Food brands group RFG Holdings expects its interim earnings to rise as much as 23%.
In a trading statement for the six months ended March 31 yesterday, the group said its headline earnings were likely to rise to between 18% and 23% higher than the R216.8 million reported for the prior corresponding period.
Earnings per share were likely to be 83.3 cents, or between 18% to 23% higher, at 98.3c – 102.5c. Headline earnings per share were likely to rise 83.2c, or between 18% to 23% higher, at 98.2c – 102.3c.
It said: “Revenue growth in the regional segment for the period was mainly driven by price inflation in an environment of lower sales volumes in certain product categories due to the weak consumer environment.”
“International revenue declined due to softer global pricing, lower opening stock levels and operational challenges at the Cape Town port, partially offset by foreign exchange gains,” it said.
But despite the pressure on sales volumes, the group had improved its operating profit margin relative to the prior period by driving profitable growth, recovering inflationary increases on raw material and packaging costs and cost savings from operational efficiencies.
The expansion of the regional segment’s operating profit margin was further supported by production efficiency gains from recent capital investment.
In the international segment, the operating profit margin strengthened relative to the prior period due to improved factory efficiencies during the recent deciduous fruit canning season, capital investment at the Tulbagh fruit products factory as well as the weakening of the rand against RFG’s basket of trading currencies, it said.
The share was up 0.15% at R13.42 at 1pm.
BUSINESS REPORT