AVI Double-Digit Growth
AVI, a well known consumer goods group, anticipated strong full-year earnings growth, projecting a rise of 21%–25% in headline earnings per share (HEPS) for the year ending June 2024. This projection was driven by successful price increases to offset rising costs, volume growth in its Entyce Beverages division and improvements in production efficiency. Key highlights included a 6.3% rise in group revenue to R6.1 billion and a 9% revenue surge in the Food & Beverages segment. However, AVI highlighted some challenges in its personal care and fishing businesses.
AVI delivered strong performance in the financial year ending June 2024 which is driven by several factors, including effective cost management and price increases across all divisions to counter rising input costs. This led to a 13.5% growth in gross profit, while operating profit surged by 21.7%. Key divisions like Entyce Beverages and Snackworks saw significant top-line growth, with Entyce’s revenue jumping 18.2% to R5.025 billion. AVI also benefited from improvements to its operational efficiency and production capabilities, contributing to the recovery of gross margins to pre-COVID levels. These efforts resulted in HEPS rising by 24.1% to R6.87, within the July estimates.
Overall, AVI's financial results demonstrate company’s ability to adapt to changing market conditions and deliver to its shareholders. The company's strategic approach and focus on improving operational efficiency have positioned it well for continued future growth. AVI’s share price has surged by over 64% since June 2023. The share price is currently trading above the 200-day simple moving average, signalling that the bulls are in charge of the trend. The previous high at R101.50 could signal a potential entry point for joining the trend.
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** This article was prepared by BROKSTOCK analyst Maboko Seabi
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