Consumer goods group AVI, whose brands include Bakers biscuits and Five Roses tea, expects to report higher full-year earnings as group revenue grew 6.3% in the period.
The group said in a statement that consolidated headline earnings per share for the year ended June were expected to increase 21%-25% to 669.9c-692.0c per share, over the previous year’s 553.6c.
Consolidated earnings per share were expected to be up 20%-24%.
AVI’s results for the year reflected “a pleasing performance in a challenging environment”, the group said.
“The effective management of selling price increases, strong cost control, the benefits of investments in improving the efficiencies of our production facilities and ongoing hedging supported good operating leverage and underpinned the operating profit growth for the year,” it said.
It expected to release its annual results on September 9.
Group revenue increased 6.3% to R15.86bn underpinned by selling price increases to offset cost pressures and volume growth in the beverage categories.
Its consolidated gross profit grew ahead of revenue supported by improved gross profit margin in most categories. Selling and administrative expenses increased at rates marginally higher than CPI.
Entyce delivered strong growth supported by a combination of higher selling prices, improved sales volumes across all its categories and operational leverage. Creamer performed particularly well, gaining market share and benefiting from additional production efficiencies after a substantial investment in the facility as well as competitor supply disruptions, AVI said.
Difficult year
Snackworks growth slowed through the second half with volumes across the biscuit and snacks portfolios ending lower. Contributions from innovation launched in 2023 and during the last quarter were pleasing and continued to gain volumes. Margins were effectively managed and supported by improvements in factory efficiencies and an improved sales mix in the snack brands.
I&J had a difficult year with increased competition and reduced demand in key abalone markets constraining selling prices and volumes.
Fishing revenues improved through the second semester with better catch rates compared with the first half, benefits from a weaker rand and higher selling prices.
I&J’s operating profit margin for the year was similar to the prior year’s, benefiting from lower fuel prices, restructuring initiatives implemented in the first half and the nonrecurrence of the 2023 fire at I&J’s value-added plan. But it was partially offset by an unfavourable abalone biological asset fair value adjustment, the deleveraging effect of lower volumes, an unfavourable abalone sales mix and the noncash cost associated with the new broad-based BEE structure implemented in July 2023.
Indigo’s personal care profit declined marginally on 2023’s profit due to the cessation of the Coty distribution agreement from July 2023. Indigo’s owned brands performed soundly with improved margins supported by efficiencies from range rationalisation initiatives and the loss of the lower margin Coty business.
The footwear and apparel brands had a challenging second semester with constrained demand worsened by increased discounting in the sector, particularly in apparel. Core footwear brands performed well, AVI said.
The company’s share price closed up 1.45% at R97.34 on the JSE on Friday.
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