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OPERATIONAL REVIEW |
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Out of home |
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 Ciro Beverage Solutions is the leading retail and food services
supplier of premium ground coffee and beverage service solutions
to the out-of-home consumption market including airports, hotels,
caterers, restaurants and corporates. Sir Juice adds a premium
short-life juice offering to the business unit’s portfolio.
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“The work done this year has put the business into a stronger position to manage the tougher consumer environment expected in 2009.” |
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| Out of home |
2008
Rm |
2007
Rm |
2006
Rm |
2005
Rm |
Change
08 vs 07
% |
| Revenue |
392,7 |
344,9 |
288,1 |
304,4 |
13,9 |
| Operating profit |
42,7 |
53,5 |
42,5 |
58,0 |
(20,1) |
| Operating margin (%) |
10,9 |
15,5 |
14,8 |
19,1 |
(29,7) |
| Capital expenditure |
25,3 |
21,0 |
14,3 |
27,3 |
20,5 |
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Revenue from Ciro Beverage Solutions
(Ciro) was 13,9% higher than last year due
to high volume growth in fresh juice and
hot chocolate volumes as well as price
increases in response to rising input costs,
particularly coffee. Core coffee volumes
were maintained despite increased
competition and tighter consumer
spending in the second half.
The higher proportion of relatively low
margin juice combined with input cost
pressures, particularly in respect of coffee
and fruit prices, resulted in lower gross
margins. In addition, fixed costs rose above
inflation with investment in an improved
sales and technical service capability
that was necessary to sustain Ciro’s
position as the leading beverage solutions
provider. Operating profit decreased from
R53,5 million to R42,7 million.
Ciro has reacted well to the increased
competitive pressures created by a
growing number of regional service
providers, attracted into the category by
a prolonged period of buoyant growth. It
retains strong national service capabilities
and an unmatched range of premium
international and local brands. The work
done this year has put the business into a
stronger position to manage the tougher
consumer environment expected in 2009. |
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