JOHANNESBURG - Food company Rhodes said on Tuesday its turnover for the six months ended April 1 increased by 16.6 percent to R2.5 billion, with organic growth of 6.9 percent.
Rhodes Food Group, which produces fresh, frozen and long life convenience food across South Africa, sub-Saharan Africa and in major global markets, however said its diluted headline earnings per share fell 38.9 percent to 31.4 cents.
"The group's gross profit margin was lower at 25.3 percent (2017: 27.1 percent) owing mainly to increased costs and the adverse currency impact in the international business," it said. "The regional gross profit margin was impacted negatively by lower margins in the Ma Baker business."
The group's brands include Rhodes, Bull Brand, Magpie, Squish, Bisto, Hinds and Pakco.
It said the acquisitions of Pakco and Ma Baker, which were not included in the comparable prior period, contributed combined turnover of R209 million.
Pakco had performed ahead of expectations in its first full year in the group while some initial challenges were experienced at Ma Baker, although these
had been addressed.
Rhodes said it planned a further R115 million capital investment in the second half of the year.
It said the international business should benefit in the second half from the sale of lower cost-based industrial products from the 2018 season coming onto the market as well as a small uplift in foreign selling prices of canned fruit and continued improvement in volumes.
However, the operating margin for the international segment would remain low and a strengthening rand currency remained a risk to performance.
"Trading conditions are expected to remain constrained over the remainder of the financial year," it said.
"While the improving consumer confidence in the country is positive for growth, it is too early to expect any marked improvement in the regional trading environment."