Snacks and drinks sate AVI during lockdown

print

Snacks and drinks sate AVI during lockdown

Published Date: 2020-06-26 | Source: Stephen Gunnion | Author: Stephen Gunnion

Snacks and drinks sate AVI during lockdown

Sales at its Entyce and Snackworks divisions helped offset the impact of Covid-19 on its footwear and fashion businesses.

After a tough first half, AVI says the second half of its financial year was materially impacted by the Covid-19 pandemic. However, it says the spread of its businesses provided a cushion.

In a trading update, the fast-moving consumer goods group said despite logistical challenges, its essential businesses had been able to keep production going and supply retailers during the lockdown. Beverages unit Entyce and snacks division Snacksworks benefited from increased demand due to a rise in consumption as South Africans stayed at home. Entyce's Ciro Beverages Solutions business lost revenue though due to the closure of restaurants and coffee shops closed. Overall improved volumes helped to absorb the additional costs the group incurred in responding to the pandemic.

Some of AVI's other businesses were harder hit. Production at seafood division I&J was disrupted by the relatively earlier build-up of Covid-19 infections in the Western Cape. Isolation and quarantine protocols kept more workers at home, resulting in reduced processing capacity. Congestion at the Cape Town pro also delayed export shipments.

The footwear and apparel businesses, which include the Spitz and Green Cross shoe chains, were heavily impacted as retail stores closed. Following their phased reopening last month, it said trading had remained subdued. Its personal care business was restricted to about 50% of normal revenue during the phase 5 lockdown and demand in certain core categories had been poor following the lifting of sales restrictions.

For the year to end-June, AVI expects to report a decline in headline earnings per share of between 7% and 12%. Earnings per share are expected to increase by between 16% and 21%, boosted by a R373 million capital gain on I&J's disposal of its interest in joint-venture operation Simplot Australia last November.

It expects to release its results on 7 September. Its shares fell 2.6% to R70 yesterday.





Similar Stories