AVI Limited

Group revenue grew 1% year over year, mainly from selling-price increases; gross profit grew ahead of sales and gross margin improved to 42.7%. Operating profit increased 7.8% to just under ZAR 3.6 billion, with operating margin improving to 22.2%. Headline earnings rose 6.4% to ZAR 2.4 billion and headline earnings per share increased 6.1%; the final dividend was ZAR 4.06, taking the full-year dividend to ZAR 6.26 per share, up 6.1%. Cash generated by operations improved 5.5% and cash-to-EBITDA was 96.1%; net debt increased from ZAR 1.4 billion to ZAR 2.3 billion, or 29.7% of capital employed. For FY26, management pointed to a more benign input-cost backdrop, anticipated annualized restructuring benefit of ZAR 76 million, continued capex discipline after the ZAR 170 million freezer-vessel investment, and no formal profit forecast was given.

Simon Crutchley framed the year as a sound performance from a difficult base, emphasizing that AVI is protecting gross margin over the long term and investing in innovation, automation, and manufacturing flexibility. He repeatedly stressed that the company is playing the “long game,” with consumer value, service levels, and operational efficiency at the center of the strategy. His tone was confident but realistic, highlighting a tough South African demand environment, infrastructure constraints, and the need to remain highly disciplined on capital and cost.

Justin O’Meara focused on the financial bridge: revenue up 1%, gross margin at 42.7%, selling and administrative expenses down 1%, and operating profit up 7.8% to just under ZAR 3.6 billion. He said restructuring initiatives across Snackworks, Indigo, Spitz, and shared services cost ZAR 42 million, with ZAR 17 million of savings already banked and ZAR 76 million expected on an annualized basis next year. He also highlighted strong cash generation, net debt rising to ZAR 2.3 billion after the special dividend, ROCE at 34.9%, and capex including about ZAR 170 million for the second-hand freezer vessel plus ZAR 41 million for municipal infrastructure resilience.

Analysts pressed on whether Entyce’s outsized profit contribution was sustainable, and management said AVI is not built around expecting each category to repeat the same outcome every year; instead, it aims to take advantage of whichever businesses perform well in a given cycle. Questions on tea, pricing, and consumer stress drew a response that AVI will keep managing price/value carefully and avoid damaging long-term gross margins, while acknowledging competition is intense and category dynamics differ by segment. On I&J, management said improved catch rates could create meaningful operating leverage this year, while on Green Cross they said the closure was driven by poor economics in a squeezed middle-market retail position and did not imply major job losses because many employees were redeployed.