AVI final results June 2018
AVI has maintained a normal dividend payout ratio of 80% of diluted headline earnings. In line with this a final dividend of 260 cents per share has been declared, bringing the total normal dividend for the year to 435 cents, an increase of 7.4% on last year.
In addition, in line with AVI's ongoing commitment to return excess cash to shareholders, the Board has approved a special dividend of 250 cents per share.
The annual report for the year ended 30 June 2018 will be posted to shareholders on or about Tuesday, 2 October 2018. The financial statements will include the notice of the annual general meeting of shareholders to be convened on Thursday, 1 November 2018.
The trading environment is expected to remain difficult in the next financial year, with the current pressures on consumer spending likely to be compounded by the cumulative impact of ongoing job losses in both the private and public sectors. Our expectation is that many of our categories are likely to have low, or even negative, growth rates until there is a meaningful improvement in the economy. If recent Rand weakness persists, we will see import cost increases in the second semester that will be difficult to recover in a constrained environment, resulting in pressure on profit margins. Notwithstanding this, our brands remain healthy and appealing to many consumers and a good portion of the new financial year's import requirements have been covered at rates that support good levels of profitability. We will continue to react quickly to market changes as we pursue the most appropriate balance of price, sales volumes and profit margins for each of our brands.
We will sustain investment that underpins our manufacturing capacity, product quality and service levels. In addition to the savings being realised from restructuring completed in the prior and current financial years, we will continue to review organisational structures and fixed overhead costs to improve operational effectiveness and reduce our cost base. AVI International, supported by our South African manufacturing capabilities, remains focused on steadily building our brands' shares in export markets while sustaining strong profit margins.
I&J's prospects remain materially dependent on fishing performance and exchange rates. Excluding the impact of weather conditions, catch rates on the freezer vessels have improved in the last few months and, if sustained, should result in good sales volumes to well-priced export markets. Export exchange rates secured for the year are at levels that support sound profitability and the more recent Rand weakness provides upside potential. The hake long-term rights application process, to allocate rights from 2021, should commence formally during the next year, but is not expected to impact on operations in this financial year.
The Board is confident that AVI remains well positioned to compete effectively; prudently manage fixed and variable costs; and, recognising the challenging environment, be alert for appropriate acquisition opportunities both domestically and regionally.