AVI | It's all in the price
Despite an adverse operating environment, AVI's FY ‘18 results were strong compared to its peer group. HEPS grew 7% yoy to 543cps. Over the last 12 months, price restraint and discounting were used well considering weak demand and intense competition. In the current down-trading environment, consumers gravitate to cheaper brands. AVI did not want to use GP margins to achieve these volumes. We believe astute revenue management (price, volume, margin balance) will influence another set of strong results in FY ‘19 (+5% yoy). We believe AVI's scale and market share in its categories will provide a wide moat around current margins. Management will continue to innovate to attract clients and end-customers. Despite stable earnings growth, the share is expensive at current levels.AVI is a branded consumer products company. Co.'s business segments include: Entyce Beverages, which sells tea, coffee and creamer, primarily in South Africa and neighboring countries; Snackworks, which sales a range of sweet and savory biscuits and baked and fried potato and maize snacks; I&J, which catches fish in South African waters, and processes, markets and distributes seafood in local and international markets (mainly Europe and Australia); Fashion brands, which provides personal care and footwear and apparel offerings; Personal Care, which creates, manufactures and distributes cosmetic and toiletry products that range from mass market to bridge fragrances; and Footwear and Apparel.
Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.
Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.
Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.
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