JSE-listed Tiger Brands’ shares fell by 9% on Wednesday morning after the company announced that its revenue for the four months to January 31 had decreased by 5% year-on-year, driven by price deflation of 1% and volume declines of 4%.
In a voluntary trading update to the market, the company stated that trading during the four months under review had been characterised by intense competition in a low-growth, value-driven consumer environment.
It further said that the decrease in revenue had been aggravated by price deflation in some soft commodities and higher levels of discounting in the domestic business as the group seeks to manage its competitiveness on shelf.
The overall volume decline, meanwhile, had been driven mainly by the Home and Personal Care and Export categories.
“Home Care’s performance was impacted primarily by lower demand due to a delayed pest season and an unfavourable product mix, whilst Personal Care was negatively affected by increased competition and overall market contraction,” the company stated.
Further, its Deciduous Fruits business was negatively impacted on by the strength of the rand, while the Exports business was negatively affected by foreign currency liquidity issues, tight credit management and the relative strength of the rand.
Tiger Brands cautioned that its performance for the remainder of the current financial year was likely to be impacted by the slow start to the year, with any meaningful recovery dependent on an improved consumer environment.
“We will continue to focus on driving cost saving initiatives, while optimising product mix, applying tactical promotional activity to drive volume growth, while protecting margins, and working with our customers to drive channel and distribution growth,” it added.