Tiger is still disappointing shareholders


Tiger is still disappointing shareholders


Published Date: 2021-11-22 | Source: INCE|Community | Author: The Finance Ghost

Tiger is still disappointing shareholders

Tiger Brands is celebrating its centenary this year. Unfortunately, the results for the year ended September 2021 aren't worthy of celebration.

Revenue increased 4%, with the company noting that it would've been 5% if we exclude the product recall and civil unrest. While an argument can be made for showing a result excluding the unrest, the product recalls are part of Tiger's business risks and cannot just be excluded because it is convenient to try and do so.

Price inflation was 7%, giving a strong indication of the pressure on consumers at the moment. A 2% decrease in volume proves that consumers actively manage their food consumption in response to significant price increases.

The impact gets much bigger when you move further down the income statement. Group operating income fell 10% unless you exclude the recall and unrest, in which case it increased 20%. The impact of those two issues at operating income level was R800 million.

Headline earnings per share (HEPS) declined 6% to R11.27 per share but the total dividend increased by 23% to R8.26 per share, of which R5.06 is the final dividend that the company has declared.

In other operational news, Tiger has now launched the Black Cat brand as the third "power brand" alongside Jungle Energy and TV Bar. The company notes a rising trend in snacking.

The company also launched a venture capital fund, which has received over 500 expressions of interest from entrepreneurs. Tiger is close to making an offer for a health and nutrition business and is assessing a further nine opportunities.

Tiger's share price is down 5.8% year-to-date and has lost 47% of its value over five years.


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