Tiger Brands H1 HEPS up 11%

Tiger Brands, the manufacturer of popular products like Albany Bread, Tastic Rice, and Doom insect detergent, has recently unveiled its first half results under the leadership of CEO Tjaart Kruger, who took on the role in November last year. The company's headline earnings per share from continuing operations saw a marginal increase to 743 cents, even as revenue slightly declined due to lower volumes. The results showcased a mixed performance across the various business segments, with some sectors thriving while others faced challenges. Kruger highlighted the struggles in the bakery and grains businesses, citing issues like poor service levels, breakdowns, and high costs. However, he expressed optimism about the progress made in addressing these challenges and the potential for improvement in the second half of the year. Notably, Tiger Brands has implemented a new operating model with six managing directors leading different divisions, focusing on efficiency and cost reduction. The company is also working on making its products more affordable for consumers amidst economic challenges such as high interest rates and cash constraints. Kruger emphasized the importance of aligning price points with consumer affordability in a bid to enhance competitiveness and drive sales. In response to pricing trends and inflationary pressures, Tiger Brands aims to improve margins and efficiencies while managing costs to stay competitive. The company is also exploring product innovation and format changes to cater to changing consumer preferences and affordability. One example is the transition from glass to PET packaging in the peanut butter business to offer more affordable variants. Additionally, strict quality control measures are in place to ensure product safety, such as testing for aflatoxins in peanuts. Kruger also discussed the timeline for the expected results from the recent management restructuring and business initiatives, noting that some improvements will be visible in the second half of the year, while the long-term journey towards performance enhancement may span over two to three years. Overall, Tiger Brands remains focused on driving operational efficiencies, enhancing consumer affordability, and navigating market challenges to deliver sustainable growth and profitability.