Tiger Brands’ interim results impacted by trading conditions, leadership transition

27th May 2024

By: Tasneem Bulbulia

Senior Contributing Editor Online


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JSE-listed Tiger Brands says its results for the six months ended March 31 reflect a tough trading environment, with negative volume growth across retail and wholesale channels, as well as the impact of its shift in focus to restructuring and implementing a new operating model.

Since Tjaart Kruger’s appointment as CEO on November 1, 2023, the group has now finalised the appointment of the new leadership team.

Thushen Govender assumed the role of CFO on January 1, followed by the appointment of MDs from within the organisation for each of the six business units on February 1.

The new leadership team has been driving forward key strategic priorities aimed at revitalising the group, stimulating growth and enhancing profitability sustainably, the company avers.

It anticipates that the effect of key initiatives will start to reflect on the company’s financial results in the short term.

For the period under review, total revenue from continuing operations regressed by 1% to R19.2-billion relative to the same period last year, driven by price inflation of 8%, but offset by a reduction in volumes of 9%.

In divisions such as Bakeries, the loss in volume was a deliberate strategy to reduce the reliance on suboptimal promotional activity and to improve price realisations, Tiger Brands points out.

Volume growth in Exports was offset by declines in the Domestic Business.

Conversion-cost efficiencies, as well as reduced loadshedding, helped mitigate gross margin compression.

Group operating income decreased by 3% to R1.3-billion, while operating margin was relatively flat at 6.9%.

The profit on sale of a noncore brand within Personal Care (Status trademark) of R128-million increased profit, including non-operational items, by 4% to R1.5-billion.

Income from associates increased by 44% to R396-million, driven largely by strong operational performances from Carozzi and  National Foods.

Net financing costs for the period amounted to R163-million, compared with R94-million in the same period last year.

The increase is in line with higher average debt levels, as well as higher interest rates.

Plans are in place to optimise working capital and thereby minimise operating cash requirements.

The group’s effective tax rate, prior to fair value losses, non-operational items and income from associates, improved from 29.7% to 29% compared to the previous year.

This is largely owing to investment allowances received on qualifying major capital projects.

Earnings per share (EPS) from continuing operations increased by 10% to 827c from 749c in the prior comparable period.

Headline earnings per share (HEPS) from continuing operations was marginally up at 743c, compared with 731c in the prior comparable period.

The variation in EPS when compared with HEPS is owing to the inclusion of the profit on sale of the Status trademark in EPS, which is excluded from HEPS.

EPS from total operations increased by 19% to 892c from 749c in the prior comparable period owing to the accounting of insurance proceeds related to previously written-off and obsolete stock within the Value-Added Meats business.

This business has been disposed of and disclosed as a discontinued operation.

HEPS from total operations increased by 11% to 808c from 731c.

Tiger Brands declared an interim ordinary dividend of 350c apiece for the period, in line with its dividend policy of 1.75 x cover based on HEPS and in line with the higher HEPS.

This resulted in a 9% increase relative to the prior year interim dividend.


Tiger Brands expects the operating landscape to remain challenging.

Forecasts indicate restrained wage growth, with any potential relief from interest rate adjustments to be marginal and gradual, it points out.

Given the high levels of consumer indebtedness and limited prospects for substantial labour market improvements within a subdued economic backdrop, it is anticipated consumers will continue to face significant hurdles.

The next reporting cycle will mark the first six-month period under new leadership with the first green shoots of the company’s turnaround efforts expected to emerge, Tiger Brands highlights.

“We are confident in the immediate measures taken to streamline our operating model, coupled with clear targets for further simplification and enhancement. Moreover, our robust portfolio of market-leading brands positions the group for improved performance in the short-term,” it avers.

Looking ahead, the company’s focused strategy is expected to enable strategic investments in brands, activities and segments that are poised to deliver superior and sustainable long-term returns.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



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