AVI has raised its shareholder payout after reporting stronger earnings for the year to end-June, even as revenue growth remained muted.
On Monday, the food and fashion group declared a final dividend of 406c per share, taking the total payout for the year to 626c, up 6.1% from last year.
Headline earnings per share (HEPS) also rose 6.1% to 729.1c. However, group revenue rose only 1% to R16.02bn, but tighter cost control and improved margins helped lift operating profit by 7.8% to R3.56bn.
Cash generation remained strong, with more than R500m channelled into new projects and towards restructuring efforts, including the closure of its Green Cross retail stores, it said.
The company’s fashion division was hit by supply chain delays earlier in the year, while its I&J fishing unit benefited from better catches but faced weak abalone demand. Abalone demand has proven to be a challenge for many companies including Sea Harvest which recently flagged China’s stagnant economic recovery as a major source of the strain.
China, along with Hong Kong, are some of the biggest markets for abalone, which is regarded as a luxury item. However, economic uncertainty in the region, worsened by a slow post-Covid 19 recovery and instability in the Chinese property sector, has led to subdued consumer sentiment and lower discretionary spending.
Even so, AVI recorded a return on capital employed of 34.9%.
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