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Tiger Brands ‘solid’ but Pioneer sees profit drop
Tiger Brands ‘solid’ but Pioneer sees profit drop

Tiger Brands ‘solid’ but Pioneer sees profit drop

RETAILER NEWS

By Mark Allix - Feb 24th 2017, 14:49

Drought hits Pioneer’s earnings, while a ‘solid domestic market’ saves Tiger Brands from weak trading conditions across Africa. 

Two of SA’s largest food groups have released differing trading updates in difficult markets.

Pioneer Food Group said on Tuesday that it expected headline earnings per share for the six months to March 2017 to be between 38% and 55% lower than in the previous corresponding period. It blamed the drought, which affected maize and fruit, saying this should be nonrecurring in the future.

On the same day, Tiger Brands said group turnover rose 12% for the four-month period ended January 2017, compared with the same period in 2016.

Tiger Brands said this was driven by a "solid domestic performance", as weak trading conditions on the rest of the continent, coupled with a stronger rand, hurt exports and the international business.

"The focus will continue to be on optimising margins without sacrificing market share," Tiger Brands said. "This will be … through targeted investment in marketing and route-to-market activities, as well as through ongoing cost-saving initiatives."

Pioneer said headline earnings per share for the previous six-month period ended March 2016 were significantly grown by a share-based payment gain of R143m related to an empowerment transaction.

In the second half of the year to September 2017, Pioneer expected an improvement in maize profitability; a satisfactory raisin crop; new Weet-Bix capacity coming on stream; the commissioning of its Aeroton bakery upgrade in Gauteng; bakeries in the Western Cape regaining momentum; and a respite in key cost inputs.

Tiger Brands said good progress had been made with the sale of its 51% shareholding in East African Tiger Brands Industries to its Ethiopian partner. The company had also decided to dispose of its 51% stake in its Kenyan business, Haco Tiger Brands, to its Kenyan partner.

© BusinessLIVE MMXVII 

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