Fyffes aims to become involved in a major consolidation of the world fresh produce industry and would be prepared to look at acquiring one of the other "big four" companies - Dole, Chiquita or FDP - the deputy chairman, Mr Carl McCann, has stated.
After Fyffes reported full-year results which were at the lower end of forecasts, Mr McCann said: "We would look at anybody in the industry and the logic is clear - consolidation would allow major cuts in costs."
Company secretary Mr Philip Halpenny gave an example: "All banana producers source produce in Central America and ship it to Europe. Ships pass in the night. Why not do this with bigger ships with fewer journeys?"
Fyffes is second-biggest banana producer, with a market capitalisation of €600 million (£472.5 mill ion). It is bigger than Chiquita (€259 million) and FDP (€398 million). With net cash at year-end of €138.7 million, funding an acquisition of any of these companies would not be a problem.
"We would always prefer the bigger deal," said Mr Halpenny.
The only problem may be persuading one of Fyffes main competitors that a merger is in the best interest of both companies. Mr McCann gave a firm indication yesterday that Fyffes aimed to be a buyer if there was a move towards consolidation in the industry.
Analysts said yesterday that there were a number of smaller players Fyffes might move to take out, but that if it tried to acquire one of its main competitors, Chiquita or FDP were more likely targets than Dole. Fyffes pulled out of a takeover bid for Dole some years ago.
Fyffes has already paid €57 million for a 50 per cent stake in Capespan's European operations and a 10 per cent equity stake in Capespan itself.
Fyffes' results to the end of October were described as "moderate" by one analyst who identified the euro's weakness against the dollar as one of the main factors. He added, however, that Fyffes' results were excellent compared to the dismal trading statement issued yesterday by Chiquita.
Fyffes' turnover was marginally lower at €1.89 billion (£1.45 billion), with operating profits of €80 million bringing a modest rise in margins from 4 per cent to 4.2 per cent. In the banana business, the weakness of the euro was offset by lower shipping charges and tighter cost control.
With its cash pile mounting, Fyffes' interest income was 14 per cent higher on €6.6 million, bringing pre-tax profits to €82.9 million (£65.3 million), a rise of just over 5 per cent.
The accounts also include an exceptional profit of €2.8 million on the sale of Fyffes' stake in United Beverages to Guinness. Shareholders will receive a 20 per cent increase in their final dividend to 3.25 cents.
In the coming year, Fyffes intends to reduce its banana import volumes to Europe by 10 per cent, in line with other companies. The acquisition of the Capespan interests in Europe would bring Fyffes' turnover to more than €2 billion and would open up important new opportunities in the fresh produce sector, said Mr McCann. It would also reduce Fyffes' dependence on bananas, as Capespan is not involved in the banana trade.
In another move, Fyffes plans to set up a separate property division within the group. Fyffes believes that developing surplus properties in Dublin, Cork, Dundalk, London and Edinburgh, which are carried in the books at substantially below market value, could increase their value.
