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Research archive for TBS

Dangote once off, otherwise

21 May 2014

This morning we received interim results from Tiger Brands for the 6 month period ending 31 March 2014. As Sasha mentioned a few days back they are taking a write down from the 63.35% Dangote Flour Mills (DFM) stake which will have an effect on Earnings. Lets first look at current operations then we can look at the Dangote Mills issue.

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Trading update

15 May 2014

Also with an announcement, but not results from Tiger Brands, but rather a trading update for the six months to end March. At face value it hardly looks exciting, EPS (excluding once offs) will increase by 6 to 10 percent. Once off? Well, it is something that we knew, right? Dangote Flour Mills, or DFM. The Nigerian business. Dangote of course is surname of Aliko, the richest man in Africa. He sold this business to Tiger and clearly they overpaid. They have decided to "impair the full carrying value of the goodwill and intangible assets relating to the investment." I hear you with a tentative "yes" say, "well, what is the amount?" Here goes, and make sure that you are sitting down: "The value of the impairment amounts to R849 million which will be included in abnormal items in the group income statement for the half year ended 31 March 2014." You can tell that the market was anticipating this, in fact worse, because Tiger Brands share price is up nearly three percent. More when the results are released on the 21st of May. Next week Wednesday.

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Weak trading update for Q1

12 February 2014

Yesterday we received a trading update from Tiger Brands. Let's get straight into it, Here are the highlights.

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The Tiger within your Brands.

22 November 2013

Tiger Brands released their results yesterday, with the Key financial indicators according to the SENS are:

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Tiger Brands amazing long term performance

30 May 2013

Byron beats the streets on Tiger Brands today. The company that was founded seemingly in 1896, well according to their website anyhow. Tiger Oats, the company that renamed to Tiger Brands in the year 2000. Fifteen years ago the share price low was 21.13 ZAR. Before you say, well, it is not even 300 now, remember that the company unbundled Astral in April 2001, Spar in August 2004 and Adcock Ingram in late August 2008. If you had continue to hold those, notwithstanding recent underperformance by Astral and Adcock, you would have done fabulously well. For the record, you got 1 Spar and 1 Adcock for every 1 Tiger you held, and 0.25 shares of Astral for every 1 Tiger Brands shares. The collective value of those companies is close to 500 bucks, 495.6 ZAR as of this morning.

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Tiger Brands trading update

18 February 2013

The Tiger Brands share price has been very bumpy of late. It peaked at R335 a share on the first day of the year then dropped throughout January to around R290. It slowly started recovering until the trading update last week which knocked the share price 8%, back to R290. It has since recovered, now trading at R305. We looked at the trading update but not in full detail, last week was very busy. What has seemed to spike the price again was the Pioneer update on Friday and then of course, Berkshire Hathaway paying a 20% premium for Heinz.

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More insight on the Dangote Flour Mills deal

26 September 2012

Tiger Brands, that purchase announcement from yesterday, the purchase consideration is even higher than I initially thought. The total purchase consideration by Tiger of Dangote Flour Mills shall not exceed 4.1 billion Rands. That is the maximum that they are going to pay. The initial 1.5 billion Rands stands, and THEN on top of that, Tiger are going to pay 14 times the current years adjusted profits after tax (according to a pre determined formula) for the current financial year for DFM which ends on the last day of the year. Their share at least, 63.35 percent.

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Tiger Brands completes their Nigerian acquisition

25 September 2012

Tiger Brands have announced this morning that they have effectively concluded their purchase of 63.35 percent of Dangote Flour Mills, purchasing the equity stake from the parent company, Dangote Industries. Dangote Industries will continue to hold a ten percent holding in Dangote Flour Mills. You will recall that we wrote this up at the time, in early July when the announcement was first made: Tiger Brands close to acquiring stake in Nigerian company. As we wrote at the time, whilst Nigeria is an exciting market for many companies globally, the purchase consideration (which we calculated at the time) was around 2 percent of Tiger's market cap.

