Pre-tax profits grew by 14 per cent to €72 million at Fyffes last year, as a strong second-half performance and property gains worked to offset difficult market conditions at the start of 2003.
The performance came as turnover grew by 5 per cent to €1.9 billion, boosted by acquisitions made in 2002.
Fyffes chairman Mr Carl McCann said the company had "overcome the challenges for the year". The firm had flagged an €8 million weather-related hit on operating profits last September but managed to make up the shortfall with "a strong finish".
Operating profit before exceptionals and goodwill amortisation was €67.7 million last year, compared to €63.3 million in 2002.
It also emerged yesterday that Fyffes spent €3.7 million on taking advice on a possible acquisition over the course of the past year. Mr McCann declined to comment on the nature of the acquisition target but he confirmed that the talks had concluded without success.
The outlay was noted by the market, which has long been eyeing Fyffes's substantial cash pile - €173 million at the end of 2003 - and wondering when acquisitions would arise.
Shares in the company dropped seven cents to €1.65 after the results and the €3.7 million advisory spend were posted.Fyffes will award a final dividend of 4.33 cents, raising its full-year return to 5.72 cents, up 10 per cent on 2002.
Mr McCann said the company's challenge for the future was to grow through bolt-on, medium-sized acquisitions. He said such purchases would probably cost €10-€100 million but acknowledged that the group could comfortably pay up to €500 million if the right opportunity presented itself.
He said acquisition activity was more likely to come in continental Europe than in the UK or the Republic, suggesting that it may be too early to consider bolt-on buys in the 10 EU accession states.
The company is expecting EU expansion to have a broadly neutral effect on profits. The EU banana trade regime will be extended to the accession states in May, but the quotas to be awarded to the various suppliers have yet to be announced.
Fyffes's banana division delivered a broadly flat performance last year, as the benefits of dollar weakness on input costs were balanced against higher costs and weaker markets.
Sales volumes were ahead in the firm's general produce division, although the company suffered some restructuring costs within its Capespan fruit joint venture.
The group's pineapple business, which is still in the pre-production stage, incurred net operating costs of €2 million, up from €0.7 million. It is expected to generate profits in 2005.
Profits at the firm were boosted last year by an exceptional gain of €4 million, which was created as a €7.6 million profit on property disposals was offset against the "group development costs" of €3.7 million.
The company said it expected to raise a further €14 million in pre-tax profits through property disposals this year. This will include the sale of the company's half share in a 26-acre "town centre" development in Dundalk to a group believed to be led by AIB director and prominent businessman Mr John McGuckian.
Mr McCann estimated that the company had a further €30 million tied up in property assets that could easily be sold.
