Shares in Five Roses owner plummet after dismal trading update
By Robert Laing - Jan 28th, 08:56
Fast moving consumer goods group AVI warned shareholders that its interim sales were flat and its headline earnings would decline by up to 7%.
The downbeat trading statement sent AVI’s share price down 9% to R95.16.
The group, whose brands include Bakers biscuits, Willards chips and Five Roses tea, is scheduled to release its results for the six months to end-December on March 11.
AVI said its interim revenue grew just a fraction, 0.2%, from the R7.3bn it reported for the first half of its 2018 financial year.
It expects to report its interim headline earnings per share (HEPS) fell to about R3.05 from R3.26, a drop of about 6.5%.
Basic earnings, which will include provisions for the significant restructuring of its Green Cross shoe business, will fall about 7%.
Earnings also suffered from its fishing group I&J locking itself into fuel contracts, thereby losing out when the oil price dropped.
“The trading environment remained difficult with continued pressure on consumer spending resulting in sales volume weakness in many of our businesses and was exacerbated by competitor discounting in some categories,” the company said in its trading statement.
Besides problems at Green Cross, another of AVI’s shoe businesses, Spitz, “was unable to repeat last year’s record December sales volumes”.Business Live
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