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Trading Update
Pioneer Food Group Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1996/017676/06)
(Share code: PFG)
(ISIN code: ZAE000118279)
(“Pioneer Foods” or “the Company”)
TRADING UPDATE
Pioneer Foods group turnover decreased by 4% for the ten months ended 31 July 2017, compared to
a 2% increase reported for the six months ended 31 March 2017. This can mainly be attributed to price
deflation in maize resulting in Essential Foods’ revenue declining in the second six months of the
financial year.
At the half year, the company indicated that it anticipated an improved performance in the 2nd half.
This has, however, materialised at a slower rate than anticipated due to a significant slowdown in the
local economy, aggressive price based competition and the lowest international prices recorded on
raisins in 7 years. African export markets have also shown no sign of recovery.
Volume contraction in most categories remains overwhelmingly the single biggest performance
inhibitor with a concomitant compression in margins.
Importantly, the Essential Foods Division has exited the expensive maize position and commenced
trading at more normalised margins from July. The Aeroton bakery has also been successfully
commissioned and is delivering positive results. Sustained cost and efficiency disciplines continue to
be exercised.
Whilst the medium term growth outlook for South Africa remains constrained, the Company will be
judged on its ability to increase market share in a contracting environment, a restoration of margins
and overall financial performance in relative terms. Management is positive that 2018 will portend
greater upside and a recovery opportunity for the Company at large. Brand strategies are robust,
investment in growth assets are opportune, and a recurrence of the 2017 anomalies is unlikely for the
2018 fiscal.
The financial information on which this trading statement is based has not been reviewed or reported
on by the Company´s auditors.
Tyger Valley
8 August 2017
Sponsor
PSG Capital (Pty) Ltd
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