The first half of the year was a challenging period for Total Produce (TOT). The fruit and veg distributor faced strong comparatives and difficult trading conditions in the Eurozone. A big business disposal and unfavourable currency movements also affected top-line growth. Strip these out and like-for-like sales fell 1.7 per cent to €1.59bn, as volume growth was offset by lower prices.
That pricing weakness was felt mainly in Continental Europe, where the warm Spring weather led to bumper crops and oversupply. Underlying sales fell 6 per cent in the Eurozone division, while profit slumped 14 per cent to €11m. That offset profit growth elsewhere in the business, and resulted in a 5 per cent decline in group adjusted pre-tax profit to €27.2m.
Despite the flat trading, management has maintained its full-year EPS guidance of 8.4¢ to 9.4¢ (Broker Goodbody has pencilled in 8.7¢), as it presses ahead with its acquisition-driven growth strategy. It recently snapped up the remaining 50 per cent stake in Dutch-based All Seasons Fruit and continued its expansion into the US, buying a 45 per cent share of Californian company Eco Farms.
However, the shares have weakened in recent weeks on the back of a Russian ban on European fruit imports. Total's exposure to Russia is minimal, but the sanctions still seem to be affecting sentiment towards the shares.
| TOTAL PRODUCE (TOT) | ||||
|---|---|---|---|---|
| ORD PRICE: | 79p | MARKET VALUE: | £ 261m | |
| TOUCH: | 78-80p | 12-MONTH HIGH: | 100p | LOW: 65p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 64¢* | NET DEBT: | 25% | |
| Half-year to 30 Jun | Turnover (€bn) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2013 | 1.37 | 22.9 | 4.0 | 0.6095 |
| 2014 | 1.32 | 24.2 | 4.7 | 0.64 |
| % change | -4 | +6 | +17 | +5 |
Ex-div:17 Sep Payment:17 Oct £1=€1.25 *Includes intangible assets of €161m or 49¢ a share | ||||
