Advertise with

SA’s listeria scandal halved the sales of Tiger Brand’s meat products division and pushed it into a loss, contributing to the group’s overall sales and profit decline.
SA’s listeria scandal halved the sales of Tiger Brand’s meat products division and pushed it into a loss, contributing to the group’s overall sales and profit decline.

Tiger Brands maintains dividend despite falling sales and profit


By Robert Laing - Nov 22nd 2018, 11:00

SA’s listeria scandal halved the sales of Tiger Brand’s meat products division and pushed it into a loss, contributing to the group’s overall sales and profit decline. 

The fast-moving consumer goods group’s revenue fell 9% to R28.5bn and its net profit by 22.5% to R2.4bn, its results for the year to end-September showed.

Tiger Brands nevertheless maintained its final dividend at R7.02, keeping its dividend for the 2018 financial year at R10.80, the same as in the previous financial year.

Its value-added meat products division — which houses Enterprise, whose polony was found to be the source of listeria-related fatalities in March — suffered a 53% drop in revenue to R1.1bn and contributed an operating loss of R252m from a profit of R104.2m in the previous year.

The results statement said Tiger Brands expects its product liability insurance to cover legal claims it is likely to face from listeria victims.

“The company has product liability insurance cover appropriate for a group of its scale. Coverage has been confirmed by the insurers, subject to the terms and limits of the policy. The policy will accordingly respond to the claim within its term in the event that the company is held liable,” the results statement said.

Tiger Brands generated 87% of its revenue from its domestic market, which declined 9% to R24.7bn.

Its exports and international division suffered a 10% decline in revenue to R3.8bn.

In contrast to Pioneer Foods, which said its fruit exports benefited from a poor US crop and weaker rand, Tiger Brands said: “The deciduous fruit business had a disappointing year, with lower fruit yields and declining volumes, resulting in an operating loss for the year.”

The group’s largest division, milling and baking, which contributed 31% of total revenue, suffered a 6.6% decline in sales to R8.9bn, partly because maize prices fell 24%.

Tiger Brands’ “other grains” division grew revenue 2% to R3.9bn due to 9% growth in the volume sold.

“The strong growth in volumes in this segment was driven by an outstanding performance in rice, with Tastic reflecting improved market share,” CEO Lawrence MacDougall said in the results statement.

“Pasta and noodles also delivered a solid performance. However, the operating income decline of 32% to R342m reflects the intensity of competition in the main meal carbohydrate segment.”
Business Live 

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.