SENS Headlines
Reviewed condensed consolidated interim results
for the six months ended 27 March 2016
Rhodes Food Group Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 2012/074392/06
JSE share code: RFG
ISIN: ZAE000191979
Reviewed condensed consolidated interim results
for the six months ended 27 March 2016
Key financial indicators
Turnover + 53.5% to R2 billion
Gross profit margin + 60 bps to 28.2%
Profit after tax + 89.2% to R110 million
Diluted HEPS + 87.2% to 48.1 cps
Normalised HEPS + 36.9% to 50.1 cps
COMMENTARY
Profile
Rhodes Food Group Holdings is a leading producer of convenience meal solutions in fresh, frozen and long life product
formats, catering for all consumer income groups. The Group's growing portfolio of market-leading brands includes
Rhodes, Bull Brand, Magpie and Squish. These brands are complemented by private label product ranges prepared
for major local and international retailers.
Trading and financial performance
Turnover for the six months increased by 53.5% to R2.0 billion (2015: R1.3 billion) through strong organic growth
and the integration of the acquisitions made over the past 12 months, while the depreciation in the Rand boosted
international revenue.
Regional turnover, which accounts for 75% (2015: 73%) of Group turnover, increased by 56.6%. Fresh Foods sales
increased by 20.5% with particularly good growth in the pie category. Long Life Foods grew turnover by 88.7%,
boosted by the acquisition of the juice business, as the division recorded market share gains in key product categories
and benefited from increased sales, marketing and advertising activity. Customer response to the Rhodes branded
range of fruit juices launched in September 2015 has been extremely positive.
Revenue from the acquisitions of Pacmar, Boland Pulp, Saint Pie and Deemster has been included for six months,
while General Mills has been included for four months and Alibaba Foods for two months. These acquisitions
contributed 37.4% to the growth in turnover.
The turnover growth of 45.1% in the International division was driven mainly by the 24.4% depreciation in the value of
the Rand against the Group's basket of trading currencies over the past six months.
The Group's gross profit margin improved by 60 basis points to 28.2% mainly through the improved performance in
the International division. Gross profit increased by 57.1% to R560.9 million.
The acquisitions made during the year increased the cost base by R78.9 million or 29.4%. Overall operating costs grew
by 44.0% as the Group significantly increased its investment in sales, marketing and advertising, and grew head
count to support the organic and acquisitive growth of the business.
The operating margin on a normalised basis, excluding listing costs of R21.8 million in the prior period, was 30 basis
points lower at 9.4% owing to the increased sales and marketing costs and the initial margin dilutive impact of the
acquisitions. Operating profit on the same basis increased by R61.5 million. Management continues to target an
operating margin above 10% in the medium term.
Profit after tax increased by R51.8 million to R109.9 million, with headline earnings for the period 86.6% higher at
R110.2 million.
Diluted headline earnings per share (HEPS) increased by 87.2% from 25.7 cents to 48.1 cents. Normalised HEPS
increased by 36.9% to 50.1 cents, adjusting for listing costs in the prior period. These results are in line with the
Group's trading statement released on 3 May 2016.
Cash generated from operations increased strongly to R128.3 million and was used to partially fund acquisitions and
capital expenditure.
Capital expenditure of R104.1 million (2015: R90.0 million) was invested in capacity expansion and enhancing
production efficiency, mainly in upgrading the meat production plant and increasing capacity at the fruit juice factory.
Outlook
The Group will continue to drive organic growth through gaining market share and entering new product categories in
both the Fresh Foods and Long Life Foods segments. This will be supported by the ongoing focus on producing select private
label ranges for major retailers. Momentum will be maintained on expanding the Group's presence in sub-Saharan
Africa and growing the International business.
The recent acquisitions should perform strongly in the second half and entrench the Group's position in the new
categories of fruit juice, baby food, bottled salads and pickles, and bakery products.
In the current inflationary environment management will continue to monitor the impact of price increases on volumes.
The severe drought affecting major parts of South Africa has until now had a limited impact on the business. However,
if the situation persists, this could impact on the Group's production costs and volumes in the second half.
Capital expenditure of R150 million is planned for the second half of 2016 for the continued upgrading of production
facilities and ongoing investment in capacity expansion.
In line with the practice adopted in 2015 of only paying an annual dividend, the board plans to declare a dividend for
the financial year to 25 September 2016, payable early in 2017, based on a dividend cover ratio of three times diluted
headline earnings per share.
