Ma Baker acquisition a letdown for Rhodes Food Group
RFG blames the pie and pastry supplier for the reduction in its operating margin
Rhodes Food Group’s (RFG’s) acquisition of pie and pastry products supplier Ma Baker two years ago continues to give it indigestion. The owner of Rhodes, Bull Brand, Magpie, Bisto and Hinds brands, bought Ma Baker in October 2016 in a move to strengthen RFG’s position in the pie and pastry market. But Ma Baker, which was founded in 1987 in Pietermaritzburg and sells its products to major retailers and convenient stores, has so far been a liability. On Tuesday, RFG partly blamed the reduction in SA and sub-saharan Africa’s operating margin in the year to September on Ma Baker’s underperformance.
The region’s operating margin — which measures the company’s profitability after accounting for all costs — fell to 7.8% from 9.7%. The group’s gross profit margin was lower at 24.9% from 27.0% previously. This was mainly due to deflation in the international business, weak industrial pulp prices, inability to pass on cost increases to consumers and lower margins in the Ma Baker busines...
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