Banana glut hits profits at Fyffes
Sep 4 2010 by Iain Laing, The Journal
A BANANA glut and rising costs has peeled back first-half profits at tropical fruits distributor Fyffes.
The Dublin-based company said excess market supply, higher fuel costs and headwinds from a stronger US dollar made for difficult conditions, which left pre-tax profits down 28% at £11.1m in the six months to June.
The group said trading conditions had normalised during the summer months while Fyffes is pushing up selling prices across all its markets.
According to the Office for National Statistics, the average retail price of a kilogram of bananas has risen from 95p in January to 109p in June.
Fyffes, whose revenues were broadly flat at £334.7m, said conditions were tough in its pineapple division for broadly similar reasons, with results flat year-on-year. But a clampdown on costs drove an improved performance from its melon business, prompting Fyffes to hold its interim dividend steady as well as full-year guidance for underlying earnings of between £11.6m and £15m.
The firm began trading in the 1880s when the first commercial delivery of bananas from the Canary Islands arrived in London for EW Fyffe Son & Co.
The world’s oldest fruit brand came into being in 1929 with the famous blue label and its bananas are sourced in the Tropics from countries such as Costa Rica, Guatemala and Colombia.
Fyffes also retains a 40% stake in property business Blackrock International, which it spun off in 2006.
The group has UK bases in Wakefield, Coventry, Portsmouth and Basingstoke, as well in West Lothian.