Any reference to future performance included in this announcement has not been reviewed or reported on by the
auditors.
Condensed consolidated interim statement
of financial position
as at 27 March 2016
Reviewed Reviewed
Six-month Six-month Audited
period ended period ended year ended
27 March 29 March 27 September
2016 2015 2015
Notes R'000 R'000 R'000
ASSETS
Non-current assets 1 325 761 799 357 1 167 896
Property, plant and equipment 4 925 447 593 973 785 462
Intangible assets 83 331 51 051 79 908
Goodwill 286 207 126 325 271 775
Biological assets 6 30 776 27 899 30 751
Other financial instruments 7.1 – 109 –
Current assets 1 714 388 1 212 655 1 310 067
Inventory 5 1 008 051 788 835 694 604
Accounts receivable 686 274 418 858 604 078
Loans receivable 2 700 2 906 2 758
Bank balances and cash on hand 17 363 2 056 8 627
Total assets 3 040 149 2 012 012 2 477 963
EQUITY AND LIABILITIES
Capital and reserves 1 072 382 905 566 1 018 157
Share capital 720 205 720 205 720 205
Equity-settled employee benefits 9 1 387 – –
Accumulated profit 344 361 179 883 291 582
Equity attributable to owners of the company 1 065 953 900 088 1 011 787
Non-controlling interest 6 429 5 478 6 370
Non-current liabilities 746 732 333 811 692 533
Long-term loans 671 927 276 610 621 773
Deferred taxation liability 67 818 47 626 60 993
Employee benefit liability 6 987 9 575 9 767
Current liabilities 1 221 036 772 635 767 273
Accounts payable and accruals 725 882 490 298 430 352
Employee benefits accrual 91 641 69 779 114 927
Current portion of long-term loans 125 910 66 559 109 775
Taxation payable 30 363 34 682 29 820
Bank overdraft 237 228 109 762 72 448
Foreign exchange contract liability 7.2 10 012 1 555 9 951
Total equity and liabilities 3 040 149 2 012 012 2 477 963
Condensed consolidated interim statement of
profit or loss and other comprehensive income
for the six months ended 27 March 2016
Reviewed Reviewed
Six-month Six-month Audited
period ended period ended year ended
27 March 29 March 27 September
2016 2015 2015
Notes R'000 R'000 R'000
Revenue 1 988 072 1 294 852 3 022 604
Cost of goods sold (1 427 143) (937 740) (2 179 655)
Gross profit 560 929 357 112 842 949
Other income 13 303 15 664 28 665
Operating costs (386 721) (268 556) (582 241)
Profit before interest and taxation 187 511 104 220 289 373
Interest paid (37 984) (14 877) (47 256)
Interest received – 146 34
Profit before taxation 149 527 89 489 242 151
Taxation (39 649) (31 422) (72 373)
Profit for the period 109 878 58 067 169 778
Profit attributable to:
Owners of the company 109 819 58 909 169 728
Non-controlling interest 59 (842) 50
109 878 58 067 169 778
Other comprehensive income
Items that will not be reclassified
subsequently to profit or loss – – 99
Remeasurement of employee benefit liability – – 77
Deferred taxation effect – – 22
Total comprehensive income for the period 109 878 58 067 169 877
Total comprehensive income attributable to:
Owners of the company 109 819 58 909 169 827
Non-controlling interest 59 (842) 50
109 878 58 067 169 877
Earnings per share (cents) 8.1 49.9 26.7 77.1
Diluted earnings per share (cents) 8.1 47.9 25.6 74.1
Headline earnings per share (cents) 8.3 50.1 26.7 77.4
Diluted headline earnings per share (cents) 8.3 48.1 25.7 74.4
Condensed consolidated interim statement of changes in equity
for the six months ended 27 March 2016
Equity-settled
employee
Share benefits Accumulated Non-controlling
capital reserve profit interest Total
R'000 R'000 R'000 R'000 R'000
Balance at 28 September
2014 – audited 150 001 – 117 567 6 320 273 888
Issue of ordinary share
capital 569 891 – – – 569 891
Treasury shares sold 313 – 3 407 – 3 720
Total comprehensive
income for the period – – 58 909 (842) 58 067
Balance at 29 March 2015
– reviewed 720 205 – 179 883 5 478 905 566
Total comprehensive
income for the period – – 111 699 892 112 591
Balance at 27 September
2015 – audited 720 205 – 291 582 6 370 1 018 157
Total comprehensive
income for the period – – 109 819 59 109 878
Recognition of share-
based payments – 1 387 – – 1 387
Dividends paid to owners
of the company – – (57 040) – (57 040)
Balance at 27 March 2016
– reviewed 720 205 1 387 344 361 6 429 1 072 382
Condensed consolidated interim statement of cash flows
for the six months ended 27 March 2016
Reviewed Reviewed
