Pioneer posts sharp profit hike

Johannesburg - Pioneer Food Group [JSE:PFG] posted a sharp rise in first-half profit on Monday and said it sees a tough trading environment ahead as input costs rise and consumer spending patterns remain uncertain.

The company, which makes bread, breakfast cereal and juices, said diluted headline earnings per share for the six-months to end-March totalled 231.4c, compared with 80.3c a year earlier.

"Continuing upward pressure on costs has necessitated price increases in most categories since March. However, we believe there is room for further growth in our range of essential foods," Andre Hanekom, Pioneer Food Managing Director, said in a statement.

Headline EPS, the main gauge of profit in South Africa, strip out certain one-time items.

It said revenue rose 4% to R8.3bn.

Food also said it anticipates a tough trading environment ahead as input costs rise and consumer spending patterns remain uncertain.

"The financial performance of the group for the full year will be influenced by the group's ability to manage margins," the company said.

The company declared an interim dividend of 40c per listed ordinary share.

Pioneer last year agreed to pay R500m in exchange for having investigations against it related to unfair competitive practices dropped.

The company had also agreed to a reduction in its gross profit by R160n over a defined period for a selection of wheaten flour and bread products and to increase its capital expenditure by R150m.

Pioneer shares have gained nearly 6% so far this year, compared with a 1% drop in the JSE all-share index.