AVI’s food division has helped lift first-half earnings, offsetting a weaker demand in its personal care and fashion retail businesses as consumers remained under financial strain.
The fast-moving consumer goods group on Monday said the results reflected “a sound performance in a challenging environment characterised by a stagnant economy and continued constrained consumer spending in many of our categories”.
Revenue increased 4.9% compared with the same period last year, while operating profit rose 11.6%, with the operating margin improving to 24.7%. Headline earnings per share increased 11.7% to 455.1c.
AVI increased its interim shareholder payout by 11.4% to 245c per share, in line with the growth in earnings.
The group’s food businesses were the main drivers of growth.
Snackworks, which houses brands such as Bakers and Willards, posted revenue growth of 5.9%, boosted by higher selling prices, improved biscuit sales volumes and product innovation. Demand for Bakers’ products over the festive season also helped boost sales.
Entyce Beverages, which includes Five Roses, Freshpak and Ciro coffee, reported revenue growth of 4.5%, while operating profit increased 6.4%. The business benefited from improved creamer volumes and higher selling prices in tea and coffee, while cost controls and restructuring measures supported margins, AVI said.
The group’s seafood business saw a recovery. AVI said the I&J division reported revenue growth of 9.4%, while operating profit increased to R108.4m from R36.1m in the previous year, driven by higher selling prices, better catch rates, and additional fishing capacity from the freezer vessel Umlungisi, which began operating in February 2025.
However, not all divisions performed as strongly.
AVI’s personal care business, Indigo, reported a 7.2% decline in revenue as demand fell in the core deodorant body spray category. The group said the segment faced “falling category demand in the core deodorant body spray category and the concomitant competitive disruption”.
The fashion retail division, which includes famous brands such as Spitz, Kurt Geiger and Gant, recorded revenue growth of 3.4%, driven by increased footwear sales and a better trading performance in December. Clothing sales, however, declined as consumer demand remained subdued and retailers increased discounting.
AVI said its abalone business continued trading under pressure, with the operating loss widening to R44.1m from R25m. The group attributed the decline to oversupply and weak demand in key Asian export markets, which also affected other groups such as Sea Harvest.
The group said consumer demand is expected to remain constrained and competition intense, though moderating commodity costs and a stronger rand could help ease inflation pressures in the second half of the financial year.
“Notwithstanding expectations of a difficult trading environment, we remain confident that our unique brand portfolio remains healthy and appealing to consumers. The construct of our portfolios provides defensive characteristics through periods of pressurised consumer demand and will continue to be well supported by innovation launches across our categories.”
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