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Tiger Brands close to acquiring stake in Nigerian company

05 July 2012

Tiger Brands have reached an agreement in principle, after much talk, to buy a 63.4 percent stake in Dangote Flour Mills from parent company Dangote Industries. Aliko Dangote, who is the richest fellow in Africa, is obviously getting the parent company to cash in here. Dangote is still the chairman of the Flour Mills business that has his name, but perhaps for not too much longer. As far as I understand it, Dangote Industrials will continue to hold a 10 percent stake in the business, should the deal be concluded. Now, as far as I can understand from the Bloomberg information on Dangote Flour Mills: Dangote Flour Mills PLC (DANGFLOU), the market cap is 29750 million Naira. Or 29.750 billion Naira.

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Tiger Brands results, slightly disappointing

22 May 2012

Tiger Brands have released results this morning for the six months to end March. This is a business that has brands entrenched in your pantry for over generations, All Gold tomato sauce is a big hit in my house, Black Cat peanut butter is great as long as you are not allergic to the thing, Colman's mustard is my pops favourite, Fatti's & Moni's I don't buy anymore, I make my own pasta (no really), Koo is baked beans, Beacon sweets, Maynards chewy sweets are always a favourite, Ace maize meal a huge staple in South Africa, Albany bread, I use the sliced kind, Golden Cloud, I use it sometimes, Jungle oats, I should eat more of that, Tastic rice, I like it a lot, more recently Energade, which I used to drink when I ran more (I should, lazy bum me), old favourite Lucky Star, not my favourite, the baby products, Elizabeth Arden and Purity which I don't use anymore, my babies are not babies anymore. Putting a feel to the stock, something we do not do enough of.

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Tiger client interaction

17 February 2012

I chatted the other day about how good Tiger Brands had been as an investment, and one of our favourite readers returned this comment:

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Tiger Brands trading statement from their AGM

15 February 2012

Tiger Brands released a trading update yesterday that coincided with their AGM, which made for more than interesting reading. "The trading environment continues to be characterised by the slow recovery of consumer spending in the domestic market and rising cost inflation, resulting in an overall market volume decline in the categories in which the Company operates." Does not sound too great for a company's stock price that is up nearly 37 percent over the last 12 months. The stock is flirting with the all time high, which is just shy of 260 ZAR. The share price closed up three quarters of a percent yesterday at 250 ZAR on the nose. This is one of the great investment successes in South African recent history. And excuse me for saying this, but there is nothing overly wow about the company. Baked Beans. Jam. Bread. Flour. Rice. Maize meal.

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Tiger Brands results surprise

23 November 2011

Byron's beats You have to hand it to Tiger Brands, they seem to deliver time after time, year after year. They have unbundled some quality (with a q and not k) companies along the way. Spar, Adcock Ingram, Astral Foods spring to mind. Tiger itself was unbundled from Barloworld. Barloworld bought a major chunk of Tiger back in 1982. So perhaps the argument is circular, in terms of what has been unbundled and what has not! I know that out there, a reader, who I know, lived through the investment as a shareholder, perhaps he can send us the full story. Byron reviews Tigers results from this morning:

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Tiger Brands trading update

16 November 2011

Tiger Brands released a voluntary trading update yesterday morning, now the voluntary part means that it is below the levels of increase, or decrease for them to be required to tell the market. But, in this day and age, shareholders like guidance and comfort blankets. Here goes: ".... it is expected that headline earnings per share ("HEPS") and earnings per share ("EPS") will reflect increases of between 10% and 15% and between 15% and 19% respectively, compared to the previous financial year."

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Tiger Brands half year numbers

30 May 2011

Tiger Brands released six monthly results to March this morning. EPS higher by 13 percent, HEPS which includes empowerment transaction costs (150.7 million Rand) were two percent lower at 747.9 cents per share. Revenue was only slightly higher, Tiger has the following explanation: "The modest increase in turnover was influenced by price deflation in certain food commodities relative to pricing levels for the same period last year, the impact of promotional discounting in certain categories to restore volume growth, and a continuation of the difficult trading conditions experienced in the previous financial year." The dividend for the first half came in at 281 cents, a little better than last year.

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