Tiger grits its teeth after tough year. Despite the listeriosis outbreak contributing to a slide in earnings, the

group has maintained its dividend due to the strength of its balance sheet.

Tiger Brands has had a tough year. While it faces a tough environment for fast

moving consumer goods, it's also had to deal with the listeriosis outbreak of

late last year and early this year, which resulted in the recall of

potentially affected products, the suspension of operations at its Value Added

Meat Products (VAMP) facilities and the threat of lawsuits. Nevertheless, the

group has maintained its full-year dividend at last year's level.

The branded food producer says it faced rising input costs in the latter part

of the year as the rand weakened significantly. However, manufacturers were

forced to absorb some of these costs to minimise consumer inflation and

maximise volumes. It said the increase in VAT and further increases in the

cost of transport and essential services weakened consumer demand in all

categories except maize, where increased supply and price deflation stimulated

demand. While the suspension at VAMP contributed to a 4% decline in volumes,

so too did Groceries and Home and Personal Care. This was partially offset by

volume and market share growth in Grains.

Revenue declined by 9% to 28.5 rand billion in the year to end-September, with

revenue from its Food business dropping 52% to 1.1 rand billion after it had to

recall products and cease production following last year's outbreak of

listeriosis. Operating income fell 28% to 3.3 rand billion and headline earnings

per share declined by 26% to 1,587c per share. It's maintained its dividend at

1,080c after reducing its dividend cover to 1.75 times. It said this took its

strong balance sheet into account, as well as the once-off impact of the

cessation of operations at VAMP.

Abnormal losses of 422 rand million for the year include the significant impact of

the VAMP product recall in the current year of 380 rand million after insurance

recoveries. Excluding VAMP's trading results and the product recall costs from

the current and prior year, HEPS from continuing operations declined by 11% to

1,881c.

Tiger said following a strategic review it decided to unbundle its 42% stake

in Oceana Group as it didn't fit with the group's core business.

Areas of focus in 2019 will include embedding the new operating model and

implementation of the group's Africa strategy," the person who said it here

which is red "We are confident that the strategy will unlock the full

potential of Tiger Brands and create value for all stakeholders."

Tiger's shares closed 4.8% higher at 284 rand yesterday. Oceana slipped 2.5% to

79.37 rand.

> $JSETBS Tigerbrands. Inverted head and shoulders forming. 285 break opens

306 & 326 targets. Go get 'em tiger ! pic.twitter.com/wZcNgaVOhJ

>

> -- Share_Trader (@KoosKanmar) November 22, 2018

> UPDATE 1-South Africa's Tiger Brands to spin off 42 pct stake in...

https://t.co/GPmvzKbdyH

>

> -- Jagdeep Jiandani (@jjiandani) November 22, 2018