Johannesburg - Branded consumer products group AVI [JSE:AVI]
on Monday reported a 31.1% rise in diluted headline earnings per share (Heps)
from continuing operations to 239.7 cents for the year ended June 2011, from
182.9c a year ago. Heps from continuing operations was up 31% to 248c.
Revenue from continuing operations grew 5.7% to R7.69bn and
operating profit from continuing operations was up 25% to R1.1bn, while cash
generated from operations increased 24% to R1.4bn.
During the period, R496m was returned to shareholders via a
special payment and share buy-back. A final dividend of 75c/share was declared,
for a total normal dividend of 125c/share - up 25%.
The company said it had enjoyed strong consumer demand in
the fashion brand businesses during the 2011 financial year. Both Spitz and
Indigo achieved strong volume growth and strengthened their respective market
positions.
In the food and beverage portfolio most of AVI's brands
performed well in a competitive environment where consumer spending was
relatively constrained.
The tea category had a strong second half, gaining volumes
and market share for the year, the coffee category continued to grow steadily
despite a price increase in the second half and the creamer category benefited
from strong demand.
Biscuit volumes declined due to selling price increases and
product rationalisation during the year, compounded by rising local and
imported competition.
I&J's sales volumes were in line with last year, with
higher quota volumes offset by a reduction in purchased raw material.
Looking ahead, the group said recent local and international
data indicate that economic growth in South Africa over the next few years is
likely to be slower than expected.
In line with this, consumer demand is likely to remain restrained
in the year ahead and AVI will need to earn future profit growth by competing
effectively in the marketplace and continuing to reduce our cost of doing
business.
"There is a strong portfolio of initiatives planned for
the next financial year, covering local and regional market opportunities,
factory improvement and ongoing development of shared and support
services," it said.
In addition, the group has a material level of forward
exchange cover in place to protect the cost of imports. Commodity costs have
started to soften, both of which will allow more leeway to manage the balance
between price, volume and profitability with the flexibility constrained
trading environments require.
I&J has the advantage of increased quota and will
benefit materially if the rand weakens against the euro.
"The board is confident, despite prevailing market
conditions, that AVI will continue to deliver profit growth from the current
brand portfolio while remaining vigilant for brand acquisition opportunities
both regionally and domestically," the group concluded.