Growth in volume has been 'difficult to achieve': Pioneer Food

The CEO of the group‚ Phil Roux‚ said Ceres Beverages and Bokomo Foods had performed well‚ "bolstered by strong export growth".

Meanwhile‚ the targeted unbundling of the loss-making Quantum Foods division was "on track".

Roux‚ who joined the group as CEO earlier this year‚ said "significant change is under way" at Pioneer Foods‚ in order to position the group more competitively.

He said the group's structure was previously very decentralised‚ and Pioneer Foods was looking for synergies and internal capabilities where possible. The group was "creating parenting advantage where it counts".

"Clarity of strategic direction enabled by a more efficient business model should bode well for medium-term prospects for the organisation‚" he said.

Bokomo Foods achieved 15% revenue growth‚ boosted by growth in exports‚ while the beverages division reported low single-digit top-line growth in the domestic market but "big growth from exports".

Although some divisions benefited from a rise in sales outside South Africa‚ some domestic revenue growth was achieved‚ in line with the growth reported by large retailers‚ Roux said.

Pioneer Foods said volume growth in its Sasko business "remained muted and price recovery continued to be challenging‚ most notably in the wheat and rice product categories".

Quantum Foods' performance was negatively affected by chicken imports.

In September‚ the group announced that it intended to unbundle Quantum Foods and list the poultry and eggs business as a separate entity on the JSE in 2014.

Roux said the group was looking to complete the unbundling between July and September 2014.

Quantum Foods was "hugely dilutive" to the group's earnings‚ having made a loss of R19m in the year ended September and a R42m loss in the prior year.

Roux said raw material costs had risen in the year partly due to exchange rate movements‚ although Pioneer Foods "managed to contain our other operating costs and our production costs below that of our sales growth rate".

Meanwhile‚ South African consumers were under "massive pressure"‚ which made it difficult to grow volumes. Continued price inflation would compound this situation.

As such‚ export growth was expected to "continue to be lucrative". Roux said Pioneer Foods was looking to make "modest investments" in west and east Africa.

He said about 16% of the group's business from continuing operations was from outside of South Africa. This had risen notably over the past few years.

Pioneer Foods declared a final gross dividend per listed ordinary share of 86c‚ a 23% rise on the 70c final dividend in the previous year.

Competitor Tiger Brands last week reported a weak performance for its year ended September‚ similarly weighed down by a South African consumer under pressure‚ as well as a weak performance from its most recently acquired business in Nigeria.

The group's 63.35% stake in Dangote Flour Mills of Nigeria‚ acquired in October 2012‚ dragged down its headline earnings per share to 1‚624c.

This was a 3.8% decline on the previous year - but with Dangote excluded from the results‚ headline earnings per share would have risen 5.4% to 1‚781c.

Tiger Brands's fall in headline earnings was despite a 19% rise in group turnover to R27bn.