AVI’s group revenue up despite consumer constraints
bdlive.co.za - Nov 4th 2014, 09:12
Despite the constrained consumer environment, demand for AVI’s brands was sound, chair Gavin Tipper said at the group’s annual general meeting on Thursday.
Consumers’ disposable income has come under pressure due to high levels of unemployment and indebtedness.
AVI, which owns brands including Five Roses, Bakers, and Willards said consolidated group revenue for the first quarter ended September was 11.9% higher than that for the same period in the prior year.
The group’s mix of fashion and food and beverage brands has rendered it more resilient than rivals like Pioneer Foods and Tiger Brands. However, it still faces a squeeze from rising input costs and spending constraints. AVI’s consolidated gross profit margin was maintained while the operating profit margin improved substantially due to gains in I&J’s operating profit as a result of improved export revenues from the weaker rand and a better fishing performance during the quarter.
The company’s Entyce, Snackworks and Indigo businesses traded satisfactorily with input cost pressures offset by selling price increases taken in the second half of the prior financial year.
"Spitz and Kurt Geiger grew operating profit in the first quarter notwithstanding pressure on unit sales volumes. Green Cross’s retail business exceeded target revenue despite a material loss of trading days caused by its major store-refurbishment programme, but wholesale business volumes were lower than budget," Mr Tipper said.
Results for the first half of the 2015 financial year are dependent on achieving budgeted sales volumes over the festive season. According to analysts, the strain on disposable income, which has been predominant in the middle to lower income bands, will see a search for bargains and value over the festive season, as local shoppers have become far more discerning and price conscious.From DFM Publishers (Pty) Ltd
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