View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
June 9, 2020

South Africa’s RCL Foods issues Covid-19 profit warning

South Africa's RCL Foods has issued an update on its outlook for profits amid the impact of the coronavirus outbreak in the country.

By Dean Best

South Africa-based RCL Foods has issued a profit warning related to the coronavirus outbreak and the subsequent lockdowns and suspension of its foodservice operations.

Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

The publicly-listed branded and private-label food supplier said headline earnings per share (HEPS) for the year through June are expected to be 30% lower than last year, when it booked an end result of 37.9 cents based on revenues of ZAR25.9bn (US$1.5bn).

Final numbers will be presented around 31 August.

“The Covid-19 pandemic and the nationwide lockdown implemented by the South African government has had a significant impact on the group’s results,” according to a filing with the Johannesburg stock exchange. “The chicken and Vector operations have been most affected due to the shutdown of the quick-service restaurant industry.”

RCL also noted the negative impact from the downgrade to South Africa’s credit rating by Moody’s and Fitch Ratings earlier in the year, which will “necessitate an evaluation of the carrying values of the group’s assets for possible impairments”.

However, the company said it is “well capitalised and is managing liquidity as a priority during the pandemic”, which has also hit consumer spending. 

RCL manufactures a range of food products such as the Nola brand of mayonnaise, Yum Yum peanut butter, Sunbake bakery items and chicken products under the Rainbow line.

At 37.9 cents last year, HEPS was down 60.8% while revenues climbed 5.5%. EBITDA was up 25% at ZAR1.5bn.  

Related Companies

Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. A weekly roundup of the latest news and analysis, sent every Friday. The industry's most comprehensive news and information delivered every other month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Food