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PERFORMANCE REVIEW
48
Tiger Brands Limited Integrated Annual Report
2014
Divisional review
continued
Associates
operating income from Horse Mackerel.
Although a relatively small contributor, a very
good performance was recorded in the Fries
business. Commercial Cold Storage reported
strong growth for the year.
Canned Fish volumes grew domestically by a
creditable 3% in a challenging domestic market.
This level of volume growth coupled with firmer
pricing in the second half of the year resulted in
good growth in operating profit. The Fishmeal
business, which reported a significant operating
loss of R51 million in the previous year due to
record low catches, recorded an operating
profit of R33 million in the year under review.
The improvement was driven by higher catches
and firmer international pricing, as well as the
positive impact on revenue of the depreciation
of the rand.
Operating income from Horse Mackerel fell from
R363 million in the prior year to R281 million in
the year under review due to lower catches as
a consequence of reduced quota in Namibia.
Hake profitability improved due to stable market
pricing, the favourable impact of rand
depreciation and operational efficiencies.
French Fries returned to profitability as a
consequence of higher volumes driven by
improved quality of available raw material
and firmer market pricing.
The Commercial Cold Storage business reported
another year of good growth with operating
income growing by 29%. Improved occupancy
levels, the expansion of capacity in Namibia
and operational efficiencies were the key
contributors to the year-on-year improvements.
UAC Foods (49,0% held by
Tiger Brands)
The year has seen a very competitive trading
environment for the UAC business, particularly in
the snacks category, characterised by a number
of new entrants, new value offerings and
increased demands from large distributors.
Pleasing progress continues to be made in
optimising our facilities and FY2014 also saw
the new investments in Gala capacity being fully
executed. The market penetration initiatives have
delivered pleasing volume growth, particularly in
the eastern region, where we have historically
been under-represented.
The year under review has seen a pleasing flow
of exciting snacking innovation and this initiative
will continue to be supported into 2015.
Good progress has been made in restoring the
profitability of both the Beverages and Dairy
categories on a sustainable basis.
The prospects for the business remain positive
and will be further supported by opportunities
for increased market penetration and consumer-
led innovation.
Oceana (41,9% held by Tiger Brands)
Oceana is a leading fishing company listed
on the JSE. Its headline earnings for the year
ended 30 September 2014 increased by
16% compared to the previous year.
Headline earnings growth was driven by an
18% increase in operating profit compared
to the previous year. Excellent growth in the
operating profit contribution from Canned Fish
and Fishmeal was offset by a decline in the