RCL final results June 2017
Revenue decreased marginally by 0.3% to R24.9 billion (R25.0 billion). Operating profit increased to R776.5 million (R317.2 million). Profit attributable to equity holders was higher at R515.7 million (R182 million). Furthermore, headline earnings per share came in at 63.5 cents per share (96.5 cents per share).
The directors have resolved to declare a final gross cash dividend (number 85) of 20 cents per share bringing the total dividend declared for the year ended June 2017 to 30 cents per share (2016: 30cents).
RCL believe that economic growth will continue to be lacklustre in the coming year, which implies that demand will remain constrained, with flat to declining volumes. On the positive side, the record maize crop, as well as improved supply of other crops should help to restore margins and contribute to welcome price relief for consumers. The Chicken business unit is expected to achieve significant improvements in profitability relative to the past financial year, due to the revised business model as well as lower input costs. Production volumes in Sugar should improve on the back of renewed irrigation, although the increasing trend in sugar imports and its impact on local sugar prices remains a major concern and places Sugar”s 2018 performance at risk. Groceries has a good pipeline of innovations. A strong focus will also be placed on capitalising on opportunities that will become available as a result of the new plant and equipment coming into operation at the UHT and pet food plants.
Logistics will focus on operationalising the recent contract wins, pursuing further opportunities to replace the business that was lost through Chicken”s restructuring, and the implementation of a number of cost containment initiatives. In addition, the Logistics division will look to capitalise on its new brand positioning launched in June 2017, which reflects a spirit of innovation and a desire to “go beyond” simply logistics and supply chain. Further internal opportunities in synergies, overhead savings and production efficiencies that flow from our “ONE RCL FOODS” initiatives will continue to receive substantial focus. The outcome of the chicken industry”s crisis remains uncertain, but substantial work has been done between government and industry to find a sustainable solution. RCL remain confident in our strategy and are making steady progress towards our goal of a diversified food portfolio, focused on adding higher margin, added value products and categories.