Johannesburg - Listed fast moving consumer goods company Tiger Brands on Friday announced that its earnings per share (EPS) from all operations were expected to be between 2 007 cents and 2 061 cents per share for the year ended September 30.
The increase in earnings per share, which includes the discontinued Tiger Branded Consumer Goods (TBCG), is a gain of between 88 percent and 93 percent for the period.
Headline earnings per share - a key measure of profitability - will gain by between 18 and 21 percent. Stripping out discontinued operations, earnings per share will gain by between 0 percent and 3 percent, while earning per share on the same basis will grow by between 1 percent and 6 percent.
The company said TBCG, formerly Dangote Flour Mills, will be reflected as a discontinued operation when it releases its year-end results in November.
Tiger bought a 63.5 percent controlling stake in Dangote Flour Mills from Dangote Industries in September 2012 for about $190 million (R2.64 billion), its third purchase in Nigeria at the time.
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However, the company was forced to impair Dangote Flour’s value by R850 million in 2014 because of its underperformance and excess milling capacity in the Nigerian flour market.
The company disposed of TBCG in February.
Tiger Brands, the maker of popular South African brands such as Tastic rice, Jungle Oats, All Gold and Albany bread, has a market capitalisation of more than R72 billion.
New chief executive Lawrence MacDougall, who joined the company in March, would present the financial statements for the first time.
Nick Crail, a portfolio manager at Ashburton Investments, said the earnings update showed the company was keen to show a full picture at the continuing operations level.
“We would use headline earnings per share from continuing operations as the figure to watch.
“In our view, the market has been discounting these earnings numbers, and will be focused on the commentary in the results. With a new chief executive at the helm, the market is interested in his strategic review.”
Another analyst Daniel Isaacs of 36ONE Asset Management said the company had to look at the headline earnings per share from continuing operations as this would give a better idea of the underlying operating performance.
“This number was up 0 percent to 3 percent ,which is in line with market expectations,” said Isaacs.
On Friday, Tiger Brands traded 2.45 percent higher on the JSE to close at R379.13.
BUSINESS REPORT