Fresh produce group Fyffes has reported strong first-half results. Profits before tax rose 17.6 per cent to €69.3 million in the six months to the end of June. Sales during the period rose by a similar margin to €1.11 billion. ...

The company attributed the strong performance to favourable trading in continental Europe, which accounts for the bulk of the group's sales.

The tropical produce division, which includes the fresh bananas and pineapple business, accounted for approximately two-thirds of groups pretax profits.

Although volumes in this division were down, due to supply problems associated with poor weather in fruit-growing areas in Africa and the Caribbean, this was offset by higher prices and favourable exchange rates, according to Carl McCann, the group chairman.

The strong results of the tropical fruits division contrasted with what the company called a "satisfactory performance", by the general produce division. Volumes were lower in this division also, but prices were also weaker in key citrus and deciduous fruit categories.

Adjusted earnings per share in the period were 15.03 cent, up 43.7 per cent, but the company predicts that full-year earnings will only be ahead of last year by something in the region of the "mid-teens".

This reflects a very strong performance in the second half of last year and significant cost inflation, particularly in relation to fuel.

The interim dividend is 1.53 cent per share, an increase of 10.5 per cent.

The group spent €15.9 million on new properties in Dublin and Edinburgh, while profits from the disposal of properties in the period were €100,000 compared to €14.2 million in the same period last year.

There were costs of €4.3 million in the first half that related to the group's insider trading action against DCC, a judgement in which is expected later this year. The group also said that it will be forced to make a provision in the second half in connection with the deficit of the UK-based Merchant Navy Officers Pension Fund. The liabilities relate to companies bought by Fyffes in the past that were involved in shipping.

The company will seek to recoup some of this money from the vendors of the companies, said Mr McCann.