Tiger Brands trading statement

10-FEB-15

Tiger Brands released a trading update yesterday that Mr(s). Market definitely did not like. This was for their first quarter to end 31 December 2014. There was only a 7 percent increase in turnover to 8.2 billion Rand, the company suggested that tough trading conditions persist locally here in South Africa, as well as across the continent in terms of their business operations. Higher pricing, having to pass on the costs to the consumer, has impacted sales. The weaker Rand has not helped, many prices of raw commodities are set in US Dollars. The company has however still maintained their market share. There is a conference call at midday today, we can get a sense of how the weaker Nigerian market has been impacting the group, that no doubt will be one of the talking points. As the company points out in the trading update, currency issues (as a result of lower oil prices) have created liquidity issues with the currency in Nigeria.

Expectations of an immediate reprieve in Nigeria are a little too early to call, the falling oil price is having a negative impact on the Nigerian budget, equally a dodgy looking political landscape. If you did not hear, Nigerian elections were postponed for 6 weeks yesterday. And the Boko Haram insurgency has been well documented, for the time being there seems to be no winning there for the Nigerian government. More will be revealed on the conference call today no doubt, I would say that perhaps the Nigerian focus has been too much in this trading update. The stock slumped five and one quarter percent, the share price is about flat this year and again flat this morning as folks wait for more information around midday.