SOUTH AFRICA – Tiger Brands, JSE listed packaged food processor expects its headline earnings per share (Heps) from total operations to decline by between 27 and 30 percent i.e. 357c – 397c, down from last year’s 1 322c.
This is a revised earnings guidance for the year to end September, which is slightly higher from the company’s trading statement of August which indicated that its Heps was expected to decline by between 35 and 40 percent.
The improvement according to the food company follows a better-than-anticipated operating income performance in the second half, which was supported by no disruptions to the supply chain in August and September as Covid-19 infections slowed significantly in SA.
“In addition, improved performances were achieved from Cameroon and other export markets, while a better than anticipated performance from Carozzi aided income from associates,” the group said.
Profitability also benefitted from improved cost and efficiency management in the last quarter.
Tiger brands expects its earnings per share (Eps) from total operations to decline by between 72 and 75 percent.
Despite this, Tiger brands anticipates that its operating income for the second six months to be lower than the same period last year, with further gross margin compression evident.
The manufacturing company expects its earnings per share (Eps) from total operations to decline by between 72 and 75 percent, to be between 1 680 cents a share and 1 750c, down from last year’s 2 333c.
Tiger Brands also expected its Eps from continuing operations, excluding Deli Foods & value-added meat products (Vamp), to be between 65 and 68 percent lower than the 2 617c reported last year.
While its Heps from continuing operations, excluding Deli Foods and Vamp, was expected to be between 22 and 25 percent lower than the 1 556c reported last year.
In last year the owner of Jungle Oats, reported a 17% decline in its headline earnings per share for the year ended 30 September 2019 to 1 349c, compared to 1 633c reported in 2018.
The company however managed to increase revenue by 3% to R29.2bn.
Operating income declined 20% to R2.6bn, excluding the impact of the value-added meat products business, the group operating income would have only declined by 11% to R3.2bn.
Recently, the South Africa based firm announced the completion of sale of its value-added meat product (VAMP) business units to Silver Blade, a subsidiary of Country Bird Holdings.
In August the group announced that it had entered into an agreement with Silver Blade, to acquire the meat processing businesses at Germiston, Polokwane and Pretoria for R153 million (US$8.7m), together with all the inventories located at the units for R158 million (US$9m).
With the total transaction amounting to R311 million, R40 million (US$2.3m) will be paid on November 1, and the balance on April 1, 2021.
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