| Tue 15 Feb 2011, 15:11 | | TBS - Tiger Brands Limited - Trading Update |
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TBS
TIIH
TBS - Tiger Brands Limited - Trading Update
TIGER BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN code: ZAE000071080
("the Company")
TRADING UPDATE
TRADING
The economic environment in which the Company has been operating continues to
be challenging. Whilst the South African economy has moved into a recovery
phase, consumer spending continues to be impacted by low levels of job
creation and a shrinking labour market. Although the current low interest
rate environment has brought some relief to the consumer, the tight economic
conditions continue to exert pressure on consumer expenditure, particularly
in the non-durable sector.
At a trading level, the Company`s rice, groceries, beverages and home &
personal care categories have achieved good volume growth for the current
financial year to date. This is consistent with the improved performances
recorded in the last quarter of the previous financial year. However, the
Company`s overall sales volume growth has been constrained, with volumes
being under pressure primarily in the maize and wheat categories.
Flour volumes, in particular, have softened as a result of the highly
competitive trading environment. Core volume growth in the snacks & treats
category has been subdued, although sales have benefited from recent new
product introductions.
The trading environment is expected to improve in the second half, but group
operating margins are likely to remain under pressure.
Reduced operating debt levels and continuing low interest rates are expected
to impact positively on the results for 2011.
EXPANSION INTO REST OF AFRICA
Good progress has been made with regard to the finalisation of the three
acquisitions which were announced in November 2010. It is expected that
these acquisitions will be brought to account by Tiger Brands during the
course of the current financial year.
Consistent with Tiger Brands` growth strategy for the rest of the African
Continent, shareholders are advised that Tiger Brands has concluded an
agreement to acquire the entire issued share capital of Davita Trading
(Proprietary) Limited, a South African company engaged in the export of
powdered seasonings and beverage products to customers primarily on the
African Continent. This acquisition will further increase the Company`s
footprint on the Continent.
Full details of this acquisition, including pro-forma financial effects, are
included in a separate announcement being released on SENS simultaneously
with this trading update.
Bryanston
15 February 2011
Sponsor:
J.P. Morgan Equities Limited
Date: 15/02/2011 15:11:01 Produced by the JSE SENS Department.
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