South African food and pharmaceutical group Tiger Brands on Thursday reported a 19% increase in its final headline earnings per share to 927,3 cents for the year to September 30, from 778,2 cents in the previous comparative period.
Tiger Brands announced a final dividend per share of 270 cents, which resulted in a total dividend per share for the year of 370 cents, up 28% from 290 cents in the 2003 financial year.
Revenue for the year was R25,422-billion, up 10% from R23,039-billion in the 2003 financial year. Net profit for the year was R1,396-billion, up 11% from the group’s previous year of R1,260-billion.
Looking ahead, Tiger Brands said that with its array of branded consumer and health-care products, it is well placed to benefit from the favourable trading outlook.
“This, together with a continued focus on innovation and operating efficiencies, is expected to contribute to real earnings growth in 2005,” Tiger Brands said.
Turning back to the 2004 financial year, Tiger Brands said stronger domestic demand in the latter part of the year contributed to this better-than-expected result, with good performances from most operations.
The results include those of retail concern the Spar group, which was unbundled and listed on the JSE Securities Exchange on October 18.
On a pro forma basis, excluding the results of Spar from both 2003 and 2004, headline earnings per share reflect an improvement of 22%, Tiger Brands said.
During the year, Tiger Brands further focused on extracting synergies across its food and health-care operations and successfully integrated the various acquisitions implemented in 2003.
Greater emphasis on cost containment and operational efficiencies has enabled the company to protect, and in some instances, enhance margins.
Tiger Brands’ operating margin increased to 9,3%, from 8,3% in 2003.
Excluding Spar and after adjusting for intra group sales, the operating margin from continuing operations improved to 13,9% (2003: 12,1%).
Acquisitions during the course of the previous financial year, together with the acquisition by Spar of Nelspruit Wholesalers with effect from November 1 2003, have had a significant effect on revenue and operating income comparisons.
On a strictly comparable basis, excluding the effect of acquisitions, revenue and operating income increased by 3% and 15% respectively.
The increase in operating income was achieved through good performances by the domestic food and consumer health-care operations.
Regulated health-care and hospital products performed well, with regulated health care benefiting, in particular, from a strong contribution by generic medicines.
Exports returned to profitability after recording a significant loss in 2003.
Spar achieved a satisfactory result, reflecting the challenges of trading in a highly competitive and low inflationary environment.
The group’s fishing businesses produced disappointing results, with both Sea Harvest and Oceana recording lower levels of profitability compared with the previous year.
The income statement reflects a net abnormal charge of R124,1-million.
This includes an impairment provision of R159,1-million against the carrying value of the investment in associate company C & T Malt. The continuing low level of profitability in its United States, Canadian and United Kingdom operations necessitated the write-down.
Assisted by the current positive trend in consumer sentiment, domestic growth is expected to continue in the year ahead. — I-Net Bridge