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Pioneer earnings rise, sees modest growth in 2010

South Africa's Pioneer Foods Group posted a 22% increase in full-year headline earnings per share (EPS) boosted by a strong performance in its Sasko bread division and higher margins.

The firm, which produces Sasko bread, Weetbix breakfast cereal and Liquifruit juices, said headline earnings per ordinary share in the year to end-September stood at 355 cents.

Revenue rose 9% to 16.3 billion rand ($2.16 billion), while operating profit, before items of a capital nature, rose 34% to 1.2 billion rand.

“Our earnings growth for the year, though relatively strong, basically brings us back to even keel, after the slow or declining growth we showed in recent reporting periods,” managing director Andre Hanekom said.

The company declared a dividend of 89 cents per share, 35% higher than last year's 66 cents per share.

Pioneer said increased sales volumes in its maize products had boosted margin growth, with lower commodity prices reducing its investment in inventory and debtors.

“The lower debt levels on average decreased finance charges which provided an additional impetus to earnings,” Hanekom said.

The group, which debuted on the Johannesburg Stock Exchange last April, said it expected operating profit in the next reporting period to be influenced by volatile raw material prices, deflationary pressures on selling prices and cost increases in wages, electricity and transport.

“We expect modest earnings growth in the first half of the current financial year...,” Hanekom said. (Reuters)