warned in its outlook statement that the unusually-poor weather later in the summer had reduced demand for some of its goods, although it added that trading since the end of the first half has been in line with expectations.

"The weather will have some impact on the second half, but I wouldn't want to overstate it," said Total Produce chairman Carl McCann.

He said that the company's strategy was to grow the business both organically and by acquisition.

He added that it had the resources to target medium and larger acquisitions in the €20 million to €50 million range and was on track to achieve its ambition to double its turnover over the next five years.

The company will pay a dividend of 0.5 cent per share.

The strong first-half results were achieved despite the expected start-up losses at its joint venture in India with the Tata group and its share of losses from farming projects in South Africa.

The group has also incurred expenses of €2.1 million to date on the rationalisation and integration programme to merge recent acquisition Redbridge Holdings with its existing operations.