Johannesburg - Fast-moving consumer goods company Tiger Brands seeks to improve profitability from sales into Africa, even after selling its stake in Nigeria’s Dangote.
Tiger Brands says its “resilient” brands drove strong growth in the year to September, especially in the South African market. This led turnover from continuing operations 11 percent higher at R31.7 billion, while operating income before accounting charges increased 5 percent to R4.2 billion.
This, it says, is despite challenging conditions and a year characterised by high inflation in raw material input costs, which was mostly the result of the prolonged drought and significant currency volatility.
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Tiger Brands says the high input inflation was felt across its South African portfolio and it says it will work at improving margins - which could indicate a move to pass the higher input costs onto consumers should the drought’s effects and currency volatility be prolonged.
The overall operating margin before accounting charges declined to 13.4 percent from 14.1 percent, which it says was “influenced by responsible pricing decisions to protect our brand franchises”.
Profit before tax from continuing operations increased by 10 percent to R4.5 billion, after accounting for R335 million in impairment charges related to goodwill and other intangible assets in the Personal Care business.
A higher effective tax rate (before abnormal items, impairments and associate income) of 30.9 percent saw attributable earnings from continuing operations gaining 4 percent to R3.3 billion.
Earnings per share from continuing operations, which excludes the Dangote stake disposed of in February, increased 4 percent to 2 007 cents, while headline earnings per share from continuing operations was up 2 percent to 2 130 cents.
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Tiger Brands has operations in East, West and Central Africa and says it aims to “establish a strong and profitable growth trend in the rest of Africa”.
In addition to its Tuesday results announcement, Tiger Brands announced chairman Andre Parker was stepping down and will be replaced by Khotso Mokhele, who has been a director of Tiger Brands since 2007.
A 702c a share dividend was declared.
IOL
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