JSE-listed fast-moving consumer goods producer Tiger Brands has declared a 19% higher interim dividend of R4.15 apiece for the six months ended March 31.

It also declared an additional special dividend of R1.8-billion, or R12.16 a share, which the company attributes to management’s ability to drive growth and cash generation in what had been a challenging consumer environment.

The group grew its total earnings per share (EPS) from R8.92 in the six months ended March 31, 2024, to R13.47 in the six months under review, marking a 51% year-on-year increase.

EPS from continuing operations increased by 78% year-on-year to R15.08.

The group’s operating income increased by 30% year-on-year to R1.8-billion in the reporting period, resulting in its net cash position improving to R8.6-billion, from R5.9-billion in the prior comparable six months.

Despite early signs of economic recovery, which provided reprieve for food basket inflation, consumers remain under pressure and continue to seek value, Tiger Brands South Africa CEO Tjaart Kruger states.

He adds that the company continues to significantly improve its management of working capital, which, together with proceeds received from portfolio optimisation disposals in the period, resulted in the improved net cash position.

The group generated total proceeds of R4.3-billion from the sale of noncore operations in the six months under review.

In turn, improving working capital management contributed to a cash inflow of R1-billion in the first half of the 2025 financial year, compared with a cash outflow of R1.4-billion in the first half of the 2024 financial year.

Headline earnings per share (HEPS) grew by 17.6% year-on-year to R9.51 in the six months under review, including all its operations, while HEPS for continuing operations increased by 33.8% to R10.21.

The variations between HEPS and EPS mainly relates to profit derived from the disposal of Tiger Brands’ Baby Wellbeing division and associate company Carozzi.

Tiger Brands’ Maize business and associated wheat mill facility, in Randfontein, Gauteng, has been determined as noncore to the company’s future and is now being sold, in addition to the Langeberg & Ashton Foods (LAF) business, in the Western Cape, that was previously announced as being held for sale.

The group has now identified various categories and divisions where it believes the company has a right-to-win. Other categories and divisions that are considered noncore include King Foods, which is a chocolate business within the Snack Treats and Beverages division, as well as the Chococam subsidiary, in Cameroon.

The company is still evaluating the best-value options and feasible exit plans for these businesses. 

DIVISION PERFORMANCE

In the six months under review, Tiger Brands reported a 37% higher year-on-year operating income of R326-million in the Milling and Baking divisions, which was achieved through operational labour efficiencies, factory optimisation, reduction of returns and damages and better route-to-market efficiencies.

Operating profit in the Grains division grew by 673% year-on-year to R231-million, compared with the same months of last year, with margins also improving by 5.6% to 6.4%. This was owing to strategic price and volume management as well as continuous improvement initiatives such as logistics optimisation and factory efficiencies.

The Culinary division recorded operating income growth of 11.7% year-on-year to R435-million and operating margin improvement to 13.5% on the back of solid revenue growth, favourable channel mix factors and value engineering recipe initiatives in Snacks and Treats.

Tiger Brands’ Home and Personal Care division experienced a challenging first half to the year, however, with operating income having declined by 6.7% year-on-year to R292-million owing to flat underlying volume growth in the period.

The company explains continued competitor intensity on pricing and innovation in personal care resulted in significant volume declines on Ingrams products, in particular, while aerosol can supply challenges impacted on the profitability of Doom products.

Tiger Brands spent R500-million in capital expenditure during the reporting six months.

Kruger expects the Randfontein mill and the LAF disposals to conclude in the second half of the financial year and for the company to continue driving innovation and growth within its Culinary, Grains and Beverages segments.

The company is also focused on channel mix optimisation in the Personal Care division, as well as innovation to regain market share and volumes.