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Pension charge knocks reported numbers at Fyffes

The fruit distributor has managed to grow adjusted profit for seven years now but a one-off charge dented the statutory figures.
March 1, 2016

It was an exceptional year on several fronts for fruit distribution group Fyffes (FFY). On the one hand, it delivered its seventh consecutive year of adjusted operating profit growth to hit €45.8m (£35.6m) - a 14 per cent increase on 2014 - but it also slipped on a banana skin after incurring a net €12m charge linked to the closure of its Irish defined benefit pension scheme and a fine paid by one of its joint ventures. This meant the reported numbers took a hit.

IC TIP: Buy at 105p

But underlying trading was robust. The group's banana business managed a mid-teens percentage increase in operating profit despite the dollar's strength hitting sterling and euro earnings. This currency impact was mitigated through cost controls and management's ability to secure increased prices in some markets. The pineapple business was also hindered by the greenback's might but again price rises in most markets, this time partly due to supply constraints, helped offset this. Things were not so cheery for melons, though, with profit down against strong comparative figures and adverse weather adding to the malaise.

Analysts at Goodbody expect adjusted EPS of 13¢ in the 2016 financial year compared with 12.7¢ in 2015.

FYFFES (FFY)
ORD PRICE:105pMARKET VALUE:£308m
TOUCH:103-106p12-MONTH HIGH:117pLOW: 82p
DIVIDEND YIELD:3.3%PE RATIO:14
NET ASSET VALUE:72¢NET DEBT:18%

Year to 31 DecTurnover (€bn)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
20110.8512.53.51.93
20121.0227.28.32.07
20131.0828.78.62.17
20141.0938.211.42.39
20151.2231.89.32.75
% change+12-17-19+15

Ex-div: 7 Apr

Payment: 6 May

£1=€1.27