Six-month Six-month Audited
period ended period ended year ended
27 March 29 March 27 September
2016 2015 2015
R'000 R'000 R'000
Cash flows from operating activities
Operating cash flows before working capital changes 225 812 129 823 346 463
Working capital changes (97 527) (145 429) (126 164)
Cash generated from/(utilised in) operations 128 285 (15 606) 220 299
Net interest paid (33 057) (79 058) (104 557)
Taxation paid (32 279) (23 176) (64 321)
Net cash inflow/(outflow) from operating activities 62 949 (117 840) 51 421
Cash flows from investing activities
Purchase of property, plant and equipment (104 056) (89 988) (175 882)
Proceeds on disposal of property, plant and equipment 3 796 125 528
Acquisition of subsidiaries and businesses less net
cash acquired (123 111) – (407 796)
Loan receivable advanced – (1 510) (1 510)
Loans receivable repaid 58 8 570 13 063
Net cash outflow from investing activities (223 313) (82 803) (571 597)
Cash flows from financing activities
Issue of ordinary share capital – 575 642 575 641
Preference share capital repaid – (156 005) (156 005)
Dividends paid to owners of the company (57 040) – –
Loans raised 119 565 321 343 740 867
Loans repaid (58 205) (521 168) (577 273)
Net cash inflow from financing activities 4 320 219 812 583 230
Net (decrease)/increase in cash and cash equivalents (156 044) 19 169 63 054
Cash and cash equivalents at beginning of the period (63 821) (126 875) (126 875)
Cash and cash equivalents at end of the period (219 865) (107 706) (63 821)
Condensed consolidated interim segmental report
for the six months ended 27 March 2016
Products and services from which reportable segments derive their revenues
Information reported to the chief operating decision-maker for the purposes of resource allocation and assessment of
segment performance focuses on the types of goods or services delivered or provided, and in respect of the "regional"
and "international" operations, the information is further analysed based on the different classes of customers. The
executive management of the Group have chosen to organise the Group around the difference in geographical areas
and operate the business on that basis.
Specifically, the Group's reportable segments under IFRS 8: Operating segments are as follows:
- Regional
- International
Segment revenues and results
The following is an analysis of the Group's revenue and results by reportable segment.
Reviewed Reviewed
Six-month Six-month Audited
period ended period ended year ended
27 March 29 March 27 September
2016 2015 2015
R'000 R'000 R'000
Segment revenue
Regional
Fresh products sales 538 941 447 165 928 780
Long life products sales 948 874 502 897 1 185 065
1 487 815 950 062 2 113 845
International
Long life products sales 500 257 344 790 908 759
Total 1 988 072 1 294 852 3 022 604
Segment profit
Regional 118 924 105 375 212 020
International 71 019 24 131 105 372
Total 189 943 129 506 317 392
Listing fees – (21 796) (21 796)
Acquisition costs (2 432) (3 490) (6 223)
Interest received – 146 34
Interest paid (37 984) (14 877) (47 256)
Profit before taxation 149 527 89 489 242 151
Segment revenue reported above represents revenue generated from external customers. Intercompany sales amounted to
R366 496 119 (six months ended 29 March 2015: R118 706 032, year ended 27 September 2015: R362 272 405).
The accounting policies of the reportable segments are the same as the Group's accounting policies described in note
1. Segment profit represents the profit before tax earned by each segment without allocation of listing fees, acquisition
costs, investment income and finance costs. This is the measure reported to the chief operating decision-maker for
the purpose of resource allocation and assessment of segment performance.
Geographical information
The Group's non-current assets by location of operations (excluding financial instruments and goodwill) are detailed
below. The chief operating decision-maker does not evaluate any other of the Group's assets or liabilities on a
segmental basis for decision-making purposes.
Reviewed Reviewed
Six-month Six-month Audited
period ended period ended year ended
27 March 29 March 27 September
2016 2015 2015
R'000 R'000 R'000
Non-current assets
Republic of South Africa 930 564 579 480 787 174
Kingdom of Swaziