AVI rise in earnings ‘aided by good fortune’ and coffee

STRONG consumer demand for fashion brand Spitz and a little assistance from the competition in the coffee and creamer categories boosted AVI’s revenue in the six months to December, the company said yesterday.

AVI, which owns brands such as Five Roses, Bakers, Ellis Brown, Frisco and Willards, said coffee volumes were 14,3% higher, while creamer volumes were up 22,9% partly due to competitor supply problems. CEO Simon Crutchley said the company had been "aided by good fortune".

AVI attributed the higher revenue in the footwear and apparel category to the strong rand and an improved sales mix. "Footwear sales volumes increased 26% with the core Carvela, Lacoste, Kurt Geiger and Tosoni brands all performing well," the company said.

In the personal care category, Indigo’s revenue grew 12,3% to R470,3m the company said. SA Stock Brokers’ Ron Klipin said the top end of the market had been more resilient than the lower end. "Spitz being the aspirational brand has got the business model right, where it is all about brands, brands, brands.

"Consumer spending has not shot the lights out but the company has delivered a solid set of results. Both prices and volumes have been good," he said. The company said tea volumes were slightly lower than last year due to vigorous competition, but this was offset by higher prices realised. "Biscuit prices were increased in August which resulted in lower sales volumes in the first half," it said.

I&J’s revenue was hit hard by the stronger rand, but volumes were in line with the first half of last year, with an improved sales mix and slightly better export prices in foreign currencies, the company said. "The hake quota for the 2011 calendar year is up 10% which will give I&J extra volume opportunity in the second half of the financial year."

Mr Crutchley said the company had not seen a fundamental shift in consumer spending over the past two months. I&J’s results in the second half will remain depressed should weak prices for seafood products and the strong rand continue to prevail.