By Nqobile Dludla
JOHANNESBURG (Reuters) -South Africa’s Tiger Brands posted better-than-expected half-year earnings on Wednesday, declaring a special dividend and also announcing the sale of its maize milling business.
The owner of Jungle Oats and Koo baked beans said headline earnings per share from continuing operations, a key profit measure in South Africa, rose by 34% to 10.21 rand in the six months ended on March 31, from 763 cents a year ago.
SBG Securities had estimated a rise of 24%.
Tiger Brands also declared an interim dividend of 415 cents per share, up 19% and a special dividend of 12.16 rand, which will return a further 1.8 billion rand ($100 million) to shareholders, it said.
“The company has continued to significantly improve the management of working capital, which together with proceeds received from portfolio optimisation disposals has resulted in an improved net cash position,” the producer added.
Tiger said growing competition in South Africa’s maize market and the rise of regional millers meant that the maize category is no longer core to its future. As a result, the company has entered into a sale agreement with an unnamed buyer for its maize milling business, which makes Ace maize meal, along with its wheat mill.
Various options also being explored for the remaining non-core operations, which include King Foods, the chocolate business within snacks treats and beverages and the Chococam subsidiary in Cameroon, it added.
Revenue improved by 1.9% to 18.5 billion rand, primarily driven by price inflation of 2.1% and flat volume.
On a like-for-like basis, excluding the impact of discontinued divisions or products, underlying volumes grew by 2.6%.
($1 = 17.9676 rand)
(Reporting by Nqobile Dludla; Editing by Nivedita Bhattacharjee and Tom Hogue)
