Oct 30, 2017 - Rhodes Food Group Holdings Limited. (Incorporated in the Republic of South Africa). Registration number 2
Rhodes Food Group Holdings Limited (Incorporated in the Republic of South Africa) Registration number 2012/074392/06 JSE share code: RFG ISIN: ZAE000191979 (“the group”)
TRADING UPDATE AND UPDATED TRADING STATEMENT FOR THE YEAR ENDED 1 OCTOBER 2017 TRADING UPDATE Group turnover for the financial year ended 1 October 2017 increased by 10.8% over the previous financial year. In the group’s voluntary trading update released on SENS on 5 September 2017 for the 10 months to July 2017, group turnover reflected an increase of 9.9%. Regional segment While trading conditions domestically and in other African markets have remained challenging the group has continued to show good organic growth. Regional turnover increased by 21.4%, with organic growth of 12.7%. The regional performance benefited from the acquisitions of Pakco and Ma Baker which have settled well and have been consolidated for six months in this period. The group has continued to gain market share in key categories and sales in the rest of Africa continue to show good growth. International segment The group’s international business has been adversely affected by the stronger Rand, reduced demand for industrial pulp and puree products, foreign pricing pressure mainly in Asia, and increasing costs on canned fruit as a result of the drought in the Western Cape. The Rand gained approximately 10% against the group’s basket of trading currencies over the year. The full impact of the strengthening currency on the operating margin was limited in the first half by the group’s foreign exchange hedging policy.This could not continue in the second half and margin deteriorated as a consequence of the stronger Rand. Canned fruit export volumes recovered in the second half of the year but were marginally down year-on-year.
Industrial sales of pulp and puree products slowed significantly in the second half of the year due to a major decline in global pricing and reduced demand in key international markets.
International turnover for the 12 months showed a decline of 18.1% (decline of 21.9% after 10 months) over the prior year. Shareholders are advised that the performance of the international business has had a significant adverse effect on the group’s profitability. UPDATED TRADING STATEMENT Further to the trading statement released on SENS on 5 September 2017, the group is now able to provide more specific guidance on the anticipated earnings for the year. Management expects headline earnings for the year to decline by between 17.0% and 22.0% over the restated headline earnings of R293.1million for the prior year. The weighted average number of shares in issue has increased by 24.7 million or 11.2% over the prior year following the issue of shares for the capital raise undertaken by the group in November 2016 and the acquisition of Pakco effective March 2017.
Headline earnings Earnings per share (EPS)**
Year ended 25 Sept 2016 Reported* R293.1m 132.1c
Year ended 1 Oct 2017 Expected range 17% - 22% lower R228.6m – R243.3m 25% - 30% lower 92.5c – 99.1c
Headline earnings per 133.3c 25% - 30% lower 93.3c – 100.0c share (HEPS)** Diluted HEPS** 128.0c 25% - 30% lower 89.6c – 96.0c * IFRS restatement from figures reported in prior period ** Impacted by the increase in the weighted average number of shares in issue The forecast financial information on which this trading update and updated trading statement is based has not been reviewed and reported on by the group’s independent external auditors. The group’s financial results for the year ended September 2017 will be released on the Stock Exchange News Service of the JSE on 21 November 2017. Groot Drakenstein 30 October 2017 Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
