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RCL FOODS – INTERIM RESULTS DECEMBER 2013

Revenue for the interim period ended 31 December 2013 increased to R8.8 billion (R4.5 billion). Operating profit grew to R443 million (R90 million), while profit attributable to equity holders dropped to R13.1 million (R52.4 million). Furthermore, headline earnings per share from continuing operations decreased to 4.8cps (17.3cps).

Dividend
The board has resolved to defer a dividend decision to year-end.

Outlook
The poor state of the South African economy, rising interest rates, mining sector strikes and the significant devaluation of the local currency means a sustainable improvement in consumer spending is unlikely in the near future. The impact of this is pervasive across all RCL Foods” segments. The poultry industry is at crisis point and anti-dumping protection will be key to the survival of the industry. The acquisition of TSB provides a unique opportunity for RCL Foods to diversify across the food industry value chain. The outlook for global sugar, however, remains challenging with the South African market suffering under high levels of imports.

ITAC gazetted the Sugar Industry”s application for an increase in the Dollar based reference price in September 2013 which is expected to be heard in the first quarter of 2014. The trading outlook for Vector is mixed, with solid profit growth coming from the filling of capacity offset by the retail business where Vector”s principals are coming under increased pressure from cheap imports. The Group continues to explore opportunities in strategic growth markets in the food sector in South Africa and sub-Saharan Africa in line with its long-term aspirations.