Publications
Partners
AVI, which owns brands like Bakers, Five Roses, I&J and the shoe retailers Spitz and Green Cross, saw its headline earnings decline by almost 5% in a tough year.
Group revenue for the year to end-June rose by only 1.2%, while cash generated by operations fell by almost 2% to R2.64bn. Net debt at the end of June 2019 was R2.44bn compared to R1.27bn in the previous year.
The company says consumer spending remains under pressure and sales volumes fell in many of its businesses, amid “aggressive competitor discounting”.
These were some of the highlights from its results:
- Biscuits revenue grew 4,4% due to a 2.7% increase in sales volumes and higher prices in the past six months.
- Snacks revenue increased by 3.0%, with 1.5% growth in sales volumes. These products were also sold at higher prices in the second half of the year.
- I&J’s revenue of R2.49 billion was slightly higher, with overall catch rates and size mixes similar to last year. Core hake revenue was slightly up on last year due to an improved sales mix and better export exchange rates achieved. However, an oil hedge contract moved against I&J, costing the company R29m
- Spitz saw a 6.9% drop in footwear sales volumes. Selling prices of core ranges have not been increased since April 2016.
- Green Cross was hit by restructuring costs of R27m.
“Our expectation is that many of our categories will continue to have low, or even negative, growth rates until there is a meaningful improvement in the economy,”
However the group wants to achieve profit growth in the current year, and says it secured foreign currency and key raw materials for the majority of the year’s requirements “at levels that support sound levels of profitability”. It singled out lower rooibos and butter prices than it saw in the 2019 financial year.
Compiled by Helena Wasserman
