RCL final results June 2018
Revenue decreased to R24.4 billion (R25.0 billion). Operating profit increased to R1.3 billion (R776.5 million). Profit attributable to equity holders was higher at R922.4 million (R515.7 million). Furthermore, headline earnings per share came in at 96.8 cents per share (63.5 cents per share).
The directors have resolved to declare a final gross cash dividend (number 87) of 25.0 cents per share bringing the total dividend declared for the year ended June 2018 to 40.0 cents (2017: 30.0 cents).
Whilst we are expecting the recent modest recovery in market volumes to continue, we acknowledge that trading conditions will continue to be challenging and the fight for market share will remain fierce. The Consumer division will continue to drive its groceries brands and keep the momentum in market share growth through strong innovation and brand investment. Speciality is expected to become a smaller but more sustainable business. The revised Chicken model has delivered per expectation and substantial focus will be centred around restoring consumer confidence in the Rainbow brand following the Listeriosis challenge.
Government have responded to industry concerns in the local sugar market by implementing a revised Dollar-Based Reference Price, a component of the existing tariff. The positive impact of the tariff will only become evident once the excessive import stocks that have built up prior to the increased tariff being implemented have been sold through the market and the supply/demand balance restored in the local market. The Sugar business unit will continue to focus on ways to reduce costs as well as investigate alternative applications to ensure the business” long-term sustainability. We expect volume recovery at Milling to continue and for initiatives implemented at Baking to start bearing fruit. Logistics will continue to seek new business and reduce costs. The various innovations in the business are positioning it favourably to recover from the volumes lost through Chicken”s restructure.
Our transformation into “ONE RCL FOODS” and the shared vision and commitment it has brought across all our businesses, has presented a host of synergies and opportunities that have exceeded our expectations. It has given us a solid platform from which to create value on our journey to building a food business with brands that matter.