Rhodes Food ups dividend by a third amid boost from weaker rand

Rhodes Food Group, which makes Bull Brand corned meat and Bisto gravies, upped its dividend for the year to end-September by more than a third after a weaker rand helped boost profits.

Group turnover increased by 8.5% to R5.4bn in the group’s year to end-September 29, with group’s operating profit increasing by 24.9% to R392.2m.

Turnover in the regional segment, which includes SA and the rest of Africa, increased by 8.4% and accounted for 80% of total turnover.

Long Life Foods increased turnover by 9.2% amid 4.3% volume growth, with the company reporting good growth in canned meats, fruit juice and dry foods.

International turnover increased by 8.8%, assisted by the 7.7% depreciation of the rand against group’s major trading currencies.

The company declared a cash dividend of 27.9c, 37.4% higher than the previous year, based on the group’s dividend cover policy of three times diluted headline earnings per share (heps).

Management priorities for the year ahead include improving the balance sheet by generating stronger cash flows to reduce debt levels, a continued focus on working capital management and containing costs in the constrained consumer environment, the company said.

The company is planning capital investment of R150m for the 2020 financial year, including R24m for the capitalisation cost of pineapple crops in Eswatini.

Projects include the installation of additional fire prevention equipment in manufacturing plants, equipment replacement in the ready meals factories and equipment upgrades in the fruit products facility in Tulbagh, the statement read.

gernetzkyk@businesslive.co.za