Consumer goods group AVI's revenue for the 11 months to last month was 12.4% higher than in the comparable period of the previous year.
AVI, which owns brands such as Five Roses, Bakers, Ciro, Frisco and Willards, reported that its Snackworks division showed an increase of 20.8%, boosting revenue from R1,5bn to R1,8bn. Personal care and footwear brands rose 16.6% and 6.4% respectively.
“I suppose what we are seeing is a result of the group's strong brands; people are still willing to spend on them despite the recession,” said Absa analyst Christopher Gilmour.
“It's a bit surprising, I wouldn't have thought that in this environment AVI would show such a good performance,” he said.
Although growth in demand for the group's food and beverage brands had slowed progressively through the years as consumers' disposable income had come under pressure, the personal care category had continued to perform strongly within the company's brands, the group said.
It said that although the group's consolidated gross profit margin had stabilised in the second half of the year, it was still slightly below the level achieved in the second half of the previous year.
Coronation Fund Managers investment analyst Sarah-Jane Alexander said the group looked “fine” overall and there was nothing unusual in the results. “It was expected,” she said.
Alexander said the consumer goods company had reinvested to support volume in some categories and this seemed to have worked.
The group's consolidated headline earnings per share for the continuing operations for the year ending June 30 were expected to increase between 5% and 10%.
Consolidated earnings per share for the same period were also expected to increase between 5% and 10%.
The group, however, has highlighted the fact that its efforts to disinvest from the Argentinian hake and shrimp operations conducted by Alpesca have been frustrated by prospective purchasers' reduced access to funding caused by the global liquidity crisis.
“The board remains committed to disinvesting from this asset and believes that improving global liquidity will assist in achieving a disposal during the next year,” a statement said.
Source: Business Day
Published courtesy of
