Food producer Tiger Brands reported a marginal rise in half-yearly earnings on Monday and warned of targeted price hikes to mitigate the impact of supply-chain risks from geopolitical uncertainty, including the Iran war.
The maker of All Gold ketchup and Jungle Oats said the consumer environment remained highly competitive in the first half of the year, with shoppers prioritising affordability.
Its headline earnings per share from continuing operations, a key profit measure in South Africa, rose by 0.6% to R9.80 in the six months ended March 31, up from a restated R9.74 a year earlier.
Revenue increased 1.3% to R17.9-billion primarily driven by volume growth of 2.6% and price decrease of 1.3%.
On a like-for-like basis, excluding the impact of discontinued products and disposed businesses, normalised volume growth was 4.5%.
Gross margin increase
Tiger Brands said its gross margin increased to 32.1%, up from 29.8%, driven by favourable raw material costs in key categories, as well as improvement initiatives, including “factory efficiencies” and price savings on recipes and packaging.
Group operating income rose 26.1% to R2.1-billion, supported by gross margin gains and additional savings on logistics, which the company said were ahead of expectations.
Looking ahead, Tiger Brands warned that the ripple effects of geopolitical uncertainty, including the Iran war, are likely to be felt more in the second half of the 2026 financial year, affecting both supply chains and consumer disposable income.
However, the company said it is confident that it can mitigate potential supply risks by addressing the resultant inflationary pressure through additional improvement initiatives and targeted price increases aimed at limiting the impact on profitability.
The manufacturer declared an interim dividend of R4.30 per share, up 3.6%.
- Tiger Brands reported a slight 0.6% rise in half-year earnings per share to R9.80 for the six months ending March 31, with revenue up 1.3% to R17.9 billion.
- Volume growth was 2.6%, with normalized volume growth at 4.5% when excluding discontinued products and businesses.
- Gross margin improved from 29.8% to 32.1%, driven by lower raw material costs, factory efficiencies, and savings on recipes and packaging.
- Operating income increased 26.1% to R2.1 billion, supported by logistics savings exceeding expectations.
- Tiger Brands warned of supply-chain and inflation risks from geopolitical tensions, including the Iran war, but plans targeted price hikes and improvement initiatives to protect profitability; declared a 3.6% higher interim dividend of R4.30 per share.
