Tiger Brands Share Price Pushes To Record Levels Despite SA Household Strain
Tiger Brands posted a sharp rise in annual profits, showing resilience even as South African consumers remain under pressure.
Quick overview
- Tiger Brands reported a 31% increase in full-year earnings, driven by stronger sales volumes and improved operating efficiency.
- Headline earnings per share rose to 21.41 rand, reflecting effective cost controls and disciplined pricing strategies.
- Despite ongoing consumer pressure, the company's share price reached a new high, indicating strong market support.
- Tiger Brands declared a special final dividend of 27.10 rand per share, significantly higher than the previous year's dividend.
Tiger Brands posted a sharp rise in annual profits, showing resilience even as South African consumers remain under pressure.
Resilient Performance In A Tough Consumer Market
South Africa’s largest food producer, Tiger Brands, delivered a notable 31% increase in full-year earnings, driven by stronger sales volumes and improved operating efficiency. This performance came despite persistent pressure on household budgets, as consumers continue to navigate high living costs and subdued spending power.
The company, best known for household brands such as Jungle Oats and Koo baked beans, reported headline earnings per share from continuing operations of 21.41 rand for the year ended 30 September. This marked a significant improvement on the restated 16.31 rand recorded a year earlier, highlighting the benefits of tighter cost controls and more disciplined pricing strategies.
Share Price Reaction And Market Support
Following the earnings release, Tiger Brands’ share price climbed to a new high of R36.8 before pulling back slightly. Despite the small retreat, the stock remains technically well supported, with key moving averages on the weekly chart continuing to attract buying interest during pullbacks.
TBS Chart Weekly – Buyers Remain Totally in Control
This strength comes against a backdrop of sharply rising prices over the past few years, which has weighed on consumption patterns and forced many households to reduce spending. Even so, Tiger Brands’ latest performance shows that its core portfolio and pricing discipline are helping it maintain momentum in an otherwise strained consumer landscape.
Tiger Brands Posts Strong Earnings Growth
- Tiger Brands, South Africa’s leading food group, reported a 31% jump in full-year earnings, supported by higher volumes and stronger operating margins despite weak consumer demand.
Revenue And Volume Trends
- Headline earnings per share from continuing operations rose to 21.41 rand from 16.31 rand in the prior year.
- Group revenue increased 2.7% to 34.4 billion rand, driven by 3.5% volume growth and more restrained pricing.
Consumer And Cost Pressures
- Food and non-alcoholic beverage inflation eased to 4.5% in September, but rising costs of other essentials continued to squeeze consumer spending power.
Segment Performance
- Second-half volumes expanded 5.7%.
- Milling and Baking revenue rose 5.3%, supported by a 7.9% volume increase and lower wheat prices.
Profitability Improves
- Operating income climbed 35% to 3.8 billion rand, aided by efficiency measures and value engineering.
- Operating margin reached 11.1%, up 2.6 percentage points and above guidance.
Dividend Boost
- A special final dividend of 27.10 rand per share was declared, sharply higher than the 6.84 rand paid last year, reflecting stronger cash generation.
Exit From Cameroon
- Tiger Brands agreed to sell its 74.69% stake in Chocolaterie Confiserie Camerounaise to Minkama Capital for about US$76 million, subject to regulatory approval.
Group revenue edged higher as volumes rebounded, supported by operational improvements across key divisions. Management’s focus on streamlining processes and stabilising input costs helped lift margins, even as overall demand remained constrained. The results suggest Tiger Brands is adapting effectively to a challenging retail environment where consumers are prioritising essential purchases over discretionary items.
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