TIGER Brands, which incurred costs amounting to R732 million owing to the civil unrest and recall of canned vegetable products during the year ended September 2021, has approached the courts for an interdict against acts of intimidation by striking employees at its Durban facility.
Chief executive Noel Doyle said on Friday that the strike was not across the group’s entire portfolio but could have an impact on the ability to service the market if it was not resolved.
“We have lodged court papers because of the violence and intimidation that was experienced yesterday and to potentially bring the strike to a halt. We are also engaged in talks with the trade union and hope the matter can be resolved in the short term,” Doyle said.
The Meat Industry and Allied Trade Union is leading a strike over wages at the company’s Beacon brand in KwaZulu-Natal. Doyle said the company had 41 manufacturing sites and interacted with 14 trade unions. “One strike is not unusual for us. In the year that passed we had a strike action at our Davita facility,” said Doyle.
Tiger Brands, Africa’s largest listed manufacturer of fast-moving consumer goods, is the latest company to be hit by a strike after the South African Commercial, Catering and Allied Workers Union began an indefinite strike over wages at Massmart.
Tiger Brands, which produces staple foods including Tastic, Jungle Oats and ACE Maize Meal, on Friday recorded R27.5 billion in domestic revenue, a 5 percent increase compared to the previous year, despite muted second half growth.
The group declared a 506 cents a share final dividend on the back of strong cash generation. The final dividend coupled with the interim dividend of 320c a share, brought the total dividend for the year to 826c per share, up 23 percent compared to a year earlier.
The total dividend was based on adjusted headline earnings a share to exclude the impact of the product recall and the civil unrest, said the group.
Asked whether the group would declare a special dividend, Doyle said: “We moved outside the normal dividend cover calculation, that is in itself a recognition of gearing or lack of gearing,” he said.
Commenting on the results, analyst at Anchor Capital, Zinhle Mayekiso said Tiger Brand’s operational performance in the 2021 financial year recovered well from the previous period and was predominantly driven by cost containment measures and manufacturing efficiencies.
“However, the recovery was hindered and offset by the product recall and social unrest that took place in July,” Mayekiso said.
Tiger Brands ended the year in a strong net cash position of R2.2bn, up from R1.8bn a year earlier, with cash generated from operations increasing by 34 percent to R4bn.
Total revenue from exports and the international businesses increased by 7 percent to R3.6bn, which was attributable to a strong start to the year as trade in Nigeria resumed following the resolution of a trademark dispute with a former distributor.
Tiger Brands said its deciduous fruit struggled in the second half and the bread market remained challenging in a competitive market. Doyle said the group had growth potential in the rest of Africa and within its core business.
The Tiger Brand share price slipped 0.94 percent to R195.50 on the JSE on Friday.
BUSINESS REPORT ONLINE