Tiger Brands reports 78% earnings jump while addressing listeriosis claims
JSE-listed Tiger Brands, which recorded a 78% jump in earnings per share in its first half to the end of March on the back of sales of non-core units, reiterated its resolve to settle claims relating to 2017 massive listeriosis outbreak 'as soon as possible'.
Tiger Brands has not disclosed the full value of the settlement, which it said it had presented as a total amount at the end of April, although it has stated it has enough insurance to cover the claims. In a recent statement, it also refused to accept liability.
'The offer is subject to certain conditions and has been made without admission of liability and in full and final settlement of the claims of the claimants,' it said.
What has been called the largest listeria outbreak in South Africa's history happened in 2017. It was traced to Tiger Brands' Enterprise Foods facility in Polokwane and resulted in 218 deaths and close on 1,000 infections.
The settlement process now moves quantifying individual damages for eligible claimants as well as attorneys taking those offers to the plaintiffs.
'Tiger Brands and its insurers remain committed to achieving a just resolution of the listeriosis class action as soon as possible,' it said.
Africa's largest food producer posted a 17.6% jump in headline earnings per share, a figure that strips out profit from sales of units, to 951c for the interim period, despite ongoing inflationary pressure and a consumer base still watching every rand.
Tiger Brands' price inflation of 2.1% helped offset the flat volumes, leading to revenue improving 1.9% to R18.5 billion.
'Despite early signs of economic recovery offering some much-needed relief, consumers remain under pressure and continue to seek value in their food basket,' said CEO Tjaart Kruger.
The company is sticking to its cost-cutting plans, optimising logistics, engineering value into recipes and packaging, and squeezing more efficiency out of its factories, to protect margins and keep products affordable.
Tiger Brands continues to focus on trimming non-core assets, with the sale of the Baby Wellbeing division and a 24.4% stake in Chile-based company, Empresas Carozzi bringing in R4.4bn during the period and another R600 million received in April.
Having sold those entities, as well as its Langeberg & Ashton Foods business, it said it has entered into a deal to sell its Wheat Mill and Maize unit in Randfontein. Tiger Brands did not provide more details, although it noted that selling non-core entities to ensure it has a 'competitive edge' and can win market share.
Shareholders are set to benefit from a special dividend of 1 216 cents per share, returning R1.8bn to investors, pending approval from, the South African Reserve Bank. Management says this strikes a balance between rewarding investors and maintaining the flexibility needed for sustainable growth.
'Tiger Brands has achieved growth in line with guidance, underpinned by a continued focus on driving value for consumers, execution of key strategic priorities, and implementing continuous improvement initiatives of logistics optimisation, value engineering and factory efficiencies,' it said.
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