South Africa’s largest food producer booming

Tiger Brands’ turnaround plan has proven highly beneficial to the company and its shareholders, as the food producer has returned to a net cash position and declared a special dividend in its latest interim results.

Tiger Brands is the country’s largest food producer and owns well-known South African brands like Jungle, Tastic, Doom, All Gold, Oros and KOO.

On Wednesday, 28 May 2025, Tiger Brands released its interim results for the first half of its 2025 financial year, which ran for the six months ended 31 March 2025.

The company’s overall revenue improved by 1.9% to R18.5 billion compared to the prior year, primarily due to 2.1% price inflation and flat volume. 

On a like-for-like basis, excluding the impact of discontinued divisions or products, underlying volumes grew by 2.6% for the first half, with price inflation at 1.4%. 

The food producer explained that this underlying volume growth was driven by deliberate volume recovery initiatives.

This also saw the company’s gross margin continue its upward trajectory, increasing to 29.6% from 28.5% in the prior year on a comparable basis. 

Tiger Brands said this increase was driven by naked margin expansion due to price deflation in key commodity categories, factory efficiencies, and value engineering savings on recipes and packaging.

The group’s operating income for H1 2025 increased by 29.9% to R1.8 billion, driven by topline growth, logistics optimisation savings delivering ahead of expectations, and other continuous improvement initiatives. 

As part of Tiger Brands’ turnaround plan, the company has been streamlining its operations by disposing of some businesses that no longer fit its focus.

In particular, the company highlighted that the disposal of Baby Wellbeing generated R455 million in non-operational profit after tax for the group.

In addition, Tiger Brands’ after-tax profit from the disposal of its 24.4% stake in Empresas Carozzi SA in H1 2025 amounted to R304 million. 

As of 31 March 2025, the total proceeds from these transactions were R4.4 billion, with the remaining R0.6 billion received in April 2025.

However, these disposals also impacted Tiger Brands’ income from associates, which decreased by 15.0% to R337 million.

This was primarily due to the conclusion of the Carozzi disposal in February 2025, which resulted in earnings from the associate for only five months of H1 2025. 

Returning to net cash

Positively, the company said its net financing costs for the year were R21.5 million, significantly lower than the R160.7 million in the prior year.

This is due to the company’s reduced debt levels, which result from its increased cash reserves, bolstered by the sales Tiger Brands concluded in H1 2025.

The company’s cash generated from operations increased by R2.6 billion to R3.4 billion (H1 2024: R0.8 billion).

The increased cash generated from operations, combined with the proceeds from Tiger Brands’ disposal of non-core operations, resulted in the group attaining a net cash position.

The company went from a net debt position of R2.7 billion in H1 2024 to a net cash position of R5.9 billion in H1 2025.

Tiger Brands said these strong results reflect its management’s ability to drive growth in what continues to be a challenging consumer environment. 

“Despite early signs of economic recovery, which provided slight reprieve on the prioritised food basket inflation, consumers remain under pressure and continue to seek value,” it said.

“Tiger Brands has achieved growth in line with guidance, underpinned by a continued focus on driving value for consumers, execution of key strategic priorities, and implementing continuous improvement initiatives.”

The company’s earnings per share (EPS) from total operations increased by 50.9% to 1,347 cents. Headline EPS (HEPS) from total operations increased by 17.6% to 951 cents per share.

The variation between HEPS and EPS mainly relates to the profit Tiger Brands made on the disposal of its Baby Wellbeing division and its stake in Carozzi.

On the back of these strong results, Tiger Brands declared an interim ordinary dividend of 415 cents per share for the six months ended 31 March 2025.

In addition, the company declared a special dividend of 1,216 cents per share for the six months ended 31 March 2025.