South African food giant gives shareholders a special R1.8 billion payout

29 May, 2025 9 minutes de lecture 36 vues

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South African food giant gives shareholders a special R1.8 billion payout

Tiger Brands, whose brands include Koo, Energade, Jungle Oats, Ace, and many more, has given shareholders an extra R1.8 billion via a special dividend due to a significant increase in earnings.

In its interim results for the six months ending 31 March 2025, the group said its strong results reflected management’s ability to drive growth in a challenging consumer environment.

Although early signs of economic recovery provided some relief, consumers remain under pressure and seek value.

The group said that the growth was underpinned by a continued focus on driving value, executing key strategies, and implementing several improvement initiatives, such as logistics optimisation.

The group’s overall revenue improved by 1.9% to R18.5 billion, primarily driven by price inflation of 2.1% and flat volume.

Despite the slight increase in revenue, the group’s gross margin increased from 28.5% to 29.6%, driven by naked margin expansion due to price deflation in key commodity categories and greater efficiencies.

The group’s operating income also increased by 29.9% to R1.8 billion, driven by topline growth, logistics optimisation savings and other continuous improvement initiatives such as value engineering.

The disposal of Baby Wellbeing also generated R455 million in non-operational profit after tax for the group. In contrast, after-tax profit from the disposal of a 24.4% stake in Carozzi amounted to R304 million.

As of 31 March 2025, the total proceeds from these transactions were R4.4 billion, with the remaining R0.6 billion received in April 2025.

Due to increased cash reserves, the group’s financing costs also dropped heavily, from R160.7 million in the prior year to R21.5 million in H1 25.

The group’s earnings per share thus increased by 50.9% to 1,347 cents (2024: 892 cents), while headline earnings per share jumped by 17.6% to 951 cents per share (2024: 808 cents).

The variation between the earnings figures primarily relates to profit on the disposal of the non-core Baby Wellbeing division and associate Carozzi.

The group said that its strong quality of earnings reflected improved cash generation. Improved working capital management led to an inflow of R1.0 billion compared to an outflow of R1.4 billion a year earlier.

This resulted in cash generated from operations increasing by R2.6 billion to R3.4 billion.

The increased cash generated from operations nd the disposal of non-core operations resulted in the group’s net cash position increasing by R8.6 billion to R5.9 billion.

With the group’s earnings increasing so heavily, it upped its interim dividend by 19% to 415 cents per share.

The group also declared a special dividend of 1,216 cents per share, totalling R1.8 billion. This is subject to the Reserve Bank’s approval.