AVI reported numbers this morning

AVI reported numbers this morning. This company used to be a recommended stock over here. Nothing sinister for dropping them off the list, rather size and scale. I remember a client once telling me that when he bought a company like this, he did it because folks would always have tea and biscuits. Sales of 7.6 billion Rands, that was slightly higher than last year, profits lower for the full year at 471 million Rands.




You could be forgiven for asking, what do footwear, personal care and food and snacks have in common, but this is a brands business. They try and identify quality brands. Spitz is one such brand, that division that they fall into, fashion brands has shown an increase in profits of 48 percent on sales that increased 16.5 percent. Good for them. Check this line: "Overall footwear volumes grew 12,8% as demand for the core Carvela, Lacoste and Kurt Geiger brands remained strong and the Tosoni brand was successfully re-introduced." Man, I must be a cheapskate because I have never bought a branded shoe other than a pair of running sneakers.



I don't like the fish business. Turns out that there are not that many fish in the sea. Well, there are. But, AVI have been trying to sell an Argentinean fish business for a while now, with no luck for the time being. And I guess they can't just unbundle them, perhaps they could unbundle the whole I&J business. Other than that, they reckon that the going could be pretty good, "....there are a number of exciting and material profit growth opportunities which we will develop in the next year. These range from ongoing efficiency improvements to capacity expansion and growth in new formats using our strong brand portfolio. Several major capital projects in support of this are already in progress and further projects are being finalised for approval."



The overall outlook is a little more muted and almost carbon copies from what we have been seeing from retailers of all sorts lately. "Accepting the general view that consumer spending is showing mixed signs of recovery, the extent to which consumer demand in AVI's categories will grow during the next year remains uncertain. We believe that the somewhat variable demand, low economic growth and tough price competition which characterised the 2010 financial year could prevail for much of the coming year." So, in short I read that the same as everybody else, only that they might be better than most. Gotcha.