Cape Town - Shares in Pioneer Foods [JSE:PFG] dropped sharply on Thursday after the food manufacturer advised that full-year earnings are expected to increase by more than 20% compared with last year.
The group warned that while the period under review signalled a lowering of soft commodity prices, this has not yet given rise to increased demand and volume growth.
"The trading environment continues to be reflective of the pedestrian food and beverage category growth rates currently experienced, indicative of significant pressure on the SA consumer," Pioneer said in a SENS announcement.
Pioneer shares were down 5.84% at R120.59 at 10:42, compared with a 0.04% rise in the JSE All-share index.
Among the Pioneer brands are Sasko, Redro, Weetbix, Imbo, Crossbow, Moir's and Heinz.
In terms of JSE listing requirements, a company is required to report to shareholders when a reasonable degree of certainty exists that the earnings for the current reporting period are expected to differ by at least 20% against the previous comparable period.
"In terms of this requirement, Pioneer Foods hereby advises shareholders that EPS (earnings per share), HEPS (headline earnings per share) and adjusted HEPS (pre the mark to market impact of the Phase 1 BEE deal), for the year ending 30 September 2014, are expected to increase by more than 20%, when compared to those for the financial year ended 30 September 2013."
Pioneer also said revenue growth has been sustained at similar levels to the interim results for the six months to end-March 2014, notwithstanding deflation in select categories.