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Rainbow results for the 12 months ended Mar 01

The group reported a year of no growth and continued changes in consumer spending. Relief from unfairly priced import dumping in Jul 00 was granted (for a five year period) the benefits of which would however only be felt in the 2002 year. On a more positive note, the group”s restructuring initiatives resulted in key performance indicators and production costs being achieved. Revenue rose 8.6% to R2.4bn, operating income was R110.7m (R52.0m) and attributable earnings R93.8m (R21.5m). Headline earnings rose from 5.4 cps in 2000 to 44.2 cps in the 2001 year. The cash outlay on capital expenditure during the period was R34.8m of which R 15.6m was spent on plant to support KFC product requirements. Rainbow formed a strategic international alliance and secured the right to breed and sell Cobb chicken parent stock in the country. An amount of R21m was also committed t its breeding operation. Strong trading and the funding of debt through trade payables resulted in a net cash position of R6.2m as opposed to the R126m requirement of the prior period. It was anticipated that funding during the first half of the year would peak at R100m — which would be covered by short-term unsecured facilities. Marginally higher returns are forecast for the next six months as a result of higher price realisation. It was thought however that this would be offset by higher feed costs and that improved production costs and efficiencies were necessary in order to “sustain itself”.