RCL payout rises on Rainbow
Focus on higher-margin business spurs a recovery in the poultry business that exceeds expectations
Consumer brands conglomerate RCL Foods has reiterated longer-term plans to double the size of its business after its restructured poultry subsidiary Rainbow Chickens returned to a profitable perch in the six months to end December. The dramatic improvement in poultry performance spurred a 50% increase in RCL’s interim payout to 15c a share. However, RCL shares, which have risen about 15% in the last three months, retreated on the JSE. Interim results released on Monday showed the recovery in the poultry business exceeded expectations with a focus on higher-margin business yielding ebitda (earnings before interest, tax, depreciation and amortisation) of R290m compared with a loss of R38m. The poultry segment’s ebitda margin fattened to almost 8%.
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