Group revenue rose by 11.4 per cent from 9.22 billion rand to 10.27 billion rand due to price increases and volume growth in all divisions.
[DATA AVI:AVI Limited] is a South African based company specialising in the fast moving consumer goods (FMCG) and fashion markets, with a portfolio consisting of 53 brands, 33 owned brands and over 20 international brands.
Gross profit increased by 7.8 per cent to 4.43 billion rand while operating profit rose by 12.2 per cent from 1.53 billion rand to 1.71 billion rand.
Headline earnings from continuing operations increased by 14.9 per cent to 1.2 billion rand while headline earnings per share rose by 12.4 per cent to 383.6 cents.
Cash generated by operations increased by 28.6 per cent to 2 billion rand while the board declared a 15.4 per cent increase in the final dividend to 180 cents per share, bringing the total dividend for the year to 300 cents.
Entyce Beverages, AVI’s producer of tea, coffee, juice and creamers, posted a 12.5 per cent increase in revenue to 2.72 billion rand with operating profit increasing by 11.2 per cent to 442.4 million rand due to volume and sales growth in tea and creamer revenue.
Tea revenue grew by 15.8 per cent while coffee revenue rose by 6.8 per cent and creamer revenue up by 18.6 per cent.
Snackworx, the group’s manufacturer of well-known South African snack brands such as Bakers, Provita and Willards, delivered a 14 per cent revenue growth to 3 billion rand with operating profit increasing by 22.3 per cent to 474.5 million rand with biscuit and snack revenue growing by 15 per cent and 11 per cent respectively.
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Despite bad weather on wet fleet catch rates, I&J, the group’s deep sea hake fishing company, reported a 14.5 per cent growth in revenue to 1.82 billion rand with operating profit at 244.6 million rand due to an improvement in fishing fleet availability and freezer vessel catch rates.
In AVI’s fashion brands, revenue rose by 5.6 per cent to 2.66 billion rand with operating profit decreasing by 2.9 per cent to 560 million rand.
Indigo, the group’s manufacturer of Yardley cosmetic products, reported revenue growth of 6.3 per cent to 1.04 billion rand with a good performance from body spray volumes despite an offset by a reduction in Coty related profits.
In the Footwear and apparel category, revenue increased by 5.2 per cent to 1.62 billion rand while operating profit decreased by 5.3 per cent to 388.1 million rand due to lower footwear sales volume.
Spitz, AVI’s premium branded footwear retailer, posted revenue growth of 6.5 per cent due to weak consumer spending and price increases while Kurt Geiger clothing’s revenue rose by 21 per cent owing to several new stores opened during the period.
Green Cross, a comfort footwear retailer, reported low wholesale volumes due weaker demand and increased competition, resulting in operating profit decreasing to 58.8 million rand.
AVI said that a constrained consumer environment is likely to worsen due to rising interest rates, however the group’s I&J, Entyce, Snackworks and Indigo brands are expected to remain resilient.
The group also believes that new store openings for Spitz, Green Cross and Kurt Greiger should positively impact earnings.
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“Notwithstanding expectations of a difficult trading environment we remain confident that our unique brand portfolio can continue to deliver growth in key categories,” said the group.
“Accordingly, 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.”