Food producer Tiger Brands, whose share price rose to a seven-year high on Wednesday, plans to continue rewarding shareholders with special dividends after strong interim results, a growing cash pile, and a leadership-led turnaround that has restored investor confidence, CEO Tjaart Kruger said.
The food producer declared a special dividend of 1,216c per share alongside its interim dividend of 415c for the interim period to end-March, returning R1.8bn to shareholders. Kruger confirmed investors can expect more of the same.
“We feel that we are back on the growth path. We’re probably going to pay special dividends for a while now,” he said.
The company’s renewed capital discipline is underpinned by robust cash generation and a clear strategic direction under Kruger, whose leadership can be credited with stabilising operations and reigniting growth.
Kruger was appointed in November 2023 for a 26-month term but has since had his contract extended to end-2028. The board at the time said the decision was premised on Kruger’s progress in leading the company back to profitability.
Since his appointment, Tiger Brands has undergone a bullish turnaround, marked by a revamped route-to-market strategy. The group’s market capitalisation has surged by R56.6bn, with its share price rising nearly 60% over the past year, indicating renewed investor confidence.
Tiger Brands ended the interim period with a net cash position of R5.9bn, compared with net debt of R2.7bn a year ago. It has approved nearly R2bn in capital expenditure for internal investments but said this would not materially reduce its surplus cash.
“We obviously sit on a lot of cash. We are very cash-generative from an operating point of view, so we are not going to consume that cash in the operations. The opposite, actually, we are going to generate more,” Kruger said.
According to Kruger, the company will now prioritise internal investment, assess possible acquisitions carefully and continue to return excess capital to shareholders through dividends and possible share buybacks.
Tiger’s grains division delivered a 673% rise in operating profit to R231m, driven by real cost savings, factory consolidation and improved distribution efficiencies.
Headline earnings per share (HEPS) from continuing operations were up 34% to 1,021c, while profit rose to R2.1bn from R1.4bn a year ago.
The group said this reflected its intent to find the optimal balance between driving shareholder value and fostering sustainable growth.
Revenue increased 2% to R18.5bn, with group operating income climbing 30%.
Tiger Brands said it continued to streamline its operations during the period. It completed the sale of its Baby Wellbeing division and its stake in Chile-based Carozzi, generating a combined R4.3bn in proceeds. It also confirmed plans to sell its Langeberg & Ashton Foods business and maize milling operations.
Tiger Brands said its top priorities for the second half included completing the remaining disposals of noncore assets, maintaining operational momentum and increasing brand investment to support growth. Despite a still-pressured consumer environment, it remained confident in delivering on its full-year guidance.
After initially gaining as much as 6.3%, Tiger Brand’s share prices was up 4.69% to R337.42 at 4pm.
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