Tiger Brands Ltd. shares jumped the most in 25 years after South Africa’s biggest food producer by market value replaced its chief executive officer with an ex-leader of local rival Premier Foods Ltd.
(Bloomberg) — Tiger Brands Ltd. shares jumped the most in 25 years after South Africa’s biggest food producer by market value replaced its chief executive officer with an ex-leader of local rival Premier Foods Ltd.
Tjaart Kruger will take over from Noel Doyle starting Nov. 1, Tiger Brands said in a statement on Friday. Kruger, whose other previous roles include a stint as a divisional head at Tiger that ended in 2007, has been appointed on a 26-month contract. The shares surged as much as 19%, the most since August 1998.
“Following the board’s annual review of the company’s strategy, the board concluded that new leadership was required to respond to the challenges currently facing the company,” Johannesburg-based Tiger Brands said.
Doyle — a 20-year veteran at the company — has overseen several mishaps at Tiger Brands since he took over in February 2020. That included the recall of 20 million cans of food, opposition to plans to shut its fruit-canning unit in the Western Cape, and a recall of baby-powder products that were suspected to be tainted by asbestos. That was after the company was hit by a deadly outbreak of listeriosis in 2018.
Tiger Brands was trading 15.6% higher at 171.23 rand per share by 1:33 p.m. in Johannesburg.
“The rise in the share price today is likely a market response to Tiger Brands deciding to finally make some changes to its strategy,” Keenen du Toit, an analyst at Afrifocus Securities Ltd., said in an emailed response to questions.
“We could see some changes in strategy and possibly Tiger Brands starts to sacrifice some of its margin to gain back market share and volumes,” Du Toit said. “We are in a market where low costs and high volumes are needed.”
The owner of brands such as Golden Cloud flour and Beacon confectionery said its group operating income for the 12 months through Sept. 30 will be lower than the previous year as it struggled to fully recover higher input costs.
“This, together with the year-on-year impact of incremental retrenchment costs of approximately 100 million rand ($5.2 million) proved too significant to be offset by the group’s cost reduction initiatives,” Tiger Brands said.
–With assistance from Khuleko Siwele and Janice Kew.
(Updates share move in second paragraph and adds price and analyst’s comment from fifth.)
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