AVI earnings slip as consumer spending remains constrained
By Karl Gernetzky - Sep 9th, 09:33
Consumer goods group AVI, whose brands include footwear retailer Spitz and Five Roses tea, trimmed its final dividend 4% in the year to end-June as it continued to feel the pinch from a constrained consumer environment.
Headline earnings per share fell 4.9% to 516.6c while operating profit declined 3% on a like-for-like basis during the period, but the company said it is targeting profit growth across its business in the 2020 financial year.
Strong brands and favourable price levels for some materials were some of the factors AVI cited as reasons to be optimistic, even as it battles low business confidence and pressure on consumer’s disposable income.
“The trading environment is expected to remain difficult, with constrained consumer spending. Our expectation is that many of our categories will continue to have low, or even negative, growth rates until there is a meaningful improvement in the economy,” it said.
The company maintained its dividend cover, declaring a 250c per share final dividend, down from the prior period’s 260c. This brought its full-year dividend to 415c, from 435c previously.
AVI said it is confident it is well-positioned to compete in a tough consumer environment, saying it will consider local and international acquisitions in the next financial year, if appropriate.
The company’s net debt, which included higher lease liabilities due to new accounting standards, rose to R2.44bn at end-June from R1.27bn in the prior period.Business Live
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