Pioneer foods plunges 10% ahead of release of results
JSE-listed food producers continue to face pressure from a weak rand, rising fuel costs and subdued economic environment
The share price of consumer staples group Pioneer Foods dropped as much as 10% on Wednesday, bringing its yearly loss to almost 50% ahead of the release of its results on Monday. At 1pm, Pioneer had pared losses and was down 5.83% to R77, with other JSE-listed food producers likewise under strain. It is likely that pressure on these stocks is due to awareness of the increasingly tough trading conditions facing these companies, Vunani Securities small-and medium cap analyst Anthony Clark said. Producers are facing rising input costs — with the price of maize rising 30% in the last 12 months — and are finding it difficult to pass this cost onto consumers, said Clark. Unless there is a major pick-up in cereal production in 2019, it is likely to be a tough year for these stocks, he said.
Pioneer owns brands such as Sasko, Bokomo, Marmite, Redro, Liquifruit, Moir’s, Ceres and White Star maize meal. It said in October that it expected headline earnings per share (HEPS) to rise betwe...
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