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TIGER BRANDS LIMITED - Tiger Brands audited group results and dividend declaration for the year ended 30 September 2023

Release Date: 01/12/2023 07:30
Code(s): TBS     PDF:  
Wrap Text
Tiger Brands audited group results and dividend declaration for the year ended 30 September 2023

(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080
("Tiger Brands" or the "Company")


Tiger Brands delivers a mixed set of operational results while group earnings
benefit from higher income from associates

Salient Features
          • Revenue increased by 10% to R37.4 billion
          • Group operating income* declined by 9% to R3.1 billion
          • Income from associates increased 46% to R697 million
          • EPS declined by 2% to 1 725 cents per share
          • HEPS up 2% to 1 735 cents per share
          • Final dividend up 3% to 671 cents per share
          • Total dividend of 991 cents per share

*Before impairments, fair value losses and non-operational items


Tiger Brands' results for the 12 months ended 30 September 2023 are reflective of
the challenging trading environment marked by high food inflation, cost-conscious
consumers continuing to trade out of premium products, rand depreciation, and
unreliable electricity supply.

Despite double-digit inflation across the portfolio, the impact on group volumes was
minimal. Total revenue increased by 10% to R37.4 billion, driven by price inflation of
11%, favourable foreign exchange gains of 1% and marginal overall volume declines
of 2%. Volume growth in Exports was offset by volume declines in the Domestic
Business, primarily attributable to Milling and Baking, Groceries, and Baby as well as
the Deciduous Fruit business due to the timing of shipments. These volume declines
were partially offset by good volume growth in Rice, Beverages, Home and Personal
Care, Tiger Brands Food Service Solutions (previously Out of Home) as well as

Cost containment initiatives and supply chain efficiencies continued to make a
positive contribution to the results at R525 million; R65 million higher than the R460
million previously guided. Despite this, the ongoing challenges of fully recovering
higher input costs persisted in the second half resulting in the overall gross margin
declining to 27.7% from the 30.3% reported in the prior year. Group operating
income was impacted by non-recurring items related to insurance proceeds of R137
million (2022: R190 million) and retrenchment costs in the current year of R95 million
(2022: reversal of R8 million), resulting in a decline of 9% to R3.1 billion.

Income from associates increased by 46% to R697 million, driven by a good
underlying performance from Carozzi. Earnings from National Foods were favourably
impacted by R120 million due to a change in functional currency from Zimbabwean
Dollars (ZWD) to United States Dollars (USD) as a consequence of listing on the
Victoria Falls Stock Exchange (VFEX) in January 2022.

Net financing costs for the year amounted to R238 million compared to R75 million
last year. The increase was due to higher interest rates, the impact on opening cash
balances of the R1.5 billion share buyback, which commenced in June 2022 and
concluded in August 2022, and higher average levels of working capital investment
despite progress being made in managing these levels down in the second half of
the financial year.

The group's effective tax rate before fair value losses, non-operational items and
income from associates declined slightly to 29.0% from 29.4% last year.

EPS decreased by 2% to 1 725 cents (2022: 1 762 cents). HEPS increased
marginally by 2% to 1 735 cents (2022: 1 702 cents). The variation in EPS when
compared to HEPS is due to the non-recurrence of certain capital profit items
accounted for in EPS in FY22, which were excluded from HEPS.

Report of the independent auditors
Deloitte & Touche, Tiger Brands' independent auditors, have audited the consolidated
financial statements of Tiger Brands. The auditors expressed an unmodified opinion
on the consolidated financial statements. The consolidated audited financial
statements and auditor's report are available on the Company's
Declaration of final dividend
The Company has declared a final ordinary dividend of 671 cents per share for the
year ended 30 September2023, in line with the Company's dividend policy of 1.75x
cover based on HEPS. This, together with the interim dividend of 320 cents per
share brings the total dividend for the year to 991 cents per share.
In accordance with paragraphs 11.1 7 (a) (i) to (x) and 11.17 (c) of the JSE Listings
Requirements, the following additional information is disclosed:
   •   The ordinary dividend has been declared out of income reserves
   •   The local Dividends Tax rate is 20% (twenty percent) effective 22 February
   •   The gross final dividend amount of 671.00000 cents per ordinary share will be
       paid to shareholders who are exempt from the Dividends Tax
   •   The net final dividend amount of 536.80000 cents per ordinary share will be
       paid to shareholders who are liable for the Dividends Tax                                                                                  
   •   Tiger Brands has 180,327,980 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 ordinary
Declaration date                                   Friday, 1 December 2023
Last day to trade cum the ordinary dividend        Tuesday, 16 January 2024
Shares commence trading ex the ordinary            Wednesday, 17 January 2024
Record date to determine those shareholders        Friday, 19 January 2024
entitled to the ordinary dividend
Payment date in respect of the ordinary            Monday, 22 January 2024

Share certificates may not be dematerialised or re-materialised between
Wednesday, 17 January 2024 and Friday, 19 January 2024, both days inclusive.
The immediate market outlook remains challenging. Consumer confidence is likely to
remain under pressure given elevated interest rates and high food inflation. While
there has been a recent softening in global food prices, this has been offset in South
Africa by a weakening rand as well as loadshedding that has disrupted food production
and distribution and significantly increased costs for manufacturers and food retailers.
Although some projections suggest food inflation in the country will abate, this
assumes a further slowdown in global food inflation, an easing in electricity outages,
an improvement in our summer crop production, and a stable rand, none of which is

Given the anticipated low to no growth environment, and in response to the recent
shifts in consumer and shopper behaviour, we have prioritised the below key focus
areas aimed at regaining lost momentum and delivering a step change in trajectory.

     • Operating   model: There is opportunity for Tiger Brands to establish a cost
       structure and operating model that enables sustainable growth. To this end, the
       most appropriate organisational design will be implemented with renewed
       intensity and urgency.
     • Reshaping to a desired portfolio of the future: We are looking to deliver
       some changes to our current portfolio, by exploring identified opportunities for
       entry in adjacent categories – where we see valuable synergies, a growing
       market, and/or higher margin potential – as well as exiting certain categories
       and product ranges that are no longer deemed future-fit.                                                                              
     • Restoring  cost leadership: We will continue our rigorous approach to cost
      savings, having identified additional opportunities informed by an extensive
      external and internal benchmarking exercise, which will deliver on specific
      targets by expense type and category.
     •Rejuvenating our brands: We will be further simplifying, rationalising and
      stretching our brands with a thorough analysis of marketing investment to
      ensure that our brands talk to the relevant consumer and demand spaces, with
      progress measured both in terms of brand profitability and brand equity.
     •Turbo-charging our growth in general trade: To capture the growth
      opportunities evident in the informal sector we are expanding our presence in
      this segment of the market by implementing robust route-to-market support and
      solutions for our general trade customers.
     •Executing our identified key growth platforms in three priority areas: We
      have prioritised three growth platforms aimed at driving broader consumer and
      shopper relevance and increasing market success: driving affordability,
      democratising health and nutrition, and over-indexing on snackification.

Any forward-looking information has not been reviewed or reported on by the Group's

By order of the Board
GJ Fraser-Moleketi                                         TN Kruger
Chairman                                                   Chief Executive Officer


30 November 2023

Date of release: 1 December 2023

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 Tiger Brands
audited consolidated annual financial statements and related commentary
("Results"). The results were released on SENS on 1 December 2023 and are
available on the Company's website and via the JSE cloudlink:

Registered office: 3010 Winnie Mandela Drive, Bryanston, 2021
Independent non-executive directors: GJ Fraser-Moleketi (Chairman), MO Ajukwu,
FNJ Braeken, GA Klintworth, TE Mashilwane, M Sello, LA Swartz, OM Weber, DG
Non-executive directors: S Sithole (appointed 1 April 2023)
Executive directors: TN Kruger (Chief Executive Officer), DS Sita (Chief Financial
Company secretary: JK Monaisa

J.P. Morgan Equities South Africa Proprietary Limited


Date: 01-12-2023 07:30:00
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