Group turnover was up 19.1 per cent to 27 billion rand for the year ended 30 September 2013 from 22.6 billion rand in the previous comparative year.
Operating profit was down 11.6 per cent to 3.1 billion rand. Headline earnings per share were also down 3.8 per cent to 1,624 cents from 1,689 in 2012.
“Trading conditions for the year were once again difficult. The challenges facing the global economy have undoubtedly affected Tiger Brands sphere of operations,” the group said in a statement.
In South Africa in particular, the difficulties facing the group have been driven largely by the trade-off between the group’s ability to recover cost increases through appropriate pricing, and the pressure on consumers to purchase at acceptable price points.”
Total group operating income declined by 11.6 per cent to 3.1 billion rand. This was largely caused by a 389.2 million rand operating loss incurred by Dangote Flour Mills, which included once-off retrenchment costs and increased stock and bad debt provisions of 85 million rand.
In 4 October last year, Tiger Brands acquired 63.35 per cent of the issued share capital of Nigeria’s Dangote Flour Mills Plc for a purchase consideration of 1.5 billion rand. Dangote Flour Mills manufactures flour, pasta and noodles.
[DATA TBS:Tiger Brands] made three other acquisitions during the year, including the Mars sugar confectionery trademarks in South Africa for 10 million rand, and the Mrs Balls chutney trademarks for 475 million rand.
It also increased its shareholding in Oceana Group Limited by 4.5 per cent to 41.9 per cent for a purchase consideration of 314 million rand.
The group’s consumer brands faced extremely tough trading conditions. Divisional turnover declined by 1.7 per cent to R3.7 billion rand, and operating income fell by 33.1 per cent to 361 million rand.
Brands under the group include Albany bread, Purity, Oros, Tastic, All Gold and Doom, among others.
This was due to risen volume pressures from widening price differentials relative to aggressive competitor pricing.
International and exports turnover however increased to 190.8 million rand from 451 million in the previous year.
“Trading conditions are expected to remain challenging for the foreseeable future, with the ongoing weakness in the domestic economy continuing to affect consumers spending ability,” the group said.
“The brand preference for Tiger Brands products remains high and will be strengthened through increased brand investment and innovation.”