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Saturday, December 9, 2023

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AVI’s shares leap as its chairman says operating profit for first quarter is ‘pleasing’

AVI chairman Mike Watters.

AVI chairman Mike Watters.

Published Nov 9, 2023


Shares in JSE-listed AVI leapt after its chairman Mike Watters provided an update on trading conditions, saying consolidated operating profit growth for the quarter was pleasing.

The update followed the annual general meeting of the South African food producer and fashion retailer held yesterday morning.

The shares closed 4.32% higher at R74.18 on the JSE yesterday.

"The domestic macro environment has remained challenging. Group revenue for the first quarter ended September 2023 increased by 5.2% over the same period last year,“ he said.

Volume performance across AVI’s categories was mixed in the quarter and impacted by the later phasing of festive season deliveries to certain customers, he said.

I&J's revenue was lower due to poor catch rates impacting sales volumes in international markets and an unfavourable sales mix in the abalone category.

Consolidated gross profit grew ahead of revenue and margins were protected by sound cost control and price increases to offset input cost pressures.

“The group's consolidated operating profit growth for the quarter was pleasing, despite lower I&J profits, with consolidated operating margins expanding in the quarter,” Watters said.

The hake long-term rights allocation was concluded following the completion of the appeals process and final allocations were announced on October 1. I&J's quota remained materially in line with that initially allocated in February 2022 with a final reduction of 5% relative to the rights held prior to commencement of the 2020 fishing rights allocation process, he added.