AVI shows brave face despite tough trading conditions
AVI, which owns brands such as Five Roses, Bakers and Willards, said on Monday it expected consumers to remain under pressure and heightened competition for market share to persist.The company is echoing the same concern about trading conditions as its rivals Tiger Brands and Pioneer Foods, which have found themselves squeezed by rising input costs and spending constraints. Consumers’ disposable income has come under pressure due to high levels of unemployment and indebtedness.AVI reported a 6.6% rise in headline earnings per share from continuing operations to 341.2c for the year ended June 2013. Revenue grew 11% to R9.22bn, while operating profit was up 11% to R1.53bn.The company’s dividend cover was reduced from 1.5 to 1.25 times covered by earnings.Avior Research equity analyst Jiten Bechoo said AVI was a "high quality company"."It has continued high cash generation and very low gearing and a strong balance sheet that’s capable of giving even more dividends, as they alluded to. ...
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