Tiger Brands newly appointed CEO Lawrence Mac Dougall said that resilient brands drove a solid underlying performance in a challenging environment.
Tiger Brands’ total turnover from continuing operations grew 11% to R31.7bn with Grains, which contributes 40% to revenue, was up 13% driven entirely by inflation caused by drought albeit good performance from the Pasta and Oats categories. Consumer saw turnover increase by 9% to R11 billion (2015: R10,1 billion). Snacks & Treats recovered in the second half reporting turnover growth of 6% to R2,3 billion as technical challenges in the Gums and Jellies plant were resolved. Growth in the Personal Care category increased by 8% to R682 million (2015: R631 million), however reflected the pressure on consumer spending as well as exacerbated by aggressive competitor pricing strategies and brand support.
East Africa saw turnover increasing by 26% to R960 million (2015: R763 million), benefiting from a recovery in Haco’s volumes despite tough regional economic conditions. Nigerian business Deli Foods grew by 16% to R477 million (2015: R412 million) continued to be affected by the devaluation of the local currency impacting cost of key raw material imports as well as power outages. Foreign exchange volatility also affected Uganda and Rwanda businesses.
Source: JSE SENS
The share price has been trading in a long sideways channel highlighted in the daily chart. Resistance level has been broken today with next target 40000c. Bias remains to the long side however the share price will come under pressure if there are to be any interest rates hikes by SARB tomorrow as well as the possibility of Sovereign downgrades which we think are unlikely.