CHRIS GILMOUR: Food & beverage brands lead the way as AVI weathers pandemic
Gross margin came under pressure, but declined only slightly, from 41.5% to 39.6%
AVI is arguably SA’s best food company. It is probably more accurately defined as a brands company rather than a food company, as it’s not involved in the heavy, commodity-type foods such as maize meal and bread that traditional food companies such as Tiger, Pioneer and Premier produce as their staple fare.
AVI has always produced niche food products as well as personal care and more recently, upmarket clothing and footwear. This mix has stood it in good stead over the years and has allowed the group to pay predictable dividends, including regular special dividends. Many investors have missed out on AVI over the years as it has often been regarded as being too expensive. However, top quality management with concomitant stable earnings and dividends doesn’t come cheaply. It has weathered the Covid pandemic remarkably well for a consumer-orientated company. ..
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