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Nigerian flour mill weighs on Tiger Brands
Tiger Brands (TBS) on Wednesday, 20 November 2013, reported a slight contraction in headline earnings per share for its year ended September‚ weighed by its recently acquired stake in Dangote Flour Mills (DFM) of Nigeria.
Including DFM‚ in which the group acquired a controlling interest of 63.35% in October last year‚ headline earnings per share of R16.24 were down 3.8%. With DFM excluded‚ headline earnings per share would have risen 5.4% to R17.81.
Tiger Brand CEO Peter Matlare said the performance was subdued due to difficult trading conditions in SA and an operating loss incurred by DFM.
"Our performance was also driven largely by the trade-off between our ability to recover cost increases through appropriate pricing and the pressure on consumer's spending ability‚" Matlare said.
Group turnover was up 19% to R27bn‚ while operating profit declined by 11.6% to R3.1bn.
Matlare said although Tiger Brands' "strategic journey towards building a sustainable platform for future growth" continued‚ the results were disappointing and reflected "a difficult transitionary phase" as the group repositioned its domestic business and drove expansion in the rest of Africa.
In addition to DFM and an increased stake in Oceana‚ Tiger Brands acquired Mrs Ball's Chutney and some sugar confectionary trademarks from Mars during the period.
Matlare said Tiger Brands was "well-positioned for the year ahead"‚ despite various challenges.
Tiger Brands shares were trading more than 5% lower on the JSE in midday trade.
Source: I-Net Bridge
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