Tiger Brands, South Africa's largest food maker, has booked a drop in headline earnings for its full year, hurt by costs from an empowerment deal with black investors.

The consumer goods group reported headline earnings per share of ZAR1.39 (US$0.19) for the year to the end of September, compared with ZAR1.41 last year.

The firm said it was hit by a one-time charge of ZAR152.7m, without which, headline earnings would have gained 6%.

Black Economic Empowerment (BEE) is a programme launched by the South African government to redress the inequalities of apartheid by giving previously disadvantaged groups economic opportunities previously not available to them.

Net profit fell 14% to ZAR2.18bn in the year on the back of a 2% fall in sales to ZAR19.3bn.

Nonetheless, CEO Peter Matlare said: "Given the difficult environment in which we operated during the 12 months in question, we regard the results as satisfactory."

Matlare said Tiger's milling and baking, grains, beverages, out-of-home and value-added meat products businesses had produced "good" operating performances. However, groceries, snacks and treats and personal care suffered "disappointing" declines in operating income.

The CEO expressed "caution" on the outlook for the next 12 months, particularly in
the first half of the new financial year.

"Consumer spending is likely to remain under pressure in 2011 despite low food inflation and a stronger rand exchange rate," he said.

Click here to view the full earnings release.