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Trading update for the four month period ended 31 January 2017
TIGER BRANDS LIMITED
“Tiger Brands” or “the Company”
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080
TRADING UPDATE FOR THE FOUR MONTH PERIOD ENDED 31 JANUARY
2017
Group turnover increased by 12% for the four month period ended 31 January
2017, compared with the corresponding period last year. Turnover in the
corresponding period excludes the contribution from TBCG (DFM), which was
disposed of with effect from 25 February 2016. The growth in turnover was
driven by a solid domestic performance while weak trading conditions on the
rest of the continent, coupled with a stronger rand, impacted Exports and
International.
The trading environment remains difficult. The focus will continue to be on
optimising margins without sacrificing market share. This will be achieved
through targeted investment in marketing and route to market activities, as well
as through ongoing cost-saving initiatives.
Good progress has been made on the fulfilment of the suspensive conditions
with regard to the disposal of Tiger Brands’ 51% shareholding in East African
Tiger Brands Industries Plc. (“EATBI”) to its existing Ethiopian partner, East
Africa Group (“EAG”).
In addition, the Board of Directors of Tiger Brands has decided to dispose of
the Company’s 51% stake in its Kenyan business, Haco Tiger Brands (E.A.)
Limited (“Haco”), to its local partner, who holds the remaining 49% of the
company (the “Transaction”).
A detailed review of the Haco business was conducted in the context of Tiger
Brands’ long term growth strategy and core competencies. In addition to
products manufactured and marketed by Haco under its own brands, the
majority of Haco’s business lies in the manufacture and distribution of products
under licence, which is not aligned with our current operating model of owning
leading FMCG brands. Taking into account these factors , it was decided that
Haco would be better positioned under local Kenyan leadership and control.
This has culminated in the local partner making an offer for Tiger Brands’ 51%
shareholding, at a price that was considered fair and reasonable.
The Transaction is subject to a number of suspensive conditions , including
receipt of the necessary regulatory approvals in Kenya.
The impact of the Transaction on Tiger Brands’ earnings, headline earnings
and net asset value per share will not be material.
We remain optimistic about the opportunities on the balance of the continent
and recognise Africa’s potential to contribute to long -term sustainable growth.
Bryanston
21 February 2017
Sponsor:
J.P. Morgan Equities South Africa Proprietary Limited
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