Food group Tiger Brands to sell King Korn sorghum, Ace maize operations
Food group Tiger Brands TBSJ.J expects to sell off more brands including Ace maize meal and King Korn sorghum, and is pursuing short- to medium-term volume growth of up to 3%, its CEO said after posting a 4% rise in annual earnings.
South Africa's largest food producer is in the middle of a turnaround plan that includes adjusting its product pricing, cutting costs, and reducing the number of brands and products it sells.
Group CEO Tjaart Kruger told investors that had meant sacrificing sales volumes during the year as it walked away from "bad businesses".
The owner of Jungle Oats and Koo baked beans grew revenue by just 1% to 37.7 billion rand ($2 billion) as a 7% hike in prices drove consumers to buy less, with volumes declining 6% in the year to Sept. 30.
The company said volumes improved in the second half, falling just 2% as prices rose by 5%.
In the short- to medium-term Kruger said volume growth should be around 1%-3%, and in the long-term, around 4%-6%.
This will be driven by making products more affordable through initiatives such as switching packaging to plastic from glass and recipe re-formulation, Kruger said.
The company, which also sells Purity baby food, has been selling non-core brands, including some in home and personal care and in baby wellbeing, to focus its resources on core brands.
Multiple disposals are under way, and the group has appointed advisors for the sales of its Ace maize and King Food brand, which makes sorghum porridge and beer, Kruger said, with the process expected to be concluded by the first half of 2025.
The company, which reported headline earnings per share of 1,810 cents on Wednesday, up 4%, is also looking to consolidate its seven inland bakeries into one new "super bakery", with the latest technology and equipment, Kruger said.
That will help it cut conversion costs by 50% and compete better in a "very competitive" bread market, he added.
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