SOUTH AFRICA – JSE listed leading producer of fresh, frozen and long life food has reported a 16.6% growth in group turnover in interim results for the six months ended 1 April 2018 as it deepens its growth in the sub-Saharan Africa region.
The company said global business was limited as a result of currency volatility and increased costs although international market recorded 3.6% increase in turnover for the period.
Turnover in the regional segment (South Africa and the rest of Africa) increased by 19.5%, with organic growth of 7.6% accounting for 84% of total revenue.
Fresh Foods sales increased by 22.7% with a strong performance from the bakery category driven by product innovation and continued good growth in pies, snacking and ready meals.
Despite of a highly competitive environment, fruit juice performed well leading the Long Life Foods category which posted increased turnover by 17.4%.
Although group’s brands continued to gain market share across core product categories, growth in the rest of Africa has slowed as the impact of the stronger Rand in certain major African markets making the group’s products less price competitive.
The acquisitions of Pakco and Ma Baker made in October 2016 contributed combined turnover of US$16.82 million and although Pakco performed ahead of expectations in its first full year, some initial challenges were experienced at Ma Baker.
The group’s gross profit margin was lower at 25.3% as low international turnover was impacted by the increased costs of canned fruit due to the ongoing drought in the Western Cape.
The group said ongoing focus on efficient working capital management is reflected in the increase in net working capital being contained to 7.2%.
In the first half, the company invested US$21.59 million in capital projects including capacity expansion at the Gauteng pie and bakery facilities, commissioning a new baked bean production facility.
For the rest of the year, Rhodes Food looks forward to driving organic growth, increasing brand shares and extracting benefits from the recent acquisitions.
It plans a further US$9.26 million capital investment in the second half of the year even as the trading conditions are expected to remain constrained over the remainder of the financial year.