| Tue 19 Feb 2008, 16:24 | | TBS - Tiger Brands - Trading Update Adcock Ingram |
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TBS
TIIH
TBS - Tiger Brands - Trading Update, Adcock Ingram Unbundling And
Changes To The Board
TIGER BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN code: ZAE000071080
TIGER BRANDS LIMITED ("Tiger Brands" or "the company")
TRADING UPDATE, ADCOCK INGRAM UNBUNDLING AND CHANGES TO THE BOARD
Year to date performance
FMCG
At the time of the release of the 2007 year-end results, there was an
anticipation of a slowing down in the rate of growth in consumer expenditure.
In addition, it was envisaged that another year of significant cost push
inflation, particularly in respect of raw material inputs, would continue to
contribute to the high levels of price inflation experienced in 2007. Both of
these factors have impacted on year to date trading, with sales volumes still
showing growth, but at levels lower than for the same period last year.
Within FMCG, the performance of the beverage business has been severely affected
by the wet and cool conditions, particularly in the inland areas. The trading
performance for the remainder of the first six months will need to be carefully
assessed in order to determine whether an impairment of the carrying value of
the goodwill associated with this business may be necessary.
The overall outlook for the FMCG business remains challenging and the company
will do well to achieve real growth in operating income from continuing
operations for the full year ending 30 September 2008.
Healthcare
The topline performance of the pharmaceutical business has been pleasing, with
indications of a recovery in market shares. However, pricing and input cost
pressures remain significant. The hospital products business has performed in
line with expectations.
Following the healthcare division`s disappointing performance in 2007, the
outlook for the current year is for a modest increase in operating profit.
Trading Statement
The certainty necessary for the issuing of a trading statement in respect of the
half year ending 31 March 2008 does not yet exist. A trading statement will be
released as and when there is the required degree of certainty.
Adcock Ingram unbundling
In an announcement published on 6 November 2007, Tiger Brands informed the
market of its intention to unbundle and separately list Adcock Ingram on the JSE
Limited by the end of March 2008. Significant progress has been made in relation
to the completion of the formalities for the unbundling. However, on 11 February
2008, Tiger Brands was informed of a referral by the Competition Commission to
the Competition Tribunal of a case of collusion against its subsidiary company
Adcock Ingram Critical Care (Pty) Ltd and two other unrelated parties. In
response to these allegations, law firm Edward Nathan Sonnenbergs has been
requested, with the assistance of Counsel, to conduct an urgent investigation
into the matters set out in the aforesaid referral notice.
Tiger Brands remains committed to the unbundling based on the strategic merits
of the separation of its Healthcare interests from its FMCG business.
However, at this stage it is deemed appropriate to defer the unbundling until
Tiger Brands is in a position to advise shareholders of the outcome of the
investigation. As a consequence of this, the unbundling will not be implemented
by the previously advised target date of end March 2008. It is not possible to
give any further indication of the extent of the delay.
Changes to the Board
As shareholders have previously been advised, Mr Nick Dennis retires as Chief
Executive Officer of the company at the conclusion of today`s annual general
meeting of shareholders. It has previously been announced that Mr Peter Matlare
will assume the position of Chief Executive Officer with effect from 1 April
2008. Mr Brian Connellan resigned as a non executive director of the company
with effect from today.
Sandton
Date: 19 February 2008
Sponsor
JP Morgan Equities Limited
Date: 19/02/2008 16:24:26 Produced by the JSE SENS Department.
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