Tiger Brand's share price surged as high as 19% on Friday following the food-producing company announcing that its CEO Noel Doyle will step down and be replaced by Tjaart Kruger.
Doyle will remain available to Tiger Brands until March 31, 2024, to facilitate a proper handover.
The shares hit a high of R176.39 on Friday, closing the day 1.19% up at R164.70.
In a statement, the group said following the board’s annual review of the company’s strategy, it had concluded that new leadership was required to respond to the challenges currently facing the company.
“The board and Noel Doyle have jointly agreed that Noel will step down as chief executive officer of the company and accordingly as executive director and member of the social, ethics, and transformation committee,” it said.
According to Tiger Brands, during his tenure as CEO, Doyle and his team were required to navigate the challenges of Covid-19, civil unrest, global supply changes and high levels of inflation.
“In this period the company’s underlying operating profit trajectory was stabilised, and there have been many significant improvements in key internal operating metrics.
“The board thanks Noel for his contribution over 20 years of service with Tiger Brands and wishes him well for the future,” it said.
The group said after a targeted process to identify a suitable successor, the board is pleased to announce that Kruger has been appointed as CEO and executive director of the company, effective November 1, 2023.
“Tjaart is a CA (SA) with a PMD from Harvard Business School and has more than 30 years of leadership experience at multiple leading South African FMCG companies.
“He sharpened his career through previous experience at Tiger Brands, where he fulfilled the role of managing director of the pharmaceuticals and grains divisions over the period 2001 – 2007, and his most recent leadership role serving as CEO of Premier Foods over the period 2011 – 2021, where he successfully led Premier Foods’ expansion and growth strategy,” Tiger Brands said.
The group said Tjaart had signed a 26-month contract with Tiger Brands.
“The board believes that this appointment will provide certainty to the company, the market, and other key stakeholders, and accelerate the execution of the company’s strategy and value creation for shareholders.
“The board will commence a process to identify a suitable successor for the CEO role in due course to ensure an orderly transition at the end of Tjaart’s tenure,” the group said.
Meanwhile, the group also released its voluntary trading statement for the year ended September 30, 2023, on Friday.
The group posted that headline earnings per share from total operations for the reported period were expected to differ by between -5% and +2% (or between -85 cents and +34 cents) than the 1 702.4 cents reported in the 2022 financial year.
Earnings per share is expected to drop by as much as 159 cents from the 1 762.2 cents reported last year.
The group said despite lower operating income, group earnings were supported by better-than-expected growth in income from associates.
Group operating income for the reported period would end lower than the 2022 financial year.
“The ongoing challenges of fully recovering higher input costs persisted in the second half resulting in marginally lower volumes. This, together with the year-on-year impact of incremental retrenchment costs of approximately R100 million proved too significant to be offset by the group’s cost reduction initiatives, which will end ahead of the R460 million target previously guided,” it said.
The group said Beverages, Home & Personal Care performed well.
“Tiger Food Services Solutions (previously Out of Home), Exports and Deciduous Fruit were more than offset by poor performances in Rice, Bakeries, despite recording volume growth, Groceries, and Snacks & Treats, with the latter two businesses operating in categories marked by absolute volume declines,” it said.