Falling sales and profits from food and drink has weighed on annual profits at South African conglomerate AVI.

The company yesterday (6 September) booked a 7.8% drop in net profit to ZAR468.2m (US$64.3m) for the year to the end of June.

AVI, which sells clothing and footwear alongside food brands like I&J frozen seafood and Bakers biscuits, said operating profit before capital items from its food and beverage division was down 4.1% during the year to ZAR695.4m.

The group’s Snackworks unit, which includes its biscuits business, saw operating profit rise 20.9%. However, its chilled and frozen convenience division saw profits fall 53.9% on the back of a reduction in catch size.

The company’s group operating profit before capital items stood at ZAR941m, up 3.6%.

Revenue from continuing operations from AVI’s food and beverage business dipped 0.2% to ZAR6.04bn despite a “stronger” second half from Snackworks, the company said. AVI’s group revenue was up 2.3% at ZAR7.63bn.

The company’s headline earnings per share, a much-analysed financial metric for South African companies, was up 6.4% at ZAR183.6, leading the company to pay out a special dividend of ZAR0.75.

“In view of AVI’s current low gearing and ongoing strong cash generation the board has proposed a specific payment to shareholders out of share premium of 75 cents per share for approval at the annual general meeting in October,” AVI said.