Advertise with fastmoving.co.za
 
 

The Remgro-controlled company benefits from cheaper chicken feed and a revised business model.
The Remgro-controlled company benefits from cheaper chicken feed and a revised business model.

RCL stock leaps on earnings update

FMCG SUPPLIER NEWS

By Marc Hasenfuss - Feb 15th 2018, 10:42

RCL Foods, the consumer brands conglomerate that owns poultry producer Rainbow Chickens, delivered a nourishing trading update. 

RCL’s share price initially spiked more than 8% to R18.40 before market enthusiasm tempered to end the trading day 3.47% up at R17.59.

The company, which is controlled by Remgro, pencilled in headline earnings of 69.5c to 79c per share for the six months to end-December.

If once-off items recorded in the corresponding period last year were excluded, RCL’s interim headline earnings would be 29% to 43% higher. RCL indicated that the improvement in the interim results was due largely to an improved performance from the restructured Rainbow Chicken business.

This followed resurgent performances from other JSE-listed poultry groups such as Astral Foods and Quantum Foods. RCL said chicken benefited from substantially lower feed input costs, higher individually quick frozen prices and the positive effect of a revised business model implemented in the second half of the past financial year. The revised poultry business model focused on limiting the production of consequential commodity products.

RCL reported that the Selati sugar business unit’s result was materially down on the matching interim period’s, with imports knocking local market sales volumes.

RCL’s groceries portfolio saw margin and volume gains in grocery and pies brands, which offset volume pressure in the speciality and beverages business units.

Lower commodity input prices helped margins and drove an improved result for the animal-feed division, while milling managed to regain some lost volumes. The baking division was, however, hampered by labour issues.

RCL said results from Vector Logistics would be down after reduced loads from the scaled-down chicken business.

However, the implementation of various cost-saving initiatives had partially mitigated the effect from lower poultry loads.

Opportune Investments CEO Chris Logan said that while expected headline earnings increased markedly due to the rationalised chicken unit benefiting from better conditions, the trading update was a “bit of a mixed bag”.
© BusinessLIVE MMXVIII 

Read more about: trading update | remgro | rcl foods | rcl | producer | poultry

Related News

There's no truth to importers' threats about 'expensive' chicken
05/06/2019 - 08:58
Don't rely on the chicken importers for the facts. In a massive public relations exercise to turn opinion against higher import tariffs, they have relied on assertion, misdirection, misinformation, and bluster. Facts are few and far between.

Pick n Pay shares rise on annual turnover growth of nearly 10%
09/04/2019 - 09:39
Pick n Pay, one of South Africa’s largest supermarket chains rose after the group reported turnover growth of almost 10 percent in the financial year to the end of March, underscoring the resilience of its South African division, which clawed back market share from competitors.

Strike adds to Dis-Chem’s Christmas woes
14/02/2019 - 10:33
Dis-Chem’s Christmas sales have been hurt by a strike, the pharmacy chain warned in a trading update.

Brimstone to review Clover acquisition after boycott threats
08/02/2019 - 09:35
JSE-listed Brimstone said that it is reviewing its participation in a consortium seeking to acquire dairy producer Clover, due to protests over the participation of an Israeli company.

Job cuts loom as Distell shakes up operations
22/01/2019 - 08:56
Distell, owner of brands such as Klipdrift, Savanna, 4th Street and Bain’s, could retrench about 100 employees as part of the restructuring of its supply chain network.