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Total Produce grows in North America

The fruit and veg supplier has been ploughing money into acquisitions in the region
September 1, 2017

Fruit and veg supplier Total Produce (TOT) has continued its push into North America by upping its stake in Oppenheimer Group – which under its Oppy brand supplies 'Irresistible Mexican blackberries' and 'Juicy California grapes' – from 35 per cent to 65 per cent. In addition, Progressive Produce, the Los Angeles-based company in which Total also holds a 65 per cent stake, acquired Keystone Fruit Marketing in a push for scale. Acquisitions helped to drive up revenue in spite of foreign exchange headwinds – specifically weakening in the pound and Swedish krona. On a like-for-like basis revenue was up 4 per cent, largely due to price increases.

IC TIP: Hold at 201.5p

In spite of acquisitions, trading conditions in America were difficult. Volumes were up, but they were also higher in the wider market, which meant lower pricing and bad weather leading to a decline in produce quality. Across Europe, however, things looked better, with cash profits for eurozone and non-eurozone operations up 3.9 per cent and 11.7 per cent, respectively, with the eurozone being held back by continued challenges in Holland.

Bloomberg consensus forecasts have adjusted earnings per share, climbing to 13¢ for the full year 2017, then remaining flat in 2018 (2016 12¢).

TOTAL PRODUCE (TOT)  
ORD PRICE:202pMARKET VALUE:£648m
TOUCH:198-205p12-MONTH HIGH:203pLOW: 134p
DIVIDEND YIELD:1.4%PE RATIO:20
NET ASSET VALUE:73¢*NET DEBT:50%
Half-year to 30 JunTurnover (€bn)Pre-tax profit (€m)Earnings per share (¢)Dividend per share (¢)
20161.9125.64.770.81
20172.1535.46.950.89
% change+12+39+46+10
Ex-div:14 Sep   
Payment:13 Oct   
*Includes intangible assets of €292m, or 91¢ a share ** £1=€1.08