Fyffes is seeking to make an acquisition worth between £200 million and £300 million in the near future, most likely in Germany. The company says it is actively looking at several potential European acquisitions, particularly in markets where the company is not currently the market leader, like Germany or France.

The vice-chairman, Mr Carl McCann, said Germany was the "obvious target" for the acquisition. He was speaking after yesterday's annual general meeting in Dublin.

He said Fyffes had no plans to reenter the US fruit market and eastern Europe was not sufficiently developed to interest the company.

"We can comfortably do a deal worth up to £300 million and we have a strong preference for doing one deal rather than a collection of smaller ones," he said. The company has £85 million in its balance sheet which, combined with borrowings, would make a deal of this size possible, said Mr McCann.

He added that Fyffes still ranks number two in Europe, behind Chiquita, and hopes to outgrow this company at some stage in the future.

At the annual general meeting shareholders were told the company's profits were likely to significantly increase due to an improvement in the international fruit market. "There was a problem of over-supply in the market last year, but this has now tapered off," said Mr McCann.

Last year the company made cost reductions of £3.3 million and it hopes to exceed this in 1998, mainly through rationalisation of its extensive distribution network.

The company chairman, Mr Neil McCann, said tax reductions introduced by the British and Irish Governments would substantially benefit the company. Fyffes is still awaiting a decision from the Competition Authority on the sale of its 18.5 per cent stake in United Beverages Holdings to Guinness Ireland Group, worth over £8.6 million. Mr McCann said the decision was "taking a long time" and hoped it would be issued soon.

Mr McCann said the company now had the "best balance sheet in the fruit business" and there was no reason that the growth in profits from £31.8 million in 1993 to £54 million last year could not be continued.

"While things are going well, this is not the time to be complacent, we are still not where we want to be and earnings enhancing acquisitions will continue," he said.