Analysts have moved to upgrade their forecasts for Fyffes, following news of improved trading at the company over the fourth quarter. The fruit distributor said its continental European businesses had turned around recently, following weather-related problems over the summer.

Fyffes told the market in September that the summer heatwave and consequent drop in fruit consumption could cost it some €8 million in third-quarter operating profits.

The warning led analysts to cut their full-year profit forecasts on the stock from about €71 million to €63 million. Most have been considering upgrades, however, as evidence emerged of high banana prices, particularly in Germany.

The firm has also been helped by weakness in the dollar, which has allowed for lower input costs.

Fyffes said yesterday that full-year results were likely to be more than €4 million ahead of analysts' September forecasts. The guidance, which comes within a week of Mr Carl McCann's elevation as chairman, means the firm should post profits broadly in line with last year's numbers, before exceptionals and goodwill amortisation. Fyffes made a pre-tax profit of €63 million last year.

In a statement issued to the stock exchange yesterday, the firm indicated it would report a number of transactions as exceptional items in 2003, including the disposal of several Irish properties and staff costs arising from a restructuring. It said the net effect of the exceptionals would be an extra profit of €5 million.

Ms Niamh Brodie, analyst with Merrion Stockbrokers, said she had expected a net exceptional gain of €7.6 million but suggested the difference could be attributable to property disposals moving slowly. It is understood that Fyffes is close to agreeing a deal on the sale of its 50 per cent interest in a shopping centre development in Dundalk, Co Louth, to joint-venture partner Lagan Investments. The joint venture won planning permission for a 300,000 sq ft town centre development earlier this year.