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

Food and beverages giant PepsiCo makes offer to acquire Pioneer Foods
19/07/2019 - 10:18
In a vote of confidence about SA’s long-term prospects, New York-based food and beverages giant PepsiCo has made an offer to buy Pioneer Food Group, which makes Sasko breads and Ceres juices, in a deal worth at least R25.4bn.

AB InBev offloads Australian unit for $11.3bn
19/07/2019 - 09:03
Anheuser-Busch InBev (AB InBev), which shelved plans to list its Asia Pacific business in Hong Kong, said it will sell Australian subsidiary Carlton & United Breweries (CUB) to Japan’s Asahi Group for about $11.3bn (R157bn).

SAFW competitions offers entry into fashion industry
19/07/2019 - 08:41
It opened the door for David Tlale to showcase his designs at New York Fashion Work, Mmuso Maxwell to supply his garments to retail giant Woolworths and Clinton Lotter to take his work to the UK. Now, South African Fashion Week (SAFW) is once again looking to grow the fashion and creative industry by opening it to emerging designers.

Amazon offers $10 to Prime Day shoppers for access to their data
18/07/2019 - 09:53
Amazon.com has a promotion for US shoppers on Prime Day, the 48-hour marketing blitz that started recently: earn $10 of credit if you let Amazon track the websites you visit.

Johnson & Johnson certain it will prevail in baby powder and opioid lawsuits
17/07/2019 - 14:00
Johnson & Johnson (J&J) said that the healthcare conglomerate will come out on the winning side of thousands of legal claims over its baby powder and opioid products.