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Audited Group Results and dividend declaration for the year ended 30 September 2019
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
TIGER BRANDS AUDITED GROUP RESULTS AND DIVIDEND DECLARATION
FOR THE YEAR ENDED 30 SEPTEMBER 2019
Tiger Brands' full year results impacted by the unbundling of the Company's interest in Oceana, the
challenging operating environment and a slower than anticipated recovery in the Value Added Meat Products (VAMP)
business.
Salient Features*
- Revenue increased by 3% to R29.2 billion (Excluding VAMP+, revenue increased by 5% to R28.6 billion)
- Group operating income** declined by 20% to R2.6 billion (Excluding VAMP+, Group operating income**
declined by 11% to R3.2 billion)
- Group operating margin** down 260 bps to 9.0%
- HEPS down 17% to 1 349 cents per share
- EPS up 55% to 2 364 cents per share
- Total Dividend*** declared of 1 061 cents per share
- Unbundling of investment in Oceana concluded
- Deli Foods discontinued
* From continuing operations
** Before impairments and abnormal items
*** Includes special dividend of 306 cents per share declared on 22 May 2019
+ Refer to pro forma detail in the full results announcement
Overview
Tiger Brands' results for the year ended 30 September 2019 reflect the difficult trading conditions,
characterised by an increasingly challenging consumer environment and input costs rising ahead of price inflation.
The overall result was significantly impacted by ongoing margin compression across the Grains portfolio, tough
trading conditions in the Group's primary export markets and the slower than anticipated recovery of the VAMP
business. The unbundling of the Company's investment in Oceana also had a significant impact on year-on-year
comparisons.
Despite the challenging backdrop, total revenue from continuing operations increased by 3%, driven by price
inflation of 5% and partially offset by an overall volume decline of 2%. Lower volumes, coupled with the
inability to fully recover input costs, placed gross margins under pressure, resulting in Group operating
income (before impairments and abnormal items) declining by 20% to R2.6 billion (2018: R3.3 billion).
Headline earnings per share (HEPS) from continuing operations declined by 17% to 1 349 cents (2018: 1 633 cents).
Earnings per share (EPS) from continuing operations, on the other hand, increased by 55% to 2 364 cents
(2018: 1 530 cents) principally due to a capital surplus amounting to R2 billion, arising from capital profits
realised and a fair value gain relating to the unbundling of the Company's interest in Oceana. This capital
surplus had no impact on headline earnings per share as it is excluded for headline earnings purposes.
HEPS from total operations decreased by 17% to 1 322 cents (2018: 1 589 cents), whilst EPS from total
operations increased by 60% to 2 333 cents (2018: 1 458 cents).
Portfolio Optimisation
Significant progress has been made in terms of optimising the portfolio, with firm decisions having been
made in respect of VAMP and Deli Foods. With respect to the potential disposal of VAMP, the formal due
diligence process is under way and further updates will be given as key milestones are reached.
Similarly, after a thorough review of the future prospects of Deli Foods in Nigeria, which had been in a
loss making position for a prolonged period of time, and following an assessment of the various alternatives
available, the Board approved the closure of the business. The process is expected to be concluded in the
next few months.
Final dividend
A gross final cash dividend of 434 cents per share has been declared for the year ended 30 September 2019.
This, together with the interim ordinary dividend of 321 cents per share, brings the total ordinary dividend
for the year to 755 cents, in line with Tiger Brands' dividend policy of 1.75x cover based on headline
earnings per share. In addition, a special dividend of 306 cents per share was declared for the six months
to 31 March 2019, as a result of the once-off proceeds received from the disposal of Oceana shares to Brimstone
prior to the unbundling.
The special dividend, together with the total ordinary dividend for the year, brings the total distribution
for the year to 1 061 cents per share (2018: 1 080 cents).
Outlook
The ongoing review of Tiger Brands' portfolio will ensure that the Group is appropriately positioned for
growth.
It is expected that the significant macro-economic challenges facing the country are likely to persist for
the foreseeable future. In the context of structural unemployment, ongoing challenges relating to state-owned
enterprises, and increased competitive pressure, the operating environment is likely to remain subdued.
To this end, we will prioritise investment in the Group's key brands whilst delivering product
innovations to meet changing consumer needs. In addition, Tiger Brands will leverage the strength of its
brands by evaluating opportunities to stretch its brands within and across existing and new product categories.
In terms of Tiger Brands' Africa growth strategy, the Company is looking to deliver organic growth by
driving category growth through targeted brand investments, developing superior routes to market and investing
in enabling capabilities.
To protect margins in a constrained consumer environment, the Company has placed heightened focus on driving
productivity and securing cost efficiencies across the value chain.
Declaration of final dividend
The Board has approved and declared a final gross cash dividend of 434 cents per ordinary share in respect
of the year ended 30 September 2019.
The dividend will be subject to the Dividends Tax introduced with effect from 1 April 2012.
In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings
Requirements the following additional information is disclosed:
- The dividend has been declared out of income reserves
- The local Dividends Tax rate is 20% (twenty percent) effective 22 February 2017
- The net local dividend amount is 434 cents per ordinary share for shareholders exempt from the
dividends tax
- The net local dividend amount is 347,2 cents per ordinary share for shareholders liable to pay the
dividends tax
- Tiger Brands has 189 818 926 ordinary shares in issue (which includes 10 326 758 treasury shares)
- Tiger Brands Limited's income tax reference number is 9325/110/71/7.
Shareholders are advised of the following dates in respect of the final dividend:
Declaration date Friday, 22 November 2019
Last day to trade cum the final dividend Tuesday, 7 January 2020
Shares commence trading ex the final dividend Wednesday, 8 January 2020
Record date to determine those shareholders entitled to the final dividend Friday, 10 January 2020
Payment date in respect of the final dividend Monday, 13 January 2020
Share certificates may not be dematerialised or re-materialised between Wednesday, 8 January 2020 and
Friday, 10 January 2020, both days inclusive.
By order of the Board
KDK Mokhele LC Mac Dougall
Chairman Chief Executive Officer
Bryanston
21 November 2019
Date of release: 22 November 2019
This short-form announcement is the responsibility of the directors of the Company and has not been
reviewed or audited by the Group's auditors. The information disclosed is only a summary of the
full announcement and does not contain full or complete details.
Any investment decisions should be based on the consideration of the full audited results announcement
("results"). Tiger Brands' results were released on SENS on 22 November 2019 and are available on
the Company's website http://www.tigerbrands-online.co.za/results/annuals-2019/index.php and
https://senspdf.jse.co.za/documents/2019/jse/isse/tiih/TigerFY19.pdf.
Copies of the results announcement are available for inspection at the Company's registered office,
the offices of our sponsor or may be requested from the Company's investor relations department during
normal business hours and are available at no charge.
Registered office: 3010 William Nicol Drive, Bryanston, 2021
Independent non-executive directors: KDK Mokhele (Chairman). MO Ajukwu, MJ Bowman,
MP Fandeso (appointed July 2019), CH Fernandez (appointed March 2019), GA Klintworth, M Makanjee,
TE Mashilwane, MP Nyama, M Sello (appointed October 2019), DG Wilson (appointed June 2019)
Executive directors: LC Mac Dougall (Chief Executive Officer), NP Doyle (Chief Financial Officer)
Company secretary: JK Monaisa
Date: 22/11/2019 07:30:00
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