In its year-end results to September 2022, the maker of Jungle Oats and Tastic rice, highlighted its total revenue from continuing operations increased by 10% to R34 billion (US$1.98 billion), boosted by price inflation of 11% and a marginal overall volume decline of 1%.
Earnings per share from continuing operations increased by 65% to 1 762 cents, while headline earnings per share from continuing operations increased by 51% to 1 702 cents.
It declared a full-year dividend to shareholders of 973c, an 18% increase over the previous year, and representing about an R1.75 billion (US$101.7m) payout. Its final dividend came in 29% higher at 653 cents.
Group operating income, before impairments and non-operational items, increased by 53% to R3,4bn. In addition, about R1.5 billion (US$87.2m) was returned to shareholders through a share buyback programme.
Tiger Brand CEO Noel Doyle said, “The operating environment this past year has remained tough, with ongoing supply and cost challenges exacerbated by prolonged periods of load shedding. Consumer households also continue to face sustained pressure.
“However, despite these challenges, we have not only delivered a credible set of results, but have also maintained focus on investing in the future to ensure sustainable long-term returns and build societal value.”
Tiger Brand said it was able to raise selling prices by 11% in its 2022 year, although it did experience a slight dip in volumes in its domestic business.
On price increases, Doyle said the company has had challenging conversations on price increases with retailers.
“In regards to the price increases, you need to bring your A-game justification for it. Retailers have a lot of visibility in terms of their house brands, into what your cost space looks like, and if you don’t have your ducks in a row around facts and motivation on price increase, you won’t be entertained.
“We haven’t had any serious stop-supply issues with customers over price increases. It’s been tough, but it’s been tough quite a while,” he said.
Looking at segmental performance, the company attained a revenue growth in grains of 6%, driven by cost-led price increases across the Milling and Baking segments and a strong volume performance in Rice, offsetting decline in performance by Maize.
Although the Oat-based breakfast (Jungle) and Pasta businesses delivered solid revenue growth, higher raw material, and distribution costs as well as sub-optimal factory performances adversely impacted profitability.
Meanwhile, Consumer Brands recorded an increase in revenue of 12%, driven by a solid second half recovery in Snacks & Treats, which was significantly impacted by industrial action in the first half, as well as sustained performances from Beverages, Groceries and Out of Home.
Under the segment, Groceries reported 15% growth in revenue, Snacks & Treats increased revenue by 4%, Beverages’ revenue increased by 11%, and Baby segment attained 4% revenue growth.
Total revenue for Exports and International increased by 19% to R4.3 billion (US$250m), with total operating income increasing to R350 million (US$20.35m).
A significant driver of this performance came from the Deciduous Fruit business, which benefited from higher international fruit prices and improved volumes, resulting in revenue increasing by 32%.
The Exports business grew revenue by 14% following improved sales of powdered soft drinks and seasoning into key export markets in the second half.