South African consumer goods group Tiger Brands has posted an 8% increase in first-half earnings today (19 May) but forecast “modest” growth in full-year profits.

For the six months ended 31 March, the company achieved headline earnings per share (HEPS) from continuing operations of 607.1 cents. Earnings per share (EPS) from continuing operations increased by 24% to 610.7 cents per share.

Tiger said the profit would have been higher without costs related to a failed ZAR8bn ($926.4m) attempt to buy rival AVI.

The company announced in November 2008 that it wanted to buy AVI in a bid to expand in Africa but scrapped the acquisition attempt a month later citing a deterioration in market conditions opposition by AVI shareholders.

Total group HEPS decreased by 17% to 627.3 cents compared to the same period last year.

Total operating margin from continuing operations of 14.4% compared with 13.8% reflected a recovery from the previous period in which certain raw material cost increases were partially absorbed by the group.

“Although interest rates are expected to decline further, Tiger Brands is likely to continue to experience difficult trading conditions for the remainder of the year, caused by ongoing pressure on consumer spending,” the company said. “In addition, the recent strengthening of the Rand will have an adverse impact on the group’s export earnings.”