Pioneer pointed to growth of cereal brand Weet-Bix

Pioneer pointed to growth of cereal brand Weet-Bix

South Africa's Pioneer Food Group has reported higher underlying annual profits despite "muted" consumer spending in the country.

The company, which sells brands including Weet-Bix cereals and Safari fruit and nuts, booked adjusted headline earnings of ZAR767m (US$86.5m) for the year to the end of September, up 6%. Revenue increased 10% to ZAR18.6bn.

MD André Hanekom, who plans to retire from Pioneer after 24 years with the company, said price increases hit consumer spending. However, he pointed to the "strong" sales of Weet-Bix cereals.

Hanekom said: "The year under review continued to be challenged by muted consumer spend in bread, maize, wheaten products and fruit juices in particular, as price adjustments affected affordability. Breakfast cereals consolidated its market leading position with Weet-Bix achieving strong volume growth at attractive price points."

He added: "Raw material pricing remains volatile and indications are that prices could weaken in the months ahead that should bring some relief to the consumer. Volume growth at acceptable price points will be key together with judicious cost management and dedicated efficiency drives to grow and protect operating margins, as new production capacity comes on stream."

Reported net income was down 17.2% at ZAR603.6m. The result included a ZAR161m charge Pioneer booked on a sale of shares to black shareholders.