Advertise with fastmoving.co.za
 
 

The Listeriosis outbreak in South Africa came back to haunt Tiger Brands.
The Listeriosis outbreak in South Africa came back to haunt Tiger Brands.

Listeriosis outbreak haunts Tiger Brands

RETAILER NEWS

By Sandile Mchunu - Nov 23rd 2018, 10:06

The Listeriosis outbreak in South Africa came back to haunt Tiger Brands, with the group reporting a 26 percent decline in headline earnings per share (Heps) to 1 587 cents a share during the year to end September, while revenue fell 9 percent to R15.87. 

The group said the outbreak and the country’s weak economy also saw its net profit slashed by 20.6 percent to R2.39 billion while operating income fell to R3.3bn.

Tiger Brands pointed to the suspension of its value-added meat products (Vamp) due to the listeriosis outbreak as the reason for the sharp fall in its overall profits.

It also blamed the country’s technical recession, a sharp decline in the value of the rand, the VAT increase, rises in the cost of transport and essential services, and substantial increases in input costs as other factors that had a negative impact on consumer demand.

Chief executive Lawrence MacDougall said closing the Vamp plants had allowed the group to undertake refurbishments at its production facilities and allocate dedicated time for employee retraining.

The group said revenue had declined 9 percent to R28.5bn during the period, while headline earnings per share (Heps) fell 26 percent to 1 587 cents a share.

However, Tiger Brands still managed to declared a dividend of 1 080c a share – unchanged from last year.

It said temporary suspension of operations at the Vamp division in March 2018 accounted for 4 percent of the volume decline as well as abnormal losses of R421 million, which included the significant impact of the product recall of R380m, which is net of insurance recoveries.

MacDougall said Tiger Brands had decided to pursue an unbundling of its entire shareholding in Oceana Group.

The group’s shares, however, slugged off the results, rising to R286.95 from Wednesday’s closing price of R270.90. Tiger shares closed 4.84 percent higher at R284 on the JSE yesterday.

Jordan Weir, a trader at Citadel, said the results were worse than expected.

He said the listeriosis outbreak, together with the VAT increase and slowdown in consumer spending and demand, had pushed the group into the black.

He said Tiger Brands seemed focused on the growth and efficiency of its core business by selling a 42 percent stake in Oceana, which it felt was not aligned to its core operations and brands.
IOL 

Related News

Woolworths carves out market share in SA
27/11/2019 - 10:11
In Australia, David Jones's sales declined 2.1%, with the company saying a store refurbishment contributed to the decline.

Push and pull strategies work together to keep consumers coming back for more
26/11/2019 - 10:20
The retail sector is under increasing pressure as consumers have shrinking disposable income in a strained economy. Maintaining share of wallet is critical. Relying solely on a push route to market strategy from manufacturers into retailers is not enough to get consumers buying products. A pull strategy needs to coexist with the push to drive brand consumption. Integrating these strategies requires intelligent and insightful decision-making. This, in turn, requires data generated through smart technology which provides line of sight across the value chain from manufacturer to distribution, retailer to the consumer.

Tiger Brands still reeling from listeriosis aftershock
26/11/2019 - 09:41
Tiger Brands continued to feel the effects of the listeriosis outbreak in the year to the end of September after the food producer suffered an impairment charge in its value-added meat products (Vamp), following a slower-than-anticipated recovery in the division.

Today’s customers are loyal to speed and convenience, not brands
25/11/2019 - 11:15
Consumer expectations are rapidly shifting as technologies such as mobile, geolocation, social media and increasingly, Internet of Things devices and wearables, connect people to a world of easily accessible information and convenient services. With the ability to browse, compare and order with a few swipes and taps, consumers are becoming trained to value convenience and service above nearly anything else.

Gearing FMCG manufacturing for the red season spike and maximising profits all year round
25/11/2019 - 11:03
As we enter the festive season, demand for Fast-Moving Consumer Goods (FMCG) increases rapidly, often leaving manufacturers scrambling to fulfill orders from their distribution channel. If demand cannot be met, then loss of revenue is inevitable. However, over-production is not an ideal solution either, as it can leave manufacturers sitting with unsold stock that costs money to store.