AVI, the food and consumer goods group of more than 50 brands, said yesterday that it expected headline earnings per share for the 12 months ending June 30 to increase by between 5 and 7 percent over the prior year.
Its financial year was characterised by a tough macro environment for consumers, the July riots, supply chain challenges globally and domestically, load-shedding disruptions to operations, and material input cost inflation in the second semester, a trading statement said.
Group revenue increased by 4.3 percent, supported by improved sales volumes in key categories and price increases to offset significant cost pressures.
Headline earnings per share were forecast to increase from last year’s 499.9 cents to between 524.8 and 534.8c per share.
Apart from I&J, there was revenue growth in all categories with demand in Snackworks and Entyce resilient, despite the price increases needed to protect gross margins.
Personal care revenue was 17.7 percent higher in the second semester versus the prior year, supported by easing lockdown restrictions, albeit still well below pre-Covid levels.
Second semester revenue in the footwear and apparel brands grew 14 percent with an improved sales mix, despite lower volumes and supply chain issues, and the benefit of the ongoing improvement in Green Cross brand sales.
I&J’s revenue declined, with lower fish volumes, and the impact of a stronger rand on export revenues, partially offset by a sustained post-Covid recovery in abalone, with improved pricing and demand in key Asian markets.
Gross profit margins for the year were largely protected by hedging and price increases.
Input cost pressures were acute in both the Entyce and Snackworks businesses and selling price increases did not fully recover the impact of higher input costs, lowering gross margins marginally for the full year.
I&J’s profitability in the second semester was negatively affected by the stronger rand exchange rate on export sales, and a substantially higher fuel cost for the fishing fleet.
The original I&J Black Staff scheme matured in December 2021 and was replaced by an updated scheme, and R103.3 million was paid to I&J black employees on the termination of the scheme.