Tiger Brands (TBS) is a massive, diversified food producer and marketer in South Africa. It produces and sells well-known brands such as Jungle Oats, Tastic Rice, Koo, All Gold, Albany bread, Purity, Renown, Oros, Five Roses, Black Cat, and Fizzer. The company went through extreme difficulties over the listeriosis outbreak, which was linked to two of its factories and an abattoir. The outbreak resulted in the death of over 200 people. The company has insurance that covers any potential losses as a result of the listeriosis problem but does not cover exemplary, punitive, or constitutional damages.
On 17th August 2020, the company announced that it had sold its meat processing businesses for R311m, which is considered a very low price. The company is vulnerable to lower consumer spending and rising input prices, especially maize. The Ukraine crisis may push food inputs up by as much as 20%, causing knock-on food inflation. The company is now planning for stage 8 load-shedding.
In its results for the six months to 31st March 2024, the company reported revenue down 1% and headline earnings per share (HEPS) up 11%. Price inflation was 8%, and volumes fell 9%. The company said, "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 realizations. Volume growth in Exports was offset by declines in the Domestic Business."
Technically, the share was moving sideways and showing volatility since the COVID-19 low of March 2020. It broke above its long-term downward trendline on 18th July 2022 at 15689c and then rose to 21796c. However, in March 2023, the impact of load-shedding, higher raw materials costs, and constrained consumer spending caused the share price to drop sharply. For the last seven months, the share has been rising, but it remains risky due to its exposure to food prices and consumer spending.
On 20th October 2023, the company announced that Tjaart Kruger would take over from Noel Doyle as CEO from 1st November 2023.
On 17th August 2020, the company announced that it had sold its meat processing businesses for R311m, which is considered a very low price. The company is vulnerable to lower consumer spending and rising input prices, especially maize. The Ukraine crisis may push food inputs up by as much as 20%, causing knock-on food inflation. The company is now planning for stage 8 load-shedding.
In its results for the six months to 31st March 2024, the company reported revenue down 1% and headline earnings per share (HEPS) up 11%. Price inflation was 8%, and volumes fell 9%. The company said, "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 realizations. Volume growth in Exports was offset by declines in the Domestic Business."
Technically, the share was moving sideways and showing volatility since the COVID-19 low of March 2020. It broke above its long-term downward trendline on 18th July 2022 at 15689c and then rose to 21796c. However, in March 2023, the impact of load-shedding, higher raw materials costs, and constrained consumer spending caused the share price to drop sharply. For the last seven months, the share has been rising, but it remains risky due to its exposure to food prices and consumer spending.
On 20th October 2023, the company announced that Tjaart Kruger would take over from Noel Doyle as CEO from 1st November 2023.
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