The foods group said on Tuesday that the South African Reserve Bank and the Securities and Exchange Commission of Nigeria had approved its agreement with Nigeria’s Dangote Industries to dispose of its shareholding in Tiger Branded Consumer Goods in that country. This had cost shareholders billions of rand in writedowns.
“The only remaining condition is approval of the Nigerian Stock Exchange, which is expected shortly,” it said.
Tiger Brands saw a 7% rise in turnover from continuing operations in the period, compared with the same period previously. But domestic sales volumes had softened marginally on increased pricing pressure from a weaker rand, and a slowdown in consumer demand.
“With consumers under considerable financial pressure, the impact of the depreciating rand and rising soft commodity prices was only partially offset by price increases,” acting CEO Noel Doyle said.
But the group said exports and the international businesses had improved performance, gaining from rand weakness and the turnaround of underperforming operations. However, given sustained weakness of the rand, inflationary pressures on raw material costs were likely to rise in the year.
Mr Doyle said the maize and sorghum businesses had been hit hard by drought. It was also fighting off volume declines in Western Cape bread markets amid fierce competition.
“In a constrained consumer environment where competition is intense, it is expected that trading conditions will remain challenging as the company seeks to pass through price increases,” the group said.