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CEO Peter Matlare said yesterday at the company's half-year results to March that Tiger Brands had sold its holding in AVI at a small loss and was now seeking other viable companies to add to its basket.
However, should AVI come around again, the company would reconsider a bid as it would have added value to Tiger Brands and AVI shareholders as the offer had been priced at R24 a share.
Tiger Brands yesterday said turnover from continuing operations for the six months to March increased 24% to R11,15bn compared with the same period last year.
The turnover increase was particularly pronounced in the grains division, reflecting the substantial increases in raw material commodity costs which had been partially absorbed in the comparative period.
The total operating margin from continuing operations of 14,4%, up from 13,8% last year, reflected a recovery from the previous period in which certain raw material cost increases were partially absorbed by the group.
Overall, the group delivered growth in operating income of 29% to R1,6bn, which allows it to cover adequately the increased cost of funding the higher working capital requirements. Tiger Brands reported headline earnings per share from continuing operations of 607,1c for the half year, which is an 8% increase on that achieved in the same period last year.
Earnings per share from continuing operations increased 24% to 610,7c.
Adding back the cost of the aborted AVI bid, headline earnings per share would have been 627,9c, which would have represented a 12% increase on the previous year.
The company maintained its dividend of 245c. The dividend was kept at that level although last year's results included Adcock Ingram, which has since been unbundled.
Matlare said organic growth was the core of the company's business, but linked to this was growth through acquisitions and its international expansion plans. He said there were opportunities in the local market that it "must and will continue to pursue".
During the six months, Tiger Brands had faced volume declines in some segments as consumers traded down, as well as significant cost pressures that led to internal inflation of 24%.
"As a result of these and other factors, consumers have altered their buying patterns which have had a negative impact on volumes in many categories in which the company operates," said Matlare.
Tiger Brands was bedding down its east and central African acquisitions and was seeking further international operations to take over, particularly in Nigeria, said Matlare.
The company had also agreed to invest about R200m to expand its bakery business in KwaZulu-Natal. The bakery was expected to be in full production in the middle of next year.
The company was on track to sell its Sea Harvest holding, which should be complete by midyear.
Tiger Brands would also strengthen its empowerment credentials by selling a further 10% to empowerment groupings.
Details were expected during the financial year.
The deal had been delayed due to the AVI bid because the company needed to understand "what exactly we would be selling 10% of".
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