Price increases lift AVI revenue

An AVI-owned Spitz store in the Rosebank Mall.Picture: Simphiwe Mbokazi

An AVI-owned Spitz store in the Rosebank Mall.Picture: Simphiwe Mbokazi

Published Jan 24, 2017

Share

Johannesburg –

Food producer AVI says revenue for the 6 months to December was 11.6 percent

higher, despite a constrained trading environment.

In a statement

issued on Tuesday, the listed company said the growth reflects a combination of

price increases in response to a weaker rand and higher raw material costs, “and

contextually pleasing volume growth in most of our grocery categories”.

In says, in the grocery

portfolio, selling prices have yet to fully recover rising input costs;

notwithstanding the margin pressure resulting from this, Entyce and Snackworks

both performed soundly with good growth in operating profit for the semester.

The group, which

also plays in the fashion space, adds overall performance by these brands for

the first half was “sound in the context of the difficult trading environment”.

Demand during

December for its core brands was good, with Spitz, in particular, achieving

solid revenue growth compared to December last year, it said.

Both Spitz and

Green Cross achieved operating profit growth for the semester despite pressure

on footwear sales volumes at the materially higher price points necessary to

protect gross profit margin.

Indigo Brands

delivered a pleasing result for the semester with gains in market shares in key

categories, it adds.

Read also:  AVI cautions on choppy waters for shoppers

I&J achieved

profit growth for the semester from favourable exchange rates and improved

fishing in the second quarter, although the result was tempered by a 3 week long

illegal strike at the fishing operations in August which resulted in a

shortfall of about R25 million of operating profit, and impacted negatively on

the group’s trading result for the first half, the company says.

As a

consequences, AVI – which notes there are 0.8 percent more shares in issue

because of new shares issued under its various share schemes – expects headline

earnings per share to be between 7 percent and 9 percent higher.

This puts this

key indicator of a company’s financial performance at between 301 and 307c a

share.

It adds consolidated

earnings per share for the interim period, including capital gains and losses,

are expected to increase by between 8 percent and 10 percent, or a range

between 302 and 308c a share.

Its results

should be released on March 6.

BUSINESS REPORT ONLINE

 

Related Topics: