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RCL interim results December 2014

Revenue from continuing operations shot up to R12.0 billion (R8.7 billion). EBITDA jumped to R1.2 billion (R688.3 million). Operating profit more than doubled to R866.1 million (R443.0 million). Profit attributable to equity holders multiplied to R612.8 million (R13.1 million). In addition, headline earnings per share from continuing operations increased to 70.0 cents per share (4.8 cents per share).



Cash dividend declaration

The directors have resolved to declare an interim gross cash dividend (number 80) of 15.0 cents per share for the six months ended 31 December 2014 (nil).



Prospects

The operational improvements that RCL Foods has implemented across the different businesses over the past year should continue to contribute positively to the earnings performance in an environment where economic conditions remain challenging. The second half of the financial year is a seasonally lower profit period, especially as relates to Rainbow which enjoys its peak trading in December, and TSB which has the three month off crop from January to March.



The weak state of the South African economy and the devaluation of the rand means a sustainable improvement in consumer spending is unlikely in the near future. The lower oil price will temper inflationary pressure and contribute to lower fuel and oil derivative input costs.



The poultry industry”s application for long-term anti-dumping duty protection and the timing of government”s regulation of injection remain as uncertainties.



TSB”s use of irrigation has meant that its production is largely unaffected by the drought that is affecting the balance of the sugar industry. TSB has sufficient irrigation resources for the forthcoming sugar season.



The trading outlook for Vector is largely positive with continued CSD and new customer growth anticipated.



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.