AVI, whose extensive brand portfolio includes 33 owned brands and 20 international brands, saw revenue from continuing operations increase to 5.4 billion rand for the six months ending 31 December 2013 from 4.8 billion rand for the same period in 2012.
“AVI’s results for the first semester reflect a solid overall performance in a period of increasing pressure on consumer spending and rising input costs stemming from the weaker rand. Revenue from continuing operations rose by 10.4 per cent with selling price increases across the portfolio and volume growth in most of our categories,” [DATA AVI:AVI Limited] said.
“Snackworks delivered another excellent result with strong volume growth in biscuits and sustained margin improvement in snacks. I&J benefited from the weaker rand and higher sales volumes to deliver an improved result. Margins in the footwear and apparel businesses were impacted by the weaker rand and increasing pressure on consumer spending, with some amelioration as a result of space growth in Kurt Geiger and Spitz.”
(READ MORE: S.Africa’s AVI shows solid FY13 revenue growth)
Operating profit, before capital items, rose 11 per cent from 921 million rand in 2012 to one billion rand and 2013 while income from investments decreased by 38 per cent from 4.5 million rand to 2.8 million rand.
Profit before taxation increased by 27 per cent from 905 million rand in 2012 to 1.1 billion rand in 2013, interim dividend was up 33 per cent to 120 cents per share, in line with reduced dividend cover, and diluted basic earnings per share grew by 22 per cent from 214 cents to 261 cents.
“We expect the current constrained consumer demand environment to persist and possibly worsen if interest rates continue to rise. The cost pressure attributable to the weaker rand will result in continued margin pressure that, in turn, is likely to result in selling price increases in many of our categories in the second semester,” it said.
“The board is confident that AVI is well positioned to weather a difficult trading environment while continuing to pursue growth opportunities from the current brand portfolio and remaining vigilant for brand acquisition opportunities both domestically and regionally.”