Cape Town - A combination of sustained organic growth and the benefit of recent acquisitions helped Rhodes Food increase profit for the year to September 25 by 70.7 percent to R290 million, the company said on Monday.
The producer of convenience meal solutions in fresh, frozen and long-life product formats said in a statement that turnover had increased by 37.2 percent during the period, from R3 billion to R4.1 billion, and international revenue had been boosted by rand weakness.
Rhodes, whose own brands include Bull Brand, Magpie and Squish, is also a producer of private label product ranges for major local and international retailers.
Regional turnover, which accounted for a slightly larger share this year at 73 percent of the group’s turnover, increased by 43.4 percent. Fresh foods sales increased by 26.5 percent with particularly strong growth in the pie category. Long-life foods increased turnover by 56.7 percent with juice and canned meat the best performing categories.
Sales in sub-Saharan Africa (excluding South Africa) increased by 67.3 percent, with strong performances from juice and canned meat.
International turnover increased by 22.6 percent as the rand depreciated by 17.4 percent in value against the group’s basket of trading currencies over the year. However, the statement added, trading in international markets had been difficult with pricing under pressure in certain regions, including China.
Rhodes said Pacmar, Boland Pulp, Saint Pie and Deemster had been consolidated for the full 12 months, General Mills had been included for 10 months and Alibaba Foods for eight months.
Normalised diluted headline earnings per share increased by 50.8 percent to 126.5 cents, adjusting for listing costs of R21.8 million in the prior period.
A cash dividend of 42.2 cents per share was declared, following the maiden dividend of 24.8 cents for the 2015 financial year.
After the year-end, Rhodes announced its largest acquisitions to date, two KwaZulu-Natal-based companies: Pakco, which produces spices, condiments and instant meals, for R200 million; and pie producer Ma Baker, for R212 million.
The group said completion and integration of the Pakco and Ma Baker acquisitions were a priority for the next financial year.
“The group will seek to capitalise on its strong growth momentum by driving organic growth in the fresh foods and long life segments, grow brand shares, expand its presence in sub-Saharan Africa and maintain its focus on private label ranges produced for major retailers,” the statement added.
AFRICAN NEWS AGENCY