Rainbow interim results September 04
Rainbow reported increased revenue of R1.978bn (R1.822bn) for the six months ended 30 September 04. Attributable profit for the period increased to R90.4m (R67.9m), while headline earnings per share improved from 25.3cps in the previous comparable period to 30.2cps. The board declared an interim dividend of 9.5cps.
Macro economic conditions are expected to remain positive over the next six months and the increased consumer spending trends should continue over the festive season, the group’s highest revenue months. However, the continued soft maize prices will result in lower increases in realisations going forward and the group does not expect the chicken operation to continue growing revenue at the same rate in the second six months of the financial year. The proposed Vector acquisition, the finalisation of which is imminent, offers the group further opportunities to influence its route to market, and is expected to make a positive contribution to earnings. Vector will continue to partner with its existing principals to enhance their route to market initiatives. The new relationship between Rainbow and Vector will create a range of opportunities to streamline the group’s supply chain and deliver a more efficient interface with customers. The group will continue to invest in its consumer-focused strategy, the benefits of which will only be delivered in the longer-term. As reported in the 2004 annual report, the full year earnings growth rate is not expected to be at the same pace as that achieved in recent years or that achieved during this six-month period.