Tiger Brands reels from listeriosis fallout, but still pays dividend
By Andries Mahlangu - May 24th 2018, 10:05
The interim dividend is unchanged from a year ago.
Tiger Brands, Africa’s biggest food producer, said that first-half profit took a knock from the fallout of the deadly listeriosis outbreak, which was traced to its facility in Limpopo.
The company closed its Enterprise Foods meat-processing facility and recalled products such polony from supermarket shelves — measures that have cost it at least R365m.
Tiger Brands also faces legal claims from victims’ families.
The outbreak has claimed more than 200 lives so far.
Tiger Brands said that pretax profit from continuing operations fell 18% to R1.9bn in the six months to end-March.
Excluding abnormal product recall costs, pretax profit from continuing operations fell 2% to R2.3bn.
The gross profit margin widened by 80 basis points to 33.3%.
Group revenue from continuing operations declined 4% to R15.7bn, hit by price deflation and falling volumes.
The company said its home and personal care division, and the deciduous fruit operation also weighed on its performance.
Headline earnings per share (HEPS) dropped 16% to R8.68.
An interim dividend of R3.78 per share was declared, unchanged from a year ago.
Tiger Brands is expecting stiff competition in the local market for the rest of the financial year, and no meaningful recovery in its international markets.
Its processed meat facilities would remain shut for most of the second half, it said, while it completed remedial work and awaited guidance from the Department of Health.
Investors have marked down the shares fairly aggressively since the Department of Health broke the news in early March that the listeria strain responsible for the outbreak had been traced back to Enterprise, with the share price sliding from highs of R425 to R349.28.
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