Sales rise by 30% for Total Produce despite bad summer

TOTAL PRODUCE, the fruit and vegetable distributor, overcame poor summer weather to secure a 30 per cent rise in sales and a 7.9 per cent increase in pretax profits to €38.9 million for its first full year since its demerger from Fyffes.

A "satisfactory" outcome for the general produce division as well as the acquisition of UK fresh produce company Redbridge Holdings meant sales surged to €2.4 billion in 2007, while the company said trading so far in 2008 was "in line with our expectation".

The performance came despite supply constraints in key produce lines in autumn and early winter, although weather conditions in the first half of the year were favourable for the company, it said. "Modest mid-single digit" increases in the average selling prices of its produce also contributed to revenue growth.

Company chairman Carl McCann said the results were ahead of expectations and consistent with its target to double turnover over a five-year period.

John O'Reilly, analyst at Davy stockbrokers, said the group's strong position in the UK produce sector would be aided by a 10 per cent rise in household fruit purchases and a 6 per cent rise in vegetable consumption between 2003-2004 and 2006, as shown in figures just released by the UK department of food.

Goodbody Stockbrokers upgraded its forecasts for the group, but said unfavourable currency movements would affect earnings.

Food sector analysts now expect Total Produce to step up the pace of acquisitions in 2008, although the first spending target may be a share buyback of up to 10 per cent of its issued capital.