Preliminary Results Y/E 31 December 2010

Fyffes plc

Preliminary Results 2010

Fyffes' 2010 results ahead of expectations

* excluding the Group's share of Balmoral's result, exceptional items, amortisation of intangibles and the Group's share of tax of its joint ventures

** excluding the Group's share of Balmoral's result, exceptional items and amortisation of intangibles

Commenting on the results, David McCann, Chairman, said:

"Fyffes is pleased to report an increase in its adjusted EBITA for 2010 to €21.3m, ahead of previous expectations. Adjusted earnings per share for the year increased by 6%. In the context of the exceptionally difficult trading conditions which persisted in the banana category for much of the first half of the year, this result represents a very satisfactory outcome for 2010. Fyffes is proposing a 9.1% increase in its final dividend for 2010.Trading conditions in the first two months of 2011 have been satisfactory. The Group is maintaining its current target EBITA range for the year of €17m-€22m."

2 March 2011

For further information, please view the 2010 results slide presentation at www.fyffes.comor contact Brian Bell at Wilson Hartnell PR, Tel: +353-1-6690030.

Financial results and operating review

Revenue

Total Revenue, including the Group's share of its joint ventures, was 2.1% higher in 2010 at €742.1m. Group Revenue amounted to €623.1m in the year, up 4.2% on 2009, due mainly to an increase in activity and volumes in the Group's US melon business. Revenue in the banana category increased modestly, mainly due to the benefit of a more favourable average exchange rate on translation of sales in the UK market. Banana volumes were broadly unchanged year on year.

Operating profit

Adjusted EBITA for 2010 amounted to €21.3m, up 2.8% on the previous year. Adjusted EBITA is operating profit for Fyffes' tropical produce activities, excluding its 40% share of Balmoral's results, exceptional items and amortisation of intangible assets, and before interest and tax (including the equivalent share of EBITA of its joint ventures). The calculation of Adjusted EBITA is set out in note 2 of the accompanying financial information. The key drivers of performance in the Group's tropical produce operations are average selling prices, exchange rates and the costs of fruit, shipping and fuel, all of which can result in volatility in year on year profitability.

As previously indicated, the Group's performance in the banana category in 2010 was adversely affected by the difficult market conditions which persisted for much of the first half of the year. A combination of the prolonged period of exceptionally cold weather throughout Europe during the first three months of the year and excess market supplies during much of the first half resulted in a significant reduction in operating profits in the category. Banana profits were also significantly impacted by adverse exchange rates as a result of the relative strength of the US Dollar against the Euro and Sterling during 2010. In addition, the Group's key input costs including fruit, shipping and fuel were all again higher in 2010, offset by the reduction in import duty. Market conditions improved during the second half of the year as import volumes reduced. The Group achieved necessary increases in selling prices in its key markets in the second half of the year, although this was insufficient to offset the shortfall in profits in the first half.

As expected, the Group produced a small profit in the pineapple category, slightly ahead of the previous year. The result was impacted by the anticipated significant development costs incurred in the farming operation in Panama, which was acquired in May 2009. This work is now largely complete. The result in the pineapple category was also adversely impacted by the unfavourable exchange rates noted above. Trading conditions were broadly satisfactory in Europe during 2010 and Fyffes achieved an increase in profits on its marketing activities there.

Fyffes' US melon business made significant progress in 2010. Expanded production activities in Central America enabled it to extend its import season. In addition, it commenced supplying its customers on a year round basis through sourcing domestically produced fruit in the US. This resulted in a 25% increase in revenues year on year. The business remained very focused on its cost base and as a result achieved a strong increase in profits in the year.

Fyffes' 40% share of the after tax losses of Balmoral International Land plc amounted to €8.3m in 2010, reflecting the impact of the most recent independent external valuation of its property portfolio. Fyffes' share of the reduction in Balmoral's net assets amounted to €12.1m, €3.8m of which has been written-off against revaluation reserves in Fyffes' balance sheet.

The total operating profit for the Group, which is the Adjusted EBITA of €21.3m less the Group's share of Balmoral's result, exceptional items, amortisation charges and the Group's share of joint ventures interest and tax, amounted to €8.7m for the year, compared to a loss of €11.8m in 2009.

Financial income

Net interest income in the Group's subsidiary companies in 2010 amounted to €0.1m, compared to €0.6m in the previous year. Excluding non-cash interest costs on discounting deferred acquisition consideration and other provisions, interest earned on the Group's net cash balances amounted to €0.5m, a return of 1.6%, reflecting lower average interest rates. The Group's share of the net interest expense of its joint ventures was €0.1m in 2010, similar to the previous year.

Profit before tax

Adjusted profit before tax for 2010 amounted to €21.3m, €0.1m up on the previous year reflecting the increase in adjusted EBITA and the reduction in net interest income. As set out in note 2 of the accompanying financial information, adjusted profit before tax excludes the Group's share of Balmoral's result, exceptional items, amortisation of intangible assets and the Group's share of the tax charge of its joint ventures, which is reflected in profit before tax under IFRS rules. Profit before tax, excluding these adjustments, amounted to €8.8m compared to a loss of €11.2m in 2009.

Taxation

An analysis of the tax charge for the year is set out in note 4 of the accompanying financial information. The underlying tax charge in 2010 was €2.8m compared to €2.7m in the previous year, equivalent to a rate of 13% (2009: 12.9%), when applied to the Group's Adjusted Profit before Tax. The underlying tax charge excludes the tax impact of exceptional items and deferred tax credits related to the amortisation of intangible assets and includes the Group's share of tax of its joint ventures. This underlying rate is used for the purposes of calculating adjusted earnings per share. The 2010 income statement shows a tax charge of €1.5m, before these adjustments, compared to a credit of €1.3m in the previous year.

Minority interest

A minority interest credit of €0.4m arose in 2010, reflecting losses in one non-wholly owned subsidiary, compared to a charge of €0.5m in the previous year.

Earnings per share

Adjusted fully diluted earnings per share amounted to €5.50 cent in 2010, up 6% on the previous year. This increase reflects the higher profits, the lower minority interest charge and the positive impact of the repurchase of shares late in the year. The calculation of adjusted earnings per share is set out in note 5 of the accompanying financial information. It excludes the Group's share of Balmoral's result, exceptional items and the amortisation of intangible assets. The fully diluted earnings per share after Balmoral and exceptional items amounted to €2.23 cent in 2010, compared to a loss of €3.03 cent in the previous year.

Dividend and share buyback

In November 2010, the Group repurchased 17m Fyffes shares in the market at a cost of €5.3m. With dividends paid in the year of €5.7m, Fyffes returned total cash of €11m to shareholders in 2010, compared to €5.4m in the previous year.

Taking into account the Group's financial position and other investment opportunities, the Board may from time to time repurchase further Fyffes plc shares in the market.

The Board is proposing to pay a final dividend for 2010 of 1.2 cent per share, an increase of 9.1%. Subject to shareholder approval at the forthcoming AGM, this dividend, which will be subject to Irish withholding tax rules, will be paid on 18 May 2011 to shareholders on the register on 15 April 2011. In accordance with company law and IFRS, this dividend has not been provided for in the balance sheet at 31 December 2010. Total dividends in respect of 2010 will amount to 1.75 cent, up 6.1% on the previous year and equivalent to a payout ratio of 31.8% based on adjusted earnings per share. This represents a yield in excess of 4% based on Fyffes' current share price.

Balance sheet

Investment in Balmoral International Land plc ('Balmoral') - formerly Blackrock

In accordance with International Financial Reporting Standards, Fyffes' 40% investment in Balmoral is treated as an investment in an associated company and accounted for under equity accounting rules. Under these rules, Fyffes carries this investment at €12m, representing its share of Balmoral's reported net assets at 31 December 2010. This reflects a further significant reduction in its net asset value and is based on up-to-date independent professional valuations of its property portfolio. The market value of this investment at 31 December 2010 was €3.5m, based on its then share price of €0.015 per share. As in previous years, the resulting discount to net asset value of €8.5m, which has narrowed considerably from €47.6m in 2008 and €13.6m in 2009, has not been recognised in Fyffes' balance sheet at 31 December 2010. This valuation gap has fallen further in 2011 and is now €5.9m based on Balmoral's current share price.

Pension obligations

The deficit in the Group's defined benefit pension schemes, before deferred tax, decreased from €14.5m at the beginning of the year to €13.8m at the end of the year. The value of the assets in the various schemes increased by €12.1m (+12.3%) in 2010 while liabilities increased by €11.4m due to a reduction in long term bond rates. The schemes are closed to new entrants.

Net funds

Net funds increased to €37.1m at 31 December 2010 from €36.6m at the beginning of the year. Operating cash generated in the year, excluding depreciation and the contribution from joint ventures, amounted to €26m, slightly up on 2009. Of this, €11m was returned to shareholders through dividends and the repurchase of shares as noted above. Capital expenditure amounted to €7.5m in 2010, including leased assets of €1.4m. Working capital outflows amounted to €3.4m in the year, mainly as a result of a loan advanced to one of the Group's large suppliers. Other significant expenditure in the year included tax payments of €1.4m, pension contributions, including to the MNOPF, in excess of the charge in the income statement, amounting to €1.3m, deferred acquisition consideration paid of €0.9m and dividends of €0.8m paid to minority shareholders.

Shareholders' funds

Shareholders' funds amounted to €148.1m at 31 December 2010, compared to €151.7m at the beginning of the year. The increases from profits in the Group's tropical produce operations of €16m and currency gains of €5.4m on translation of its non-Euro denominated net assets were more than offset by the €12.1m reduction in the carrying value of its investment in Balmoral and the €11m returned to shareholders in dividends and shares repurchased.

Current trading

Selling prices in the banana category have been higher year on year in the first two months of 2011, reflecting the impact of supply constraints due to adverse weather conditions in the main production regions. Costs, particularly fuel prices, have been higher in the year to date. Overall trading conditions have been satisfactory to date in 2011. The Group is maintaining its current target EBITA range for the year of €17m-€22m.

* Adjusted EBITA excludes amortisation charges, the Group's 40% share of the results of Balmoral International Land plc and exceptional items.

David McCann, Chairman

on behalf of the Board

2 March 2011

Copies of this announcement are available from the Company's registered office, 29 North Anne Street, Dublin 7 and on our website at www.fyffes.com.

Fyffes plc

Summary Group Income Statement for the year ended 31 December 2010

Fyffes plc

Summary Group Statement of Comprehensive Income for the year ended 31 December 2010

Summary statement of movement in equity for the year ended 31 December 2010

Fyffes plc

Summary Group Balance Sheet as at 31 December 2010

Fyffes plc

Summary Group Cash Flow Statement for the year ended 31 December 2010

Fyffes plc

Notes to Preliminary Results for the year ended 31 December 2010

1. Basis of preparation

This preliminary financial information has been derived from the Group's consolidated financial statements for the year ended 31 December 2010 which have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the EU Commission and the accounting policies set out in the Group's 2009 annual report except as otherwise set out below.

The Group applied the revised accounting standards IFRS 3 - Business Combinations and IAS 27 - Separate and consolidated financial statements, for the first time in 2010. The application of these revised standards had no impact on earnings per share in 2010.

The comparative financial information for the year ended 31 December 2009 presented in this preliminary results announcement represents an abbreviated version of the Group's statutory financial statements for that year, on which an unqualified audit report was issued and which have been filed with the Companies Registration Office in Dublin.

2. Adjusted profit before tax and EBITA

Fyffes believes that adjusted profit before tax and adjusted earnings per share (note 5 below) are the appropriate measures of the underlying performance of the Group, excluding exceptional items, amortisation charges and the Group's share of Balmoral's results. Similarly, adjusted earnings before interest, tax, exceptional items, amortisation and Balmoral (Adjusted EBITA) is a more indicative reflection of the underlying operating result of Fyffes' tropical produce activities. It is the basis on which the Chief Operating Decision Maker of the Group reviews performance. Financial income and expense, income taxes and certain corporate costs are managed centrally.

3. Exceptional items

In 2009, the Group recognised an exceptional gain as a result of the recycling through the income statement of cumulative currency gains of €7.5m on disposal, liquidation and termination of non-trading businesses. The Group's share of an onerous shipping contract provision in its Geest joint venture amounted to €4.4m in 2009. The Group also recognised a gain of €0.5m on disposal by Geest of one of its properties. The Group incurred costs in 2009 of €1.6m as a result of the cessation of activities in its former Brazilian melon joint venture. The net tax impact of these exceptional items in 2009 was a credit of €3.2m.

4. Corporation tax

Including the Group's share of the tax (credit) of its joint ventures, amounting to €0.1m (2009: credit of €0.3m), which is netted in operating profit in accordance with IFRS, the total tax charge for the year amounted to €1.4m (2009: credit of €1.6m). Excluding the impact of deferred tax credits related to the amortisation of intangibles and the tax effect of exceptional items, the underlying tax charge for the Group for the year was €2.8m (2009: charge of €2.7m), equivalent to a rate of 13% (2009: 12.9%) when applied to the Group's adjusted profit before tax.

5. Earnings per share

Adjusted fully diluted earnings per share

Adjusted fully diluted earnings per share is calculated to exclude the Group's share of the results of Balmoral International Land plc, exceptional items, intangible amortisation, related tax credits/charges, and the impact of share options with a dilutive effect.

6. Employee post employment benefits

The table above summarises the movements during the year in the Group's various defined benefit pension schemes in Ireland, the UK and Continental Europe. The current/past service cost is charged in the Income Statement, net of the finance income on scheme assets. The actuarial (loss)/gain is recognised in the Statement of Comprehensive Income, in accordance with the amendment to IAS 19 Actuarial Gains and Losses, Group Plans and Disclosures.

7. Dividends and share buy back

The directors have proposed a final dividend for 2010, subject to shareholder approval at the AGM of 1.2 cent per share. In accordance with IFRS, this dividend has not been provided for in the balance sheet at 31 December 2010.

On 17 November 2010, the Company purchased 17m Fyffes Ordinary €0.06 cent shares in the market at an aggregate cost of €5.3m. On the same date, it cancelled 3,946,610 Ordinary €0.06 shares previously held as treasury shares. At 31 December 2010, the Company and subsidiary companies held 32,075,000 Fyffes plc Ordinary shares (2009: 19,021,000). The right to dividends on these shares has been waived and they are excluded from the calculation of earnings per share.

8. Notes supporting cash flow statement

8.1 Cash generated from operations

8.2 Cash flows from investing activities

8.3 Cash flows from financing activities

8.4 Analysis of movement in net funds in the year

9. Reconciliation of other reserves