Listeriosis-hit Tiger Brands reports fall in revenue
JSE-listed Tiger Brands recorded a 4 percent decline in revenue to R15,7 billion, for the six months ended March 2018.
JSE-listed Tiger Brands, one of the largest manufacturers and marketers of FMCG products in Southern Africa, recorded a 4 percent decline in revenue to R15,7 billion in its interim financial results for the six months ended March 2018, as the devastating listeriosis outbreak took its toll on the company.
Operating income (before impairments and “abnormal items”) declined 8 percent to R2 billion, while headline earnings per share was down 16 percent to 868 cents. An interim dividend was declared at 378 cents.
In March, the group suspended operations at its factories in Polokwane, Germiston and Pretoria, which the department of health linked to the listeriosis outbreak that has claimed over 200 lives in South Africa so far, and infected over 1,000 others. It also recalled all Enterprise products across the country.
The recall associated with its value-added meat processing amounted to R415 million, but balanced at R363 million, net of the R50 million insurance claim, and R2 million in profit from the disposal of related property. Tiger Brands also faces class-action lawsuits from dependents of those who died from contracting listeriosis and those who fell ill from it, collectively amounting to R418 million.
Tiger Brands said it is “carefully considering the best approach to ensure that the recently launched class actions are handled sensitively and responsibly having regard to all the facts”.
“The application for certification of the classes is in progress, while our legal representatives are in discussion to explore further collaboration,” it said. “Given that these discussions are in progress, we will communicate our approach as soon as a decision has been reached.”
The group said that it was engaging openly and transparently with relevant stakeholders, including government, and was focused on rebuilding trust with consumers in the country.
Tiger Brands is expecting stiff competition in the local market for the rest of the financial year, and no meaningful recovery in its international markets.
Its processed meat facilities would remain shut for most of the second half, it said, while it completed remedial work and awaited guidance from the Department of Health.
Since July 2015, Tiger Brands' finances have been overseen by CFO Noel Doyle (pictured), who boasts a wealth of experience in the FMCG sector.