Total Produce 'Well-Positioned' To Navigate COVID-19 Challenges, Says Analyst
A leading industry analyst has said that Total Produce is "well-positioned" to navigate through the coronavirus crisis, due to its strong financial standing and retail exposure.
Patrick Higgins of Goodbody Stockbrokers was commenting following the issuing of a COVID-19 update by the fresh produce firm, in which it said it is 'continuing to trade satisfactorily', despite the challenging economic environment.
"Total Produce plays a vital role in continuing to supply essential foodstuffs in response to the pandemic and consequently supply chains are functioning adequately and have remained open across all key markets," Higgins wrote in a briefing note.
"While the group has experienced reduced demand from the foodservice sector (c.20% of direct and indirect sales), demand from retailers (80%) has been robust as consumers buying patterns shift. Note, we estimate Dole retail exposure is closer to 90%."
In its statement, Total Produce said that due to the 'unprecedented nature' of the outbreak, it is not yet possible to determine the impact of coronavirus on its full-year performance, adding that it expects earnings to be lower than in FY19.
It added that it expects 'satisfactory' results for the year, noting that the 'diverse structure' of the business means that it is capable of responding to the current challenge in the marketplace.
"Overall, the expected yoy decline in earnings in FY20 due to COVID-19 is unsurprising given the scale of the challenges currently faced," Higgins said.
"However, we note the group’s high exposure to the retail sector and coupled with its strong financial position, we consider Total Produce to be well positioned to navigate its way through this challenging period."
Total Produce has postponed its AGM, originally scheduled for 15 May, to 28 August.
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