South African News and Market Update: Tiger Brands to cut costs by R450m as full-year profit slumps, and more

 South African News and Market Update: Tiger Brands to cut costs by R450m as full-year profit slumps, and more

South African News and Market Update.

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Shares on the Johannesburg Stock Exchange (JSE) followed the trend of most emerging and developed markets, closing lower for the second day in a row after a six-day winning streak. The benchmark All-Share index lost 0.69% to close at 70,376 points, while the blue-chip Top 40 index was down 0.65% at at 63,871 points. Financials lost 1.79% while the local banking index slipped 2.01%. Absa was the worst performing company in the top 40, down 3.63%, with Woolworths following closely behind, down 3.59% on Friday.

The rand fell to its worst level in a year against the dollar on Friday as the contagion effects of the Turkish lira’s collapse on emerging market currencies played a role along with worries about rising coronavirus cases and lockdowns in Europe. The local currency appeared to have fully weathered the impact of Thursday’s 25 basis point rate hike by South Africa’s central bank and will continue to focus on global factors. At the close of trading, the rand was trading around R15.73 against the dollar, 0.54% weaker.

Crude oil fell to a seven-week low this morning, continuing its slide from the previous day. This was due to concerns of oversupply after Japan said it was weighing the release of oil reserves, and excess demand due to the worsening COVID -19 situation in Europe. Japanese Prime Minister Fumio Kishida signalled Saturday he was ready to counter rising oil prices after the United States asked to release oil from its emergency stockpiles. Meanwhile, concerns are growing that renewed COVID -19 curbs could hurt demand. Gold prices stabilised today after hitting the lowest level in nearly two weeks as a declining dollar lent some support to the metal.

Tiger Brands to cut costs by R450m as full-year profit slumps

Listed consumer goods maker Tiger Brands will cut costs by R450 million in the 2022 financial year after the recall of about 20 million canned vegetables and the July riots cost the company R732 million before tax. On Friday, the group released its full-year results for the financial year ended September 2021, which showed a drop in earnings per share (Heps) slumped 6%. The latest Heps was 1,127 cents, compared with 1,196 cents for the previous (2020) Fiscal Year. The decline in overall earnings, as well as operating profit, was mainly due to losses incurred from the recall of Koo and Hugo canned vegetables, as well as the impact of the unrest in KwaZulu-Natal and parts of Gauteng in July. The operating profit (profit) from continuing operations declined by about 10% to R2,2 billion.

Pepkor recovers significantly

Pepkor’s results for the year to end-September 2021 show a huge turnaround in what has been a very interesting and challenging year. While management indicated that profit was up by about 115% and that the company met and even exceeded its target of bringing profitability to 2019 levels, the actual numbers on the balance sheet show that the recovery was much greater than management had anticipated. Profit for the year recovered from a loss of R2,86 billion in 2020 to R4,88 billion in 2021, bearing in mind that the main reason for the loss in the previous year was a huge write-down on goodwill. Goodwill was written down by a massive amount of R4.7 billion, which had to be reflected in the income statement.

Mandy Nunes

https://gvmarkets.com/

Mandy Nunes is the Chief Marketing Officer for GV Markets. With 15 years of experience in the Financial Services Industry within the South African market, she has held various responsibilities within the business development, marketing, operations and regulatory space – leading to a very fitting position within the Trading and Investment environment. Mandy has notably been the editor of 'The Ordinary Millionaire', along with having written numerous pieces within the industry at large. Holding both legal and wealth management qualifications, her goal is to bring about massive success for, and within, GV Markets. GV Markets is a South African forex and CFD broker that offers comprehensive trading solutions to both retail and professional traders. GV Markets prides itself in being a well-regulated and reputable STP brokerage that works according to a No-Dealing Desk trading model, offering traders access to some of the best liquidity providers in the country.

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