TIGER BRANDS LIMITED - Tiger Brands unaudited group results and dividend declaration for the six months ended 31 March 2024

Tiger Brands unaudited group results and dividend declaration for the six months ended 31 March 2024

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


TIGER BRANDS UNAUDITED GROUP RESULTS AND DIVIDEND
DECLARATION FOR THE SIX MONTHS ENDED 31 MARCH 2024

Tiger Brands delivers a muted first half performance amid a leadership
transition and the initiation of turnaround efforts in difficult trading conditions

Salient Features
   - Revenue decreased by 1% to R19.2 billion
   - Group operating income** decreased by 3% to R1.3 billion
   - Income from associates increased 44% to R396 million
   - Profit on sale of non-core brand amounts to R128 million
   - EPS from total operations increased by 19% to 892 cents per share
   - HEPS from total operations increased by 11% to 808 cents per share
   - Interim dividend up 9% to 350 cents per share

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

Strategic update
Since Tjaart Kruger's appointment as CEO on 1 November 2023, the group has now
finalised the appointment of the new leadership team. Thushen Govender assumed
the role of CFO on 1 January 2024 followed by the appointment of Managing Directors
from within the organisation for each of the six business units on 1 February 2024. The
new leadership team has hit the ground running, driving forward key strategic priorities
aimed at revitalising the group, stimulating growth and, enhancing profitability
sustainably. It is anticipated that the effect of key initiatives will start to reflect in the
short term.

Operating performance

Overview
Tiger Brands' results for the 6 months ended 31 March 2024 reflect the tough trading
environment with negative volume growth across retail and wholesale channels while,
trading ahead of the Easter period was generally slower than expected, particularly in
the wholesale channel. Consumers remain constrained and continue to rationalise
spend, prioritising value offerings and staple categories, which adversely impacts
absolute volumes and basket mix.

Furthermore, the performance during the first half was impacted by our focus shifting
towards restructuring and implementing the new operating model. This transition was
effectively executed, with the new management teams now fully operational.

                                                                                          
Total revenue from continuing operations regressed by 1% to R19.2 billion relative to
the same period last year, driven by price inflation of 8%, offset by a reduction in
volumes of 9%. In divisions such as Bakeries, the loss in volume was a deliberate
strategy to reduce the reliance on sub-optimal promotional activity and improve price
realisations. Volume growth in Exports was offset by declines in the Domestic
Business.

Conversion-cost efficiencies as well as reduced loadshedding helped mitigate gross
margin compression. Group operating income decreased 3% to R1.3 billion while
operating margin was relatively flat at 6.9%. The profit on sale of a non-core brand
within Personal Care (Status trademark) of R128 million increased profit, including
non-operational items, by 4% to R1.5 billion.

Income from associates increased by 44% to R396 million, driven largely by strong
operational performances from Carozzi as well as National Foods.

Net financing costs for the period amounted to R163 million compared to R94 million
in the same period last year. The increase is in line with higher average debt levels as
well as higher interest rates. Plans are in place to optimise working capital and thereby
minimise operating cash requirements.

The group's effective tax rate, prior to fair value losses, non-operational items, and
income from associates, improved from 29.7% to 29% compared to the previous year.
This is largely due to investment allowances received on qualifying major capital
projects.

EPS from continuing operations increased by 10% to 827 cents (2023: 749 cents).
HEPS from continuing operations was marginally up at 743 cents (2023: 731 cents).
The variation in EPS when compared to HEPS is due to the inclusion of the profit on
sale of the Status trademark in EPS, which is excluded from HEPS.

EPS from total operations increased by 19% to 892 cents (2023: 749 cents) due to the
accounting of insurance proceeds related to previously written-off and obsolete stock
within the Value-Added Meats business. This business has been disposed of and
disclosed as a discontinued operation. HEPS from total operations increased by 11%
to 808 cents (2023: 731 cents).

Declaration of interim dividend
The Company declared an interim ordinary dividend of 350 cents per share for the six
months ended 31 March 2024, in line with the Company's dividend policy of 1.75x
cover based on HEPS and in line with the higher headline earnings per share. This
resulted in a 9% increase relative to the prior year interim dividend.

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 ordinary dividend has been declared out of income reserves
    • The local dividends tax rate is 20% (twenty percent) effective 22 February 2017
    • The gross final dividend amount of 350.00000 cents per ordinary share will be
      paid to shareholders who are exempt from the dividends tax                                                                     
    • The net final dividend amount of 280.0000 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 10 899
      112 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
dividend:

 Declaration date                                      Monday, 27 May 2024

 Last day to trade cum the ordinary dividend           Tuesday, 2 July 2024
 Shares commence trading ex the ordinary               Wednesday, 3 July 2024
 dividend
 Record date to determine those shareholders           Friday, 5 July 2024
 entitled to the ordinary dividend
 Payment date in respect of the ordinary               Monday, 8 July 2024
 dividend


Share certificates may not be dematerialised or re-materialised between Wednesday,
3 July 2024 and Friday, 5 July 2024, both days inclusive.
Outlook
The operating landscape is likely to remain challenging. Preliminary macroeconomic
indicators suggest heightened strain among South African consumers. While there
has been a nominal uptick in employment, wage growth has notably decelerated,
particularly amid a surge in inflation, disproportionately impacting low-income
consumers. Forecasts indicate restrained wage growth, with any potential relief from
interest rate adjustments to be marginal and gradual. Given the high levels of
consumer indebtedness and limited prospects for substantial labour market
improvements within a subdued economic backdrop, it is anticipated consumers will
continue to face significant hurdles.

The next reporting cycle will mark the first 6-month period under new leadership with
the first green shoots of our turnaround efforts expected to emerge. We are confident
in the immediate measures taken to streamline our operating model, coupled with
clear targets for further simplification and enhancement. Moreover, our robust portfolio
of market-leading brands positions the group for improved performance in the short-
term.

Looking ahead, our focused strategy will enable strategic investments in brands,
activities and segments poised to deliver superior and sustainable long-term returns.

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

                                                                                      
By order of the Board
GJ Fraser-Moleketi                                         TN Kruger
Chairman                                                   Chief Executive Officer
Bryanston
24 May 2024
Date of release: 27 May 2024


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 Tiger Brands
2024 interim results announcement ("Results"). The Results were released on SENS
on 27 May 2024 and are available on the Company's website www.tigerbrands.com
and via the JSE cloudlink:
https://senspdf.jse.co.za/documents/2024/jse/isse/tiih/TigerHY24.pdf.
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
Wilson
Non-executive directors: S Sithole
Executive directors: TN Kruger (Chief Executive Officer), TA Govender (Chief
Financial Officer)
Company secretary: JK Monaisa

Sponsor
J.P. Morgan Equities South Africa Proprietary Limited




                                                                              

Date: 27-05-2024 07:05:00
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