Revised business plan pays off at RCL
By Marc Hasenfuss - Aug 30th, 13:32
RCL Foods, which owns several leading brands, is expecting a pluckier performance from its struggling poultry business.
Speaking at the release of its results on Tuesday for the year to June 30, RCL finance director Rob Field said efforts to focus the poultry division away from low-margin commodities into quick-service restaurant supply were yielding positive results.
More than half of the company’s poultry volumes were earmarked for the quick-service restaurant industry. RCL was committed to the chicken business, he said. Its poultry operations were substantial in spite of cutbacks, with 24-million chickens at more than 180 farms.
CEO Miles Dally said the chicken business was expected to achieve big improvements in profitability in the year ahead, driven by the revised business model and lower input costs.
Overall, RCL Foods reported static revenue at R25bn, while headline earnings rose 8% to R593m. But cash generated by operations rose 57%, to R2.3bn — underpinning a 33% hike in the final dividend to 20c a share. This means an unchanged dividend payout of 30c a share.
Looking ahead, Dally said economic growth and consumer spending would continue to be lacklustre. "On the positive side, the record maize crop, adequate rainfalls, as well as an improved supply of other crops, should restore margins and contribute to welcome price relief for consumers."
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