May 22 (Bloomberg) -- Tiger Brands Ltd., South Africa’s largest food company, said expansion into the continent remains a priority as the company increased external investments in the first half.
“The expansion into new markets, primarily in the rest of the African continent, remains a key strategic thrust, both through acquisitions and exports,” the Johannesburg-based in a statement today.
Tiger Brands spent 670.3 million rand ($81 million) on acquisitions and on capital expenditure in the first half through March, raising its shareholding in Zimbabwe’s National Foods Holdings Ltd. by 11.2 percentage points to 48.6 percent, it said. Sales growth of 3.4 percent in South Africa lagged behind the overall increase of 12 percent, it said.
Tiger Brands, which produces Tastic rice and the All Gold food lines, expects “domestic economic conditions will continue to be challenging for the rest of the financial year” and South African consumer spending “will remain under pressure.”
Retail sales declined a seasonally adjusted 1.2 percent in the first quarter, the statistics agency said May 16. Economic growth may slow to 2.7 percent this year from 3.1 percent last year, Gordhan said on Feb. 22.
“Price increases to recover costs will therefore have to be judiciously managed and cost control and operational efficiencies throughout the supply chain and support functions will remain key focus areas,” the company said.
Profit rose 8 percent to 1.28 billion rand from a year earlier. The company declared a dividend of 2.95 rand a share.
-- Editors: Ana Monteiro, Karl Maier
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