Tiger Brands eyes a double-digit interim growth as it cut costs
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DURBAN - TIGER Brands’ share price rose by more than 7 percent on the JSE yesterday after the South African packaged goods company said it expects a double-digit growth in earnings for the six months to end March as it cut costs.
The share price leapt to a day-high of R221.90 a share in the morning.
The group released a second trading update and revised up its earnings for the period. It now expected its headline earnings per share (Heps) from total operations for the six months to end March to surge by between 48 percent and 55 percent or by between 235 cents a share and 269c, and higher than 489c reported last year.
Its earnings per share (Eps) from total operations was likely to rise by between 295 percent and 305 percent or by between 619c and 640c, much higher than the Eps of 210c reported a year earlier.
In the first trading update released in mid-February, Tiger Brands expected an increase of between 35 and 45 percent in Heps, while its Eps was expected to increase by between 265 and 285 percent.
“The improved results in comparison to the trading statement of February 17 are primarily due to cost savings achieved in sales and distribution,” the group said.
The significant increase expected in Heps from total operations for the six months to end March was primarily due to the fact that the first six months of last year included significant losses recorded by the company’s value added meat products (Vamp) business, Tiger Brands said.
Tiger Brands sold the Vamp business in two separate transactions for R428 million to Molare and Silver Blade Abattoir last year.
In the upcoming results, the group has treated the Vamp business as a discontinued business. Tiger Brands said it did not expect to report impairment charges in the current period after it reported a R557m charge last year.
“The ranges provided in terms of Eps do not include any further
impairment adjustments to those recorded last year. This will, however, be assessed further at period-end,” the group said.
The group also expects its Heps from continuing operations to increase by between 15 and 22 percent while
it expects Eps from continuing operations to increase by between 120 and 130 percent. The group will release its half-year results on May 20.
Tiger Brands share price rose 4.59 percent to R216.67 at the close of the JSE yesterday.