Tiger Brands says that despite an increase in revenues, its profits dropped over the past year due SA's strained economy, the national lockdown and the impact of Covid-19.
The food group released its annual results for the year ended September 30, 2020 on Friday, which showed that although its revenue increased by 4% from R28.5 billion in 2019 to R29.8 billion for 2020, profits fell from R3.8 billion to R1 billion.
“The results for the year have been disappointing, reflecting the challenges faced by the company in maintaining margins in what was an already difficult consumer environment before the onset of the Covid-19 pandemic,” said its CEO Noel Doyle.
The impact of SA's strained economy on consumer spending, coupled with input cost increases and Covid-19 related costs were key drivers behind the decrease in profits. The group also cut its staff by 400 to reduce costs.
Tiger Brands recently sold its value added meat products business, Enterprise, to poultry company Country Bird Holdings. The group is still facing a class-action lawsuit related to the listeriosis outbreak.
The food group's operating income declined by 18% to R2.6 billion, from R3 billion in 2019 and its headline earnings per share decreased by 29% to 940 cents from 1 322 cents in last year. However, the company said its cash flow generation was strong and it would be declaring a final ordinary dividend of 537 cents and a special dividend of 133 cents.