Tiger Brands sees more growth

South African food and consumer goods firm Tiger Brands posted a 36% rise in full-year headline earnings per share (EPS) from continuing operations and forecast real profit growth in the year ahead.

The company, which earlier this month said it may offer to buy consumer goods rival AVI in a roughly $760-million cash and shares deal, said on Tuesday headline EPS from continuing operations rose to 1 194,7 cents per share.

Including its drugs unit Adcock Ingram, which was unbundled in August, headline EPS rose 19% to 1 524,1 cents. Tiger Brands said its total dividend increased 19% to 786 cents per share.

Tiger Brands is considering offering R8-billion in cash and shares for AVI to create a South African heavyweight consumer goods company better able to expand in Africa.

AVI has snubbed the approach, saying it did not make commercial sense, but its major shareholder, Coronation Fund Managers, indicated its support for any takeover bid for the consumer goods firm.

Tiger Brands, which has since said it is actively working toward making a firm offer for the maker of Frisco coffee and Five Roses tea, did not give any further information about the potential takeover in the results statement on Tuesday.

The company said that while it anticipates difficult trading conditions in 2009, it expects to report real growth in headline EPS in the year ahead.

Tiger Brands is also in the process of selling its 73,16% equity stake in fishing unit Sea Harvest to a consortium led by Brimstone Investment Corporation for R541-million.

The company said turnover from continuing operations rose 23%, inflated by rising food prices, and operating income increased 17% to R2,06-billion.

Peter Matlare, CEO of Tiger Brands, said in a statement that the company’s total turnover included recently acquired African businesses, Kenya’s Haco Industries and Cameroon’s Chococam.

Matlare said these two businesses would be used to take Tiger Brands’s businesses to the rest of the African continent.

Headline EPS is the main profit gauge in South Africa and strips out certain one-off, financial and non-trading items.—Reuters

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