Despite the continued challenging trading environment, Rhodes Food Group managed to increase turnover in its regional segment (Africa) by 8.2% for the five months ended February 28, the company announced in a trading statement on Wednesday.
Long life revenue grew by 12.7%, with volume growth of 10.2%, with juices, dry foods and the recovering meat category the main growth drivers.
Rhodes noted that its brands have gained or maintained market share across core product categories.
Fresh foods sales increased by 1.4%, while the ready meals and pie categories proved resilient in the current consumer slowdown. “The turnaround in Ma Baker, the KwaZulu-Natal based pie producer, has continued and the business has contributed positively for the five-month period,” the group stated.
Margins were diluted by the impact of low selling price inflation, higher depreciation charges and substantial one-off costs relating to the relocation of the pulps and purees plant from Wellington to Groot Drakenstein, and its subsequent interruption in production.
Meanwhile, the R30-million acquisition of RCL Foods’ protein snack business has been completed, and the business is currently being integrated into RFG’s Western Cape ready meals operation.
INTERNATIONAL
Turnover for the international segment increased by 6.7%, with volume growth of 4.5%.
The segment benefitted from the 7.3% weakening of the rand against the group’s major trading currencies over the five-month period.
Nonetheless, profitability was affected by the drought in the Western Cape and the subsequent impact on the costs and quality of canned deciduous fruit products manufactured in the prior financial year.
This resulted in canned fruit, mainly peaches, being sold at low prices on international markets.
Unrealised gains on the mark-to-market revaluation on forward exchange contracts was about R8-million lower than for the corresponding period in 2018.
Interest payments, primarily related to the funding of the Ma Baker acquisition and the group’s capital investment programme, exceeded those of the prior period by about R6-million.
The group’s interim financial results for the six months ending March 31, will be released on or about May 21.