RCL expects 75% increase in full-year earnings

RCL Foods expects to report a 75% increase in headline earnings per share, driven largely by Rainbow and its groceries business.

It expects headline earnings per share from total operations for the year ending June to be at least 75% higher than the reported HEPS of 68.3c a year ago, RCL said in a statement on Monday.

Within the value-added business division, groceries results improved mainly due to the restoration of pet food volumes after load-shedding induced service level challenges in the prior period, combined with improved margins.

Baking remains under pressure due largely to the performance of the bread, buns and rolls unit, which continues to operate in a highly competitive trading environment leading to volume and margin pressure.

Sugar continued to deliver a strong operational performance, benefiting too from high international prices.

RCL’s brands include 5 Star maize meal, Ouma Rusks and Bobtail dog food.

Rainbow, which RCL is in the process of unbundling and listing separately on the JSE, expects Ebitda performance of the underlying business in the second half to be broadly in line with performance for the six months to December 2023.

Seasonality, and the December festive season in particular, typically results in stronger trading in the first half of the financial year. Several factors affected Rainbow’s financial performance in the second half including benefits from cost control measures, an increase in retail and wholesale volumes, lower input costs, and the containment of the Avian flu outbreak.

It expects to release its annual results on September 2.

mackenziej@arena.africa