JSE-listed Tiger Brands' results for the year ended September 30 were impacted on by the unbundling of its interest in Oceana, the challenging operating environment and a slower-than-anticipated recovery in the Value Added Meat Products (VAMP) business.

Despite the challenging backdrop, total revenue from continuing operations increased by 3% to R29.2-billion, driven by price inflation of 5% and partially offset by an overall volume decline of 2%.

Lower volumes, coupled with the inability to fully recover input costs, put gross margins under pressure, resulting in a 20% year-on-year decline in group operating income, before impairments and abnormal items, to R2.6-billion.

Headline earnings per share (HEPS) from continuing operations declined by 17% to R13.49, compared with the HEPS of R16.33 reported for the prior financial year.

Earnings per share (EPS) from continuing operations, on the other hand, increased by 55% to R23.64, from R15.30 in the prior year, mainly as a result of a R2-billion capital surplus arising from capital profits realised and a fair value gain relating to the unbundling of the company's interest in Oceana.

This capital surplus had no impact on HEPS.

HEPS from total operations decreased by 17% to R13.22, while EPS from total operations increased by 60% to R23.33.

Tiger Brands declared a dividend of R4.34 for the period.

PORTFOLIO OPTIMISATION

Considerable progress had been made in terms of optimising the portfolio, with firm decisions having been made in respect of the VAMP and Deli Foods businesses.

A formal due diligence was under way for the proposed disposal of the VAMP business.

Similarly, after a thorough review of the future prospects of Deli Foods, in Nigeria, which had been in a loss-making position for a prolonged period of time, and following an assessment of the various alternatives available, the board approved the closure of the business.

This process is expected to be concluded in the next few months.

The ongoing review of Tiger Brands' portfolio will ensure that the group is appropriately positioned for growth.

The company expects the significant macroeconomic challenges facing the country to persist for the foreseeable future, while the operating environment is expected to remain subdued as a result of the country’s high unemployment rate, the ongoing challenges relating to State-owned enterprises and increased competitive pressure.

To this end, Tiger Brands will prioritise investment in its key brands, while delivering product innovations to meet changing consumer needs.

Further, it will leverage the strength of its brands by evaluating opportunities to stretch its brands within and across existing and new product categories.

In terms of Tiger Brands' Africa growth strategy, the company is pursuing organic growth by driving category growth through targeted brand investments, developing superior routes to market and investing in enabling capabilities.

To protect margins in a constrained consumer environment, the company has placed increased focus on driving productivity and securing cost efficiencies across the value chain.