AVI, the South African consumer goods group, has reported an 18% rise in first-quarter revenue but admitted that commodity costs are squeezing margins.
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The company, which owns a range of food, beverage and fashion brands, was cautious in its outlook despite the rise in sales during the three months to the end of September.
“Revenue gains were supported by higher selling prices in response to rising input costs and reasonable volume gains in most categories,” AVI chairman Angus Band told the company’s AGM yesterday (15 October).
However, he added: “In general gross margins remain under pressure at current commodity prices and exchange rates. The outlook for the first half of financial year is dependent on the continuity of the volume growth experienced in the first quarter and in particular consumer demand over the festive season.”
Last month, AVI posted annual turnover of ZAR6.66bn (US$650.5m) for the 12 months to 30 June, a rise of 14% on the year. Net profit stood at ZAR489.7m – an increase of 1%.
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By GlobalDataThe company’s food and beverage brands – which account for around 80% of turnover – include Bakers biscuits, I&J seafood and Denny mushrooms.
