Tiger Brands: Summary of Interim Results - Strong Cash Generation + Special Dividend
- Lester Davids
- 37 minutes ago
- 2 min read
Research Notes For 26 to 30 May > https://www.unum.capital/post/r2630may
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Here's an A.I-assisted summary of Tiger Brands' H1 2025 results, highlighting bull and bear factors:
Bull Factors:
Strong Earnings Growth: Significant increases in operating income (up 30%), EPS (up 51% total operations, 78% continuing), and HEPS (up 18% total operations, 34% continuing). Core HEPS surged by 54%.
Like-for-Like Volume Growth: Underlying volumes grew by a healthy 2.6%, indicating successful volume recovery initiatives.
Improved Margins: Gross margin expanded due to commodity price deflation, factory efficiencies, and value engineering. Operating margins also improved across the group and core operations.
Successful Portfolio Optimisation: Proceeds of R4.3 billion from the sale of non-core operations (Baby Wellbeing and Carozzi) strengthen the balance sheet. Progress made on the disposal of Langeberg & Ashton Foods and Maize Milling.
Strong Cash Generation: Cash generated from operations increased significantly, leading to a strong net cash position of R5.9 billion (compared to net debt previously). Commendable cash conversion ratio of 66%.
Shareholder Returns: Increased interim dividend (up 19%), significant share buybacks completed (R1.25 billion), and a substantial special dividend declared (1 216 cents per share).
Strategic Progress: Clear identification of core and non-core businesses, focus on cost leadership, superior channel presence, deliberate growth platforms, and brand rejuvenation.
Segmental Strengths: Strong operating profit growth in Milling and Baking and Grains, and solid revenue growth in Snacks, Treats and Beverages.
Bear Factors:
Challenging Consumer Environment: Consumers remain under pressure despite early signs of economic recovery.
Reported Volume Flat: Overall reported volume was flat, with price increases being the primary driver of revenue growth.
Decline in Home and Personal Care: Revenue and operating income decreased in this segment due to competitor intensity and supply challenges.
International Weakness: Revenue decline in Chococam due to ZAR appreciation, offsetting local currency growth.
Working Capital Normalization Expected: The significant working capital improvement in H1 is expected to normalize in H2.
Continued Non-Core Operations: Uncertainty remains around the final decisions for the remaining non-core operations.
In summary, Tiger Brands delivered a strong first half driven by successful strategic execution, portfolio optimization, and cost efficiencies, leading to significant profit and cash flow improvements and enhanced shareholder returns. However, they continue to navigate a challenging consumer environment and face some headwinds in specific business segments.
Previous Post (Monday 26 May) Tiger Brands Overbought On 3x Time Frames
M = Monthly
W = Weekly
D = Daily
Previous Post
The share was featured at 19850c (13 June 2024), looking for a measured move to R242. Today (08 May 2025), the share reached a multi-year high of R302.
(Previous Post) TIGER BRANDS: Full Target Reached at R242 - Tuesday, 27 August 2024
Pre-Market
Bank/Take Profit
Yesterday's high = 24995c
Lester Davids
Senior Investment Analyst: Unum Capital
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