South Africa-based Rhodes Food Group today (23 May) reported growth of 15.9% in headline earnings to ZAR126m (US$9.5m) for the six months to the end of March on increased sales.
Operating profit was up 11.8% to ZAR208m. Profit after tax increased 14.6% to ZAR125m.
The condiments-to-canned pineapple firm said group turnover was up 8.2% to ZAR2.2bn compared to the year-ago period through sustained organic growth in its regional business.
Sales were boosted by a 27.8% increase in the group’s fresh foods division “with excellent growth in pies and snacking”. Rhodes’ long-life foods business increased sales by 12.3% over the year-ago period, “despite the tougher trading environment domestically and in other African markets”.
Regional turnover, which included South Africa and the rest of Africa, increased by 17.9% over the period and accounted for 82% of group turnover. However, international turnover fell 20.7%, as the rand appreciated by 11% against the group’s basket of trading currencies over the period.
The group said its two largest acquisitions, of local spices and condiments business Pakco and KwaZulu-Natal based pie producer Ma Baker, were “completed late in the reporting period, and had been consolidated, but had no impact on the profit” for the period.
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On the outlook for the remainder of the financial year, CEO Bruce Henderson said: “Our focus in the international segment is on growing sales to reverse the slower volume growth in the first half, while the volatile rand exchange rate continues to be a risk to our performance.”
The group also plans capital investment of ZAR220m in the second-half of 2017, including the upgrading of production facilities at Pakco and Ma Baker.