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S.Africa’s Tiger Brands eyeing deal to invest in nutrition business

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Boxes of Jungle Oats, one of the original products of Tiger brands in South Africa, appear on a shelf in the store of retailer Woolworths in Sandton, South Africa, August 28, 2019. REUTERS / Siphiwe Sibeko

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  • Earnings per share for the full year fell by 6%
  • Increased selling prices are helping to raise revenue
  • The stock was down 1.7% at 1035 GMT

Johannesburg, November 19 (Reuters) – South Africa’s major food producer Tiger Brands (TBSJ.J) is close to a deal with a business that is closely aligned with its health and nutrition strategy, it said on Friday, reporting a 6% drop in annual profits.

Tiger Brands, like many of its peers, is leveraging evolving consumer trends and blocking holes in its portfolio by diversifying into health, nutrition and plant-based meat products.

The potential investment will be made by the recently launched venture capital fund, which it says has received over 500 expressions of interest and is expected to provide inorganic growth opportunities in the medium and long term.

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It is in the final stages of bidding for the business, while nine more opportunities are being considered, delivered without giving further details.

“In terms of the investment we’re looking at right now, it’s in the food industry. It’s a product that we are not necessarily trading in right now,” CFO Dipa Sita told investors.

Tiger Brands, like their consumer product counterparts, are facing rising raw material prices like energy, grains and packaging, as well as higher transportation costs as economies recover from the epidemic.

Popular brand maker like Jungle Oats, Albany Bread and Tastic Rice said the stock’s main earnings per capita for the year ending Sept. 30 fell 6 percent to 1,127 cents from a year earlier, hurting one-time costs as a result of the return. Of canned vegetables and civil fermentation in July.

Its shares fell nearly 1.7% after the results.

Its total revenue, excluding product returns and unrest, rose 5% to 31.2 billion rand by rising selling prices. Yields have fallen due to inflation of agricultural commodities that has not been fully passed on to customers.

($ 1 = 15.6123 rand)

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Report by Nqobile Dludla; Edited by Sheilsh Kober, Promit Muharraji and Toby Chopra

Our standards: The principles of trust of Thomson Reuters.

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