Tiger Brands Integrated Annual Report 2015

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Operational review continued
48 Tiger Brands Limited integrated annual report 2015
Rm 2015 2014
%
change
Turnover 3 309,6 3 120,1 6
Operating loss* (438,9) (281,9) (56)
Operating margin (%) (13,3) (9,0)
*Before abnormal items.
Nigeria
As set out more fully in the chief financial officer’s report,
subsequent to the year end, Tiger Brands reached
agreement to sell its interest in TBCG to Dangote Industries
Limited subject to regulatory approvals.
Deli Foods (wholly owned)
The performance of Deli Foods was affected by currency
devaluation and the loss of a key production line in the first
half. The new replacement line was commissioned in
November 2015.
Outlook
Economic conditions and intense competition,
exacerbated by fuel shortages, will continue to make
trading in Nigeria challenging in the short term. However,
Nigeria remains an important growth market and Tiger
Brands is committed to maintaining its presence through its
two remaining operations.
Tiger Branded Consumer Goods plc (TBCG) (formerly
Dangote Flour Mills) (65,7% held)
Initiatives on quality, distribution and innovation are reflected
in overall volume growth of 20%, with flour volumes up by
19% and pasta by 59%. Volume growth, however, did not
produce any appreciable improvement in the level of
operating losses as competition intensified in a deteriorating
macro-economic environment. Results were impacted in the
third quarter, in particular after a delay in passing on higher
raw material costs caused by the naira’s depreciation in
February 2015. In addition, operations were disrupted by
fuel shortages and labour unrest in the country’s trucking and
ports services.
Good progress has been made with innovation, successfully
introducing smaller pack sizes for semolina and wholemeal
under the Tastic brand while new pasta products were
launched after the year end.
Salient features
❍❍Significant volume growth
❍❍Key operating objectives achieved
❍❍Decisive action taken to halt further financial support