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PFG
PFG
PFG - Pioneer Food Group Limited - Voluntary trading update for the four
months to 31 January 2012
Pioneer Food Group Limited
Incorporated in the Republic of South Africa
Registration number: 1996/017676/06
Share code: PFG
ISIN code: ZAE000118279
("Pioneer Foods" or "the Group")
Voluntary trading update for the four months to 31 January 2012
As is customary Pioneer Foods provides this voluntary update on the Group`s
trading for the four months to 31 January 2012.
Revenue for the four months increased by 12% to R6 billion with volumes
contracting by between 3% and 5% on average in the Group`s product basket as
discretionary spend by consumers remain constrained. Price inflation is
estimated at between 15% and 17% for the period under review.
Contributing factors include the rampant increase of raw material costs with
maize spot prices increasing by more than 100% over the corresponding period,
some fruit juice concentrates by more than 90% and sugar by more than 20% to
name a few.
Other operating costs also experienced substantial inflationary pressure
during the period under review, including diesel that increased by more than
40%, electricity by between 25% and 40% and average payroll costs by more
than 8% over the corresponding period.
Sales volume performance for wheaten flour and bread is impacted by the
increased volume base in the comparative period resulting from the gross
profit reduction in that period. As a result wheaten flour sales volumes were
down and some market share was shed in the standard bread market. Share of
the expanding premium bread market has grown, though off a low base.
Maize meal consumption in general has been marginally weaker, though it is
still at a relative high base compared to wheat. The Group maintained maize
pricing and market leadership and volumes were stable by and large.
Rice and pasta volumes increased despite the increase of cheaper imports.
Rice prices increased whereas pasta prices remained constant.
The Agri business continued to face pressure in the broiler and egg markets.
The industry is grappling with cheaper imports, systemic oversupply and
historically high maize prices.
Breakfast cereals performed well with an expanded range of value-added
products in Weet-Bix, Nature`s Source and Otees.
The launch of Moir`s biscuits has been well received and the production roll-
out is progressing to expectation. The outlook for raisins is improving and
volumes should normalise in the current financial year.
Pepsi is continuing to grow volumes close to double-digits in a stable price
environment. Long life fruit juice maintained price leadership and stable
volumes. Further production improvement will follow as relocated equipment
comes on stream in Wadeville and Ceres.
The Group will provide further earnings guidance prior to the closed period
in the week commencing 12 March 2012.
The information provided has not been reviewed or reported on by the Group`s
independent auditors.
Paarl
15 February 2012
Sponsor
PSG Capital
Date: 15/02/2012 09:46:09 Produced by the JSE SENS Department.
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