TIGER BRANDS LIMITED
Investment Analysis: Tiger Brands Limited (JSE: TBS)
Date: 9 January 2026 Share Price: ~R382.75 (38,275c) Analyst Role: Senior Equity Analyst, JSE
Step 1: Data Gathering & Source Verification
I have reviewed the most recent financial disclosures and SENS announcements, prioritizing the recently released full-year results for the period ended 30 September 2025.
- Annual Results: Reviewed the Audited Group Results for the year ended 30 September 2025 (Released 26 November 2025).
- Trading Statements: Reviewed the Voluntary Trading Update (10 November 2025) and Finalisation Information regarding dividends (6 January 2026).
- SENS Activity (L12M): Key announcements include the declaration of massive Special Dividends (May and November 2025), the disposal of non-core assets (Langeberg & Ashton Foods, HPCB Baby, Chococam), and the reduction in dividend cover policy.
Data Sources:
- Annual Results (Nov 2025):
https://www.tigerbrands-ir-digital.com/reports/2025/Tiger-Brands-AFS-2025/index.php - SENS (Special Dividend Finalisation):
https://www.sharenet.co.za/v3/sens_display.php?tdate=20260106071500&seq=5
Step 2: Metric Extraction
| Metric | Value | Notes |
| --- | --- | --- |
| Market Cap | ~R63.4 Billion | Remains the largest food producer on the JSE by value. |
| Dividend Yield (L12M) | ~14.5% (Total) | Exceptional Cash Return.
⢠Ordinary Yield (~4.3%): 1,644c (Interim 415c + Final 1,229c).
⢠Special Yield (~10.2%): 3,926c (Interim Special 1,216c + Final Special 2,710c).
Note: The massive yield is driven by the disposal of non-core assets and a policy shift to reduce dividend cover to 1.25x. |
| Liquidity Check | Highly Liquid | Average daily volume is robust (~290k shares). No liquidity risk for institutional or retail investors. |
| P/E Ratio | ~17.9x | Premium Rating. Based on FY2025 Continuing HEPS of 2,141 cents. The market has re-rated the stock significantly (up >25% L12M) in anticipation of the turnaround strategy delivering results. |
| Net Asset Value (NAV) | N/A | For a consumer goods company, P/E and EV/EBITDA are more relevant. However, the company is cash-rich (Net Cash R3.2bn) despite the buybacks. |
Step 3: Operational & Strategic Analysis
Business Overview Tiger Brands is South Africa's leading FMCG company, owning heritage brands like Albany, Koo, Jungle Oats, All Gold, and Black Cat.
- Strategic Pivot: Under CEO Tjaart Kruger, the group is aggressively simplifying. It is selling "non-core" assets (Baby Wellbeing, Fruit Canning, Deciduous Fruit) to focus on the "Core" (Grains, Culinary, Home & Personal Care).
Performance Trend
- Earnings: Strong Turnaround. Continuing HEPS jumped 31% to 2,141 cents (FY2025). This was driven by cost savings, not just price hikes.
- Margins: Expanding. Gross margins improved from 29.1% to 31.3%. The "value engineering" initiatives (optimizing recipes/packaging) and factory efficiencies are finally bleeding through to the bottom line. Operating income rose 35% to R3.8 billion.
- Revenue: Muted. Revenue grew only 2.7% to R34.4bn. Volume growth was positive (+3.5%), but price deflation (-0.8%) dampened the top line. This indicates the company is fighting hard for market share by keeping prices low, funded by their cost savings.
- Disposals: The sale of Langeberg & Ashton Foods (LAF) was completed in September 2025. The disposal of Chococam (Cameroon) and the Randfontein Maize business are underway. This shrinks the revenue base but improves the quality of earnings (higher ROCE).
Sector Context
- Input Costs: Soft commodity prices (wheat/maize) deflated in 2025, providing a tailwind for margins, which Tiger reinvested into price to defend volume against competitors like RCL Foods and Premier.
- Listeriosis: The class action remains an overhang, but the settlement offer made in May 2025 suggests a resolution is closer, removing a major uncertainty.
Step 4: The Verdict
Bull Case (Why Buy): The "Cash Cow" Restructuring. You are buying a company that is literally handing cash back to shareholders. The combination of Special Dividends (R4.0bn declared in Nov) and Share Buybacks (R1.5bn executed) creates a massive total return floor. Operationally, the new management team is successfully fixing the "lazy" balance sheet and inefficient factories. Margins are up, volumes are growing in key categories (Bakeries), and the portfolio is leaner.
Bear Case (Why Sell): Growth vs. Shrinkage. The P/E of ~18x is high for a company growing revenue at only 2.7%. Tiger Brands is effectively shrinking to greatnessâselling assets to boost returns. Once the disposals are done and the special dividends stop, you are left with a low-growth, mature food staple business in a low-growth economy. The upside from "fixing" the business is largely priced in at R380+.
Fair Value Estimate: R390.00 - R400.00 The stock is trading near fair value, supported by the massive cash return.
Final Rating: HOLD / ACCUMULATE The aggressive dividend policy makes it a "Must Hold" for income portfolios through the January 2026 ex-dividend date. Long-term growth remains the question mark.