Total Produce reports 10% fall in profit

TOTAL PRODUCE, the fruit and vegetable distributor, has reported a 10 per cent fall in pretax profit to €29.8 million for 2008 and says it remains cautious about its prospects this year.

The company described the full-year results as “satisfactory” given the less-favourable trading conditions in the second half of 2008 and the relative strengthening of the euro.

Shares in Total Produce closed up almost 16 per cent at 22 cents in Dublin yesterday, giving it a market value of over €77 million.

Annual revenues rose 3.5 per cent – 7.8 per cent on a constant currency basis – to €2.5 billion thanks to contributions from two acquisitions in the Netherlands, Haluco and Nedalpac, which Total Produce bought last year.

An exceptional charge of €4.6 million was recorded last year connected with the closure costs of plants in Ireland and Britain and the revaluation of property assets.

Chairman Carl McCann said Total Produce had achieved satisfactory earnings growth of 6.6 per cent to €46.5 million but warned it may not match this performance this year.

Total Produce is recommending a final dividend of 1.15 cent per share, bringing its annual dividend to 1.69 cent, a rise of 2.4 per cent on the dividend for 2007.

The company also said it was considering a share buyback of up to 10 per cent of its stock “if the appropriate opportunities arise”.

Mr McCann said the company’s results may also be affected by movements in other currencies against the euro.

“The group is targeting a very solid earnings performance for 2009 with adjusted earnings per share in the range of 5.5 to 6.5 cent per share on 2009 target revenues of €2.6 billion,” he said.

Goodbody analyst Killian Murphy described the results as solid, given the economic backdrop. “For some time, there have been concerns on the resilience of the business in a recessionary environment.

“While, as expected, there has been a decline in the higher margin packaged goods, overall volumes remain stable.”