JSE-listed Pioneer Foods reports that trading conditions for the three months ended December 31, 2014, remained challenging within an ever-increasing competitive landscape; however, select categories within the company reflected an uptick in consumer demand. 

“Pioneer Foods managed to increase market share in most categories it competes in.  Of significance [however] is price deflation in a few categories, most notably maize, which, as a consequence, constrained revenue growth,” noted the company.

Regardless, group revenue for the three months was up 7%.

“Volume growth realised in major categories was pleasing, with the exception of the wheat and rice categories. The international business achieved fair beverage volume growth in Africa and positive leverage [but] dried fruit performance was somewhat constrained owing to competitive global pricing,” Pioneer commented.

For the period under review, volume was up 13% in the bread category, which increased 19% in revenue, maize rose by 9% in volume and 1% in revenue and wheat – the only category to experience a decline in volume – recorded a 3% drop, but increased revenue by 3%. Further, rice saw an increase in both volume and revenue of 2% and 3%, respectively, while breakfast cereals soared by 21% in both volume and revenue. Local juices were up by 8% in volume and 13% in revenue, with the international category experiencing growth of 2% in volume and 12% in revenue.

The company explained that positive operating leverage had been generated during the quarter, given sustained progress with regard to cost and efficiency improvements. This was notwithstanding the “disruptive and costly impact” of State-owned utility Eskom’s power supply volatility.       

Pioneer Foods expected to report an improved adjusted operating profit and adjusted headline earnings for the six months ending March 31; both adjusted for the impact of the Phase 1 broad-based black economic-empowerment deal on the back of the company’s share price movement.

The company said it would provide a further update with an indicative range “to the extent necessary”.

CHANGE TO BOARD

Pioneer Foods also on Friday announced that group CFO and FD Leon Cronje would step down on March 1 and remain on the executive committee of the company until the end of his contractual period in December 2015, retaining other existing responsibilities. 

The board thanked Cronje for his invaluable contribution to Pioneer Foods over the last 27 years as an employee and, especially, during the last 16 years as Pioneer Foods FD. 

Cindy Hess, who had been the CFO designate since March 1, 2014, had now been appointed FD and group CFO, effective March 1.