JSE-listed fast-moving consumer goods company Tiger Brands Group’s revenue for the four months ended January 31, was up 3% year-on-year, driven by both volume and price inflation.

The volume growth was a consequence of strategic initiatives to reduce costs and invest behind price to ensure the group’s price points are relevant and affordable to consumers, the company says.

The strong performance continued the recovery demonstrated in the second half of 2024. The performance, in line with expectations, was driven by a focus on operational excellence, consistent execution and various continuous improvement initiatives.

The consumer environment is beginning to reflect early stages of recovery, which is evidenced by the improved trading across both its retail and wholesale channels for the four months under review, Tiger Brands says.

Domestic inflation for food and non-alcoholic beverages is projected to be below consumer price inflation, at about 2.5% in the fourth quarter of the 2024 calendar year, which, combined with reduced interest rates, has seen a positive impact on consumer spending for the same period.

Volume growth over the four months was achieved across the majority of business units, which benefitted from a strong performance delivery across all financial metrics.

The group’s gross margin percentage for the period exceeded that of the prior year, driven mainly by the product mix, as well as various strategic initiatives across product value engineering and labour efficiency.

“It is pleasing to note the year-on-year improvement in operating profit for the four-month period, driven by the gross margin leverage as well as continuous improvement initiatives aimed at optimising operating costs,” the company said.

Additionally, income from associates performed in line with expectations.

The company continues to direct its financial and human capital resources to the business segments that generate, or have the potential to generate, the highest returns.

To date, significant progress has been made on the disposal of certain noncore brands and business segments. The Baby Wellbeing division sale of business transaction concluded in November 2024 is subject to suspensive conditions, including the approval of the competition authorities.

Once competition approval is granted, the transaction will proceed to closing, Tiger Brands says.

Further, the disposal of Tiger Brands' equity interest in Empresas Carozzi, in Chile, has progressed well, with most of the suspensive conditions expected to be fulfilled during the course of March.

Additional disposal processes are currently in progress and are progressing in accordance with envisaged timelines, it adds.

There have been further refinements to the operating model to ensure business unit classifications are strategically and operationally aligned. These changes are aligned with previous guidance on the optimisation of the operating model, as well as the pending disposal of the Baby Wellbeing business.

Baby Nutrition has now been integrated into the Tiger Brands Culinary business unit, which now comprises local and international culinary sales, Davita and Baby Nutrition.

The synergistic benefits from this consolidation will be experienced across the value chain, the company notes.

“This decision aligns with the company's priorities to accelerate consumer-centricity, execution excellence, cost efficiency and sustainable profitability, by allowing better leverage of shared value chains and capabilities across the Baby Nutrition and Culinary businesses,” says Tiger Brands.

“Management maintains its optimism for the year ahead, where volume and profit growth will remain a key focus. The self-help, continuous improvement initiatives, together with the improved macroeconomic outlook, are anticipated to have a compounding effect on performance delivery.”

In line with its strategic priorities, the company will focus on various strategic thrusts, including shaping its portfolio, with the review and disposal of noncore categories and business units ongoing, with several processes under way during the 2025 financial year.

Similarly, it will focus on superior channel presence, with bread brand Albany's recovery within general trade remaining an immediate priority while building on the momentum of the store roll-out and in-store execution across all channels.

In terms of costs, continuous improvement initiatives are expected to deliver savings within guidance.

Additionally, the company will focus on deliberate growth platforms, including driving affordability as a core focus, particularly in the Bakeries, Culinary and Grains business units, which it sees continuing from the first half of 2024.

Further, Tiger Brands plans to focus on rejuvenating its brands, with a deliberate focus on its power brands to maximise return on marketing investment and recovering market share being key to long-term value creation.

The company expects to release its results for the six months to March 31, on or about May 28.

Owing to the continued momentum of the initiatives, earnings growth is expected to perform in line with guidance for the six months to end-March, the company says.