TIGER BRANDS LIMITED
"Tiger Brands", or "the Company"
(Incorporated in the Republic of South Africa)
(Registration number 1944/017881/06)
Share code: TBS
ISIN: ZAE000071080

TRADING

The economic environment in which the Company has been operating continues to be challenging. Whilst the South African economy has moved into a recovery phase, consumer spending continues to be impacted by low levels of job creation and a shrinking labour market. Although the current low interest rate environment has brought some relief to the consumer, the tight economic conditions continue to exert pressure on consumer expenditure, particularly in the non-durable sector.

At a trading level, the Company’s rice, groceries, beverages and home & personal care categories have achieved good volume growth for the current financial year to date. This is consistent with the improved performances recorded in the last quarter of the previous financial year. However, the Company’s overall sales volume growth has been constrained, with volumes being under pressure primarily in the maize and wheat categories.

Flour volumes, in particular, have softened as a result of the highly competitive trading environment. Core volume growth in the snacks & treats category has been subdued, although sales have benefited from recent new product introductions.

The trading environment is expected to improve in the second half, but group operating margins are likely to remain under pressure.

Reduced operating debt levels and continuing low interest rates are expected to impact positively on the results for 2011.

Expansion into rest of Africa

Good progress has been made with regard to the finalisation of the three acquisitions which were announced in November 2010. It is expected that these acquisitions will be brought to account by Tiger Brands during the course of the current financial year.

Consistent with Tiger Brands’ growth strategy for the rest of the African Continent, shareholders are advised that Tiger Brands has concluded an agreement to acquire the entire issued share capital of Davita Trading (Proprietary) Limited, a South African company engaged in the export of powdered seasonings and beverage products to customers primarily on the African Continent. This acquisition will further increase the Company’s footprint on the Continent.

Full details of this acquisition, including pro-forma financial effects, are included in a separate announcement being released on SENS simultaneously with this trading update.

Bryanston
Date: 15 February 2011

Transactional Sponsor:
JP Morgan Equities Limited