UPDATE 2-S.Africa's Tiger Brands to launch venture capital fund, resumes H1 dividend

* Fund will launch in June

* Initial capital allocation less than $7 mln- CEO

* H1 HEPS up 21% on strong Q1

* Resumes interim dividend of 320 cents a share (Recasts with venture capital fund)

JOHANNESBURG, May 20 (Reuters) - South Africa’s Tiger Brands will launch a venture capital fund to invest in food and beverage start-ups, its chief executive said on Thursday after the food producer reported a 21% rise in half-year profit and resumed interim dividends.

The fund, to be launched in June, will focus mostly on South Africa, Noel Doyle told analysts, with an initial capital allocation of less than 100 million rand ($7 million). He did not give a longer-term target for the size of the fund.

“It aims to give food and beverage start-ups the much needed capital they require and also accelerate Tiger Brands’ involvement in emerging and existing consumer trends such as health and nutrition, plant based foods, convenience ...,” investor relations officer Nikki Catrakilis-Wagner added.

The fund will also invest in technology sectors that are linked to areas which Tiger Brands operates in, Doyle said.

The company declared an interim dividend of 320 cents a share, after scrapping one last year due to the uncertainty around COVID-19 lockdowns.

Headline earnings per share - the main profit measure - from continuing operations rose to 741 cents in the six months to March 31 compared with 613 cents a year earlier. The strong result was helped by strong revenue growth in the first quarter.

The owner of popular brands such as Jungle Oats, Albany bread and Tastic rice said revenue increased by 8% to 16.4 billion rand. This was offset slightly by an overall volume decline of 1%.

The group was unable to fully recover the high level of agricultural commodity costs, placing “naked” margins under pressure. Naked margin is the difference between selling price and the raw material cost.

However, a steady improvement in manufacturing efficiencies resulted in the gross margin for the group remaining flat at 30.6%.

$1 = 14.0556 rand Reporting by Nqobile Dludla; Editing by Jan Harvey and Emelia Sithole-Matarise