SA firm ups stake in Natfoods

percent last week after buying an additional 11,7 percent stake in a special bargain.
The SA firm bought the stake from Innscor Africa Limited, which held 49,4 percent of Natfoods before the deal.

Other significant shareholders include the National Foods Workers Trust which holds a 9,85 percent stake.
Tiger Brands raised its stake in Natfoods after the US$11,9 million bargain deal likely to bring huge financial and operational benefits to the company.
A source within NatFoods said the deal had a number of benefits to the company.
“The deal will benefit us immensely in terms of technology, our efficiencies, capacity utilisation and certainly recapitalisation,” said the source.

Imara Edwards Securities brokered the special bargain, which saw about eight million shares changing hands at a premium price of US146 cents.
The acquisition is a stamp of approval in the operations of Natfoods and the economy in general.

Going forward, Natfoods will continue to benefit from its strong association with Innscor Africa and Tiger Brands.
After seeing a significant drop in profitability in the financial year to June 2010, NatFoods released financial results for the year ended 30 June 2011 showing a significant recovery.

Group revenues rose 25,1 percent to US$201 million, on the back of a 17,1 percent increase in-group volumes.
In the financial year to June 2011 Natfood’s gross profit grew at 15 percent leading to a 2 percent decline in gross profit margins to 22,4 percent.
The restructuring of the milling firm is expected to result in at least a 5,6 percent reduction in operating costs in the next year, with Earnings Before Interest Tax Depreciation Amortisation margins rising to 4.8 percent.

An extensive distribution network of 22 depots allows NatFoods higher penetration into the more remote areas of the country and facilitates the delivery of products into such areas at lower costs.
In addition, NatFoods carries significant brand equity, with strong brands including Gloria, Red Seal and NF Stock Feeds, among many others.

The milling company is the biggest in the country, wit a capacity to mill 600 000 metric tons of corn annually, 264 000 tonnes of wheat flour and processes 480 000 tonnes of stock feeds, according to IH Securities Private Limited, a leading local equity research firm.