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Newspapers: ABC Q1 2024: The slow steady downward trickle continuesDanette Breitenbach
AVI injects R65m into its coffee creamer business
The company said it grew creamer revenue 23.9% in the six months ended December thanks to greater demand‚ market share gains and higher selling prices.
It spent R17m on growing creamer capacity at a factory in Isando‚ Gauteng‚ while the bulk of the investment will be spent in the remainder of AVI's 2015 financial year to June.
AVI CEO Simon Crutchley said on Monday, 9 March 2015, the company estimated it had grown its share of the South African creamers market to slightly below 40%.
Creamer forms part of AVI's Entyce Beverages business‚ which also sells tea and coffee and grew revenue 10.8% to R1.57bn for the six-month period. Lifted by fishing business I&J‚ AVI on Monday reported an 11.1% increase in half-year group revenue to R6bn and a 13% improvement in operating profit to R1.15bn.
Its four food and beverages businesses all reported revenue and operating profit growth of more than 10% thanks to volume gains and selling price hikes.
The price hikes‚ which would also be necessary in the second half‚ were needed "to protect our gross profit margins because of an 18-month period of pressure on our cost base‚ particularly because of the exchange rate"‚ Crutchley said.
The company announced a special dividend of 200c a share in addition to a 132c interim dividend‚ which was 10% higher than previously.
"We have a strong cash-generative business‚ so net of needs for capex and then our normal payout ratio‚ that normally leaves us with an opportunity to pay out a special dividend reasonably frequently‚" Crutchley said.
AVI last paid a special dividend in its 2013 financial year.
AVI's I&J unit grew revenue 19.1% as a weaker rand helped export sales‚ which make up about 60% of the division's sales and are largely directed at southern European countries.
I&J's contribution at a profit level was tempered by unrealised losses on fuel hedges. AVI uses fuel oil swaps for hedging purposes so as to manage a portion of its exposure to the effect of fluctuations in the oil price on diesel fuels.
Source: BDpro via I-Net Bridge
Source: I-Net Bridge
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