KwaZulu-Natal Correspondent
DURBAN Tiger Brands produced lacklustre headline earnings growth in the six months to March and the branded food and health-care group already is warning shareholders that annual figures will fall.
The group unveiled a 7% growth in headline earnings to 327,6c yesterday as Tiger became the latest victim of the rand's appreciation and declared an unchanged 79c interim dividend.
However, the results were ahead of analysts' expectations, who had predicted lower headline earnings this week due to the losses on the currency translations.
CEO Nick Dennis said yesterday the group had achieved "exceptional profits" in the second six months to September last year, partly attributable to the effect of the currency benefits related to exports and the rand-translated earnings of the foreign associates.
Based on the current rand strength, coupled with trading conditions, Dennis said that second-half earnings were forecast to be "well below those of the comparable period". Consequently, fullyear headline earnings would show a decrease.
But Tiger would continue to focus on product innovation and processes and invest in its core brands to ensure the long-term delivery of profitable top-line growth.
In this vein, Dennis also announced that the group had reached agreement to acquire the Pfizer Laboratories Parke-Med division subject to Competition Commission approval.
The generics company has an extensive range of cardiovascular and antidepressant products, and Dennis expected the acquisition to complement Tiger's existing generics business.
During the period under review revenue lifted 16% to R11,3bn, but net profit after tax fell 9% to R455,3m. The operating margin dropped to 7,1% from 8,7% in 2002.
Fast-moving consumer goods exports, excluding fishing, suffered an R111,8m collapse to a R39,9m pretax loss, mainly through the reversal of currency translation profits and the further realised R51m foreign exchange losses from foreign monetary assets.
Operating income fell 12%, despite a 16% revenue growth.
Dennis said the results were adversely affected by the sharp decline in the maize price, which had led to falling market prices for maize products and pressure on margins.
Meanwhile, the Appeal Court ruled against investment holding company Tiger Oats yesterday in its bid to get the SA Revenue Services to refund regional establishment levies paid in 1995, 1996 and 1997.
May 16 2003 07:10:59:000AM Nicola Jenvey Business Day 1st Edition
Friday
16 May 2003
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