Total Produce has reported a strong set of full year results this morning that have come in at the top end of the guidance range provided by management. Revenue for the 12 month period increased to €3.2 billion (+13.0% YoY) while adjusted EBITDA amounted to €74.1 million (+6.7% YoY). Adjusted earnings per share for the company amounted to 8.77c (+10.5% YoY), coming in at the higher end of management’s previous range of between 8.0-8.8c. The final dividend increased to 1.66c (+10% YoY).
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On a segmental basis, the company recorded revenue growth of 12.5% in Total Produce’s biggest division, Eurozone Fresh Fruit (revenue: €1.493 billion) while revenue also moved higher in Northern Europe (+12.2%) to €900 million but fell by 1.8% to €481 million in the UK reflecting a currency headwind of 5.2%. On an underlying basis, sales increased in the UK by 2.4% while operating EBITA experienced a strong increase to €6.6 million in the geography, higher by 29.3% compared to 2012 levels.
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Total Produce continues to be a highly cash generative business and net debt finished 2013 at €11.0 million (2012: €53.0 million) leaving the company with a net debt/EBITDA ratio of .15x with 11.3x interest cover. This very strong performance in cash generation produced free cash flow in 2013 of €45.1 million (2012: €41.2 million), comparing very favourably against a current market capitalisation of €310 million and leaves the company very well positioned to complete further acquisitions.
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Going forward, Total Produce management are guiding for adjusted earnings per share to be in the range of 8.4-9.4c in 2014. Taking the high end of this guidance, it would represent an increase of 6.8% YoY. Given the strong underlying business dynamics of the company and the continued strong cash generation capabilities of the firm, we think that Total Produce continues to offer excellent value for investors with the shares trading on just 10x the high end of guided earnings for 2014 while also providing for a dividend yield of c.2.5%.
<p><h5>David Holohan</h5>
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