“The company continues to believe that Nigeria is central to its expansionary ambitions. Short to medium term action plans are being implemented to turn around the performance of the DFM business,” [DATA TBS:Tiger Brands] said.
“The company is also in the process of evaluating a number of key strategic initiatives aimed at rapidly expanding the business into more sustainable, value-added categories. At this stage, there is still a significant amount of work that needs to be completed to properly evaluate new category opportunities.”
(READ MORE: S.Africa's Tiger Brands to boost stake in Dangote Flour)
The fast-moving consumer goods (FMCG) manufacturer and marketer added that the current underperformance of DFM led to the company conducting a review of the carrying value of its investment in DFM.
“A decision has been taken to impair the full carrying value of the goodwill and intangible assets relating to the investment. The value of the impairment amounts to 849 million rand which will be included in abnormal items in the group income statement for the half year ended 31 March 2014,” said the company.
“The carrying value of the company’s investment in DFM will be re-evaluated at the end of the financial year. At that time the company will be able to assess the impact of recent actions that would have been implemented as well as the results of its review of the new category opportunities in DFM.”
(READ MORE: Rising middle class helps Africa’s FMCG market growth)
Tiger Brands, which is expected to release its interim results on 21 May 2014, indicated that its earnings per share from continuing operations for the six months ending 31 March 2014 should increase by between six and 10 per cent.
Headline earnings per share from continuing operations is expected to increase by between five per cent and nine per cent compared to the corresponding figure for the same period last year.
Total earnings per share, including discontinued operations, is expected to increase by between seven and 11 per cent compared to the corresponding period and headline earnings per share, including discontinued operations, is expected to increase by between four and eight per cent.