Tiger Brands shows signs of improved performance due to focus on operational efficiency strategy

Tiger Brands delivered an improved financial performance for Tiger Brands for the six months ended 31 March 2021. Cost saving and efficiency initiatives gained traction and helped offset an inability to maintain naked margins as commodity prices soared.  Although there have been no major disruptions to business continuity in the last six months of the Covid-19 period, some businesses were impacted by inbound supply disruptions. As a precautionary measure, contingency plans have been put in place, including a stock build programme for critical and essential products, to mitigate the potential disruption to our internal and external supply chains in the event of a third wave.

“Like many companies in South Africa and globally, we have had to adapt to the impact of Covid-19 as well as to what this has meant across our total value chain. We have been clear, that in an environment of poor economic growth and highly constrained consumer spending, our focus needed to be on the levers we are able to control and influence. This has translated into an improved result for the group,” said Tiger Brands CEO Noel Doyle.

“We are acutely aware that the trading environment is likely to continue to be significantly depressed for some time to come. Given this, we will intensify ongoing cost saving initiatives in our supply chain, while prioritising initiatives that drive our top line growth,” said Doyle.

Notwithstanding the impact of this poor environment, the group remains confident that operating income will continue to show improvement in the second six months of its financial year, relative to the same periods in both 2019 and 2020.

“Tiger Brands and its products are substantial parts of our consumers’ lives, and this is evident in these results as South Africans continue to focus on pantry and home basics,” he said in reviewing segment performances across the group.

Key group highlights* include:

  • Revenue increased by 8% to R16.4 billion
  • Group operating income** increased by 16% to R1.6 billion
  • Group operating margin** increased to 9.6% from 8.9%
  • EPS increased to 755 cents per share from 333 cps
  • HEPS increased 21% to 741 cents per share
  • Dividends per share of 320 cents

* From continuing operations

** Before impairments, abnormal items and IFRS2 charges

“We are at an interesting moment in our journey as an organisation. A crossroads where we celebrate our centenary and heritage but also focus on our future – our next 100 years. It is an inflection point where we don’t just need to understand the future of food, but also what this means for our consumers,” said Doyle.

“Our guiding focus is to nourish, and nurture more lives every day. Our aim is to create value for our people, our customers, our consumers and our shareholders, while playing our part to ensure they thrive,” said Doyle.

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