South Africa’s leading consumer goods company, Tiger Brands Ltd (JSE: TBSJ.J), reported stronger-than-expected earnings for the first half of its financial year, boosting shareholder returns with a special dividend and announcing strategic portfolio changes, including the sale of its maize milling operations.
For the six months ending March 31, 2025, the maker of popular household brands like Jungle Oats and Koo baked beans posted a 34% jump in headline earnings per share (HEPS) from continuing operations, climbing to 10.21 rand, compared to 7.63 rand recorded in the same period of 2024. This figure exceeded market expectations, with analysts at SBG Securities having projected a 24% increase.
As part of its strong financial showing, Tiger Brands declared an interim dividend of 415 cents per share, representing a 19% increase year-on-year. In addition, the company announced a special dividend of 12.16 rand per share, set to return an additional 1.8 billion rand (approx. $100 million) to shareholders. This move reflects the group’s improved cash flow and efficient working capital management.
Tiger Brands attributed its improved financial position to better cash control and proceeds from ongoing portfolio optimisation, which involves divesting from non-core assets. The company’s net cash position has strengthened significantly as a result.
In a major strategic shift, Tiger Brands also announced the sale of its maize milling business, which includes the well-known Ace maize meal brand and its wheat milling operations. While the identity of the buyer has not been disclosed, the company said the maize segment is no longer considered core to its future business model due to intensifying competition from regional millers and evolving market dynamics in South Africa.
According to Tiger, the decision was influenced by the structural changes in the maize category, where smaller and regional players have eroded traditional market dominance. The exit aligns with the group’s broader strategy to streamline operations and focus on categories with higher growth potential and stronger margins.
Furthermore, the group revealed that it is exploring strategic options for other non-core businesses, including:
King Foods, which produces value-added protein products,
The chocolate segment within its snacks, treats, and beverages unit,
Chococam, its Cameroonian confectionery subsidiary.
On the revenue front, the company reported a modest 1.9% increase to 18.5 billion rand, primarily due to price inflation of 2.1%, while sales volumes remained flat. However, when adjusted for discontinued operations, underlying volumes rose by 2.6% on a like-for-like basis, indicating healthy performance in core continuing segments.
Tiger Brands’ management stated that its sharpened focus on core operations, cost discipline, and improved operational efficiencies are positioning the company for sustained growth despite challenges in consumer demand and rising input costs.
With inflation pressures persisting and consumer purchasing power under strain across South Africa, the company’s ability to deliver margin expansion and boost shareholder returns marks a noteworthy performance in a challenging economic environment.
Tiger’s proactive move to exit non-core and underperforming categories, while concentrating on high-performing segments, could provide a more resilient foundation going forward. The sale of the maize business may also open opportunities for reinvestment in more strategic areas of growth across Africa.
