Packaged goods company Tiger Brands’ results for the financial year ended September 30 reflect steady progress against the company’s strategic priorities with an improved underlying performance from the core business, offset by one-off costs of R732-million (pre-tax) related to a canned vegetable product recall and the civil unrest in July, the company notes.

“The year under review can be characterised as a year of two halves, with a solid first half result, driven primarily by a strong first quarter, offset in part by slower top-line growth in the second half.

“Despite revenue challenges, our focus on cost savings and improvements in production efficiencies resulted in positive operating leverage for the full year,” says CEO Noel Doyle.  

Domestic revenue in the second half was adversely impacted on by volume declines across the grains portfolio, as well as the groceries and snacks and treats businesses, compounded by lower overall price inflation relative to the first half.

Despite the muted second half growth, domestic revenue for the year increased by 5% to R27.6-billion. Effective cost containment and improved production efficiencies resulted in positive operating leverage, with domestic operating income, excluding one-off items, increasing by 19% to R2.9-billion.

Total revenue from the exports and international businesses increased by 7% to R3.6-billion, which was attributable to a strong start to the year as trade in Nigeria resumed following the resolution of the trademark dispute with a former distributor.

The second half, however, proved challenging for exports, the deciduous fruit business, as well as Tiger Brands’ operation in Cameroon. Operating income for the year reduced by 7% to R96-million owing to increased losses in deciduous fruit.

The board has declared a final ordinary dividend of 506c apiece for the period.

This, together with the interim ordinary dividend of 320c apiece, brings the total dividends for the year to 826c apiece.

INNOVATION

In the past year, Tiger Brands launched 46 innovation projects, an increase of 31% on the previous year, tapping into areas that are becoming critical drivers for consumer buying habits, including value, health and nutrition, and the growing trend to snack.

Since the launch of the Tiger Brands Venture Capital Fund in May, over 500 expressions of interest were received. The company is in the final stages of making an offer for a business that is closely aligned to its health and nutrition strategy, with a further nine opportunities being assessed.

In the medium to long term, the venture capital fund will provide the company with inorganic growth opportunities, it notes.

Further, through its agriculture aggregator model, the company further increased the number of black smallholder farmers participating in its value chain, successfully onboarding two black female-owned aggregators and expanding the number of farmers supported to 157.

Projects to the value of R28.6-million were approved in the last year, with a total of eight black aggregators cultivating white beans, wheat, groundnuts and tomatoes.

Efforts to build an inclusive culture have also paid dividends, with Tiger Brands having been named the 2021 Southern Africa Gender Mainstreaming Champion in the listed company category at the annual Accenture Gender Mainstreaming Awards.

As part of the company’s ongoing efforts to provide a safe working environment, voluntary Covid-19 workplace vaccination clinics were introduced during the second half of the year.