Avior Capital Markets - Tiger Brands Limited (1052) Tiger Brands | Beware the Tiger

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Avior Capital Markets

Jiten Bechoo ...

Pratish Soni

Tiger Brands | Beware the Tiger

Tiger Brands (TBS) FY '18 results were weak with HEPS down 26% yoy to c.1 587cps. Excluding losses from the Listeria afflicted meats business and related once-off costs, underlying group HEPS fell 11% yoy to 1 881cps. TBS aims to change the format of product packaging to taylored formats requested specifically by retailers and wholesalers in their distribution channel to recover market share losses across TBS categories. New executives have been appointed to drive these initiatives and increase TBS's response to consumer buying behaviour. In Q4 '18, TBS experienced an improvement in market share of grains and segments of Home Care. TBS must sustain momentum and translate the performance into strong earnings growth for the market to believe the company's fortunes have turned. Theswift resolution of the outstanding Listeria class action law suit should result in share price recovery. TBS has insurance cover for potential claims. SA authorities have given TBS permission to continue operations in Polokwane and Germiston, after being shut down due to the listeria outbreak.

11/01/2019 24 EN

Underlying

Tiger Brands Limited

Tiger Brands is a manufacturer of branded food products. Co. provides a range of categories spanning food, home and personal care products. Co. operates through:The Grains division, which includes maize and wheat milling, bakeries, sorghum beverages and breakfast, rice, oats and pulses, and pasta; The Consumer brands division, which provides groceries, snacks and treats, beverages, value added meat products, out of home, home, personal care and baby; The Exports and International division, which includes, among others, Tiger Brands International Langeberg & Ashton Foods, and Chocolaterie Confiserie Camerounaise; and Nigeria business, which comprises of Deli Foods and Dangote Flour Mills.

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ZAE000071080 Johannesburg Stock Exchange South Africa

Provider

Avior Capital Markets

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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Analysts

Jiten Bechoo

Pratish Soni

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