Rhodes Food reports single digit growth in turnover amid challenging environment

SOUTH AFRICA – Rhodes Food Group, a South Africa-based producer of fresh, frozen and long-life convenience meal solutions reported 8.8% growth in turnover for its African operations during the 10 months ended July 2019.

The company, whose brands include Rhodes, Bull Brand, Magpie, Squish, Bisto, Hinds and Pakco supplies customers and consumers across South Africa, Sub-Saharan Africa and in major global markets.

South Africa and rest of Africa segment, which accounts for 81% of the firm’s 2018 turnover, experienced weak macroeconomic and consumer environment.

In comparison to the previous years, this is the first time the segment has reported single digits growth since the group listed in Johannesburg Stock Exchange in 2014.

In 2016 financial year RFG’s regional turnover grew by 43.4%. In 2017 it rose by 21.4% and 2018 by 11.9% indicating a dwindling trend in the turnovers. From 2014-2018 the RFG’s regional compound annual growth rate (CAGR) was 20.2%.

The international turnover of Rhodes Food Group rose 13.4% boosted by a weaker rand depreciating by 9.7% over the period and exports of fruit snacks to the US.

Fresh foods turnover was up by 5.8% while the regional long-life turnover grew 10.8% with 6.4% volume growth during the period.

Good growth was reported in canned meats, fruit juice and dry foods attributed to gaining of market share across core product categories.

 “While the regional business is expected to trade at similar turnover levels in the remaining two months of the financial year, margin expansion is proving challenging in the current macro environment,” RFG said in a trading update.

According to the company’s financial results for the year ended 30^th September 2018, the group turnover increased by 11.2% to R5.1 billion (US$101.2 million), with organic growth of 6.7%.

Turnover in the regional segment (South Africa and sub-Saharan Africa) increased by 11.9% which accounted for 81% of total group revenue.

Fresh Foods sales increased by 10.3% with 4.3% organic growth while Long Life Foods increased turnover by 13.1% with 7.7% organic growth.

International turnover increased by 8.4% with Export volumes increasing by 6.6% for the year.