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CORRECTED-UPDATE 1-S.Africa's Tiger Brands eyes $32 mln cost savings, declares special dividend

(Corrects to show jobs already cut, paragraph 1)

JOHANNESBURG, Nov 20 (Reuters) - Tiger Brands, South Africa’s biggest food producer, is targeting cost savings of 500 million rand ($32 million) in the 2021 financial year and has cut 400 jobs, CEO Noel Doyle said on Friday.

Doyle told reporters on a call that a lot of the savings are coming from improved efficiency in factories and also expects to see savings in utility costs, negotiating better terms with suppliers and from alternative sourcing.

“We’ve taken some direct costs and some people out of the head office as well,” he added.

The owner of popular food brands Jungle Oats and Tastic rice has also concluded a sale agreement for eight personal care brands, including its Gill shampoo and Lemon Lite facial cream brands, Doyle said.

“As we intend to focus our investment behind some core brands, we have to look at whether or not we’re the best owners for some of those smaller brands,” he added.

Tiger Brands said headline earnings per share (HEPS) from continuing operations fell by 23% in the year ended Sept. 30.

The maker of Albany bread said it will pay out a final dividend of 537 cents per share for the year and top it with a special dividend of 133 cents per share as a result of the one-off proceeds received from the disposal of its processed meat business.

Total revenue from continuing operations rose by 4% to 29.8 billion rand as performance in the second half improved, driven by sustained demand for wheat, bread, oat-based breakfast foods, pasta and groceries, primarily due to increased at-home consumption during the coronavirus-induced lockdown.

A decline in volumes in certain categories, coupled with raw material costs, however, placed gross margins under pressure and resulted in group operating income declining by 18%.

$1 = 15.4427 rand Reporting by Nqobile Dludla; editing by Muralikumar Anantharaman and Jason Neely

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