Fascinating graph from Tiger Brands

Earlier today, Fast Moving Consumable Goods (FMCG) group Tiger Brands released interim results for the six months to the end of March 2013. Tiger Brands is often an excellent proxy for the South African consumer as food is one of the basic needs according to the Maslow hierarchy.

The interim results were solid, if somewhat unspectacular:

  • Headline earnings per share up 4% to 818c,  after inclusion of Dangote Flour Mills
  • Earnings per share up 2.3% to 824c
  • Interim dividend at 310c up 5.1%
  • R289m invested in capital projects

We just received an incredible statistic from Byron Lotter at Vestact:

If you had gone to sleep in 1998 with 4 Tiger shares worth R20 apiece, you could have returned today to see your value worth nearly R500 and [remembering that they spun off a number of assets they held] you would be owning 4 Adcock shares, 4 Tiger shares, 4 Spar shares and 1 Astral share. You would also have received nearly R119 worth of dividends.

Dividends really are an amazing thing.

However the graph below (Courtesy of Tiger Brands and the Bureau of Economic Research) is the one that captured the attention of the Finweek team. Basically what you are looking at is a rise in employment (that’s a good thing) but a decline in disposable income (that’s bad).

What you can take away from this data is that the SA consumer is still taking strain and remains vulnerable despite more people being employed. It will be fascinating to see what this graph looks like in 6 months time, especially if we can see consumer strain coming through from JSE-listed micro-lenders right now:

TigerBrands1

 

On the subject of disposable income, there was this interesting update from the Investec Economics Unit. Debt is still on the way up but debt as a percentage of disposable income has dropped slightly.

DisposableInc

 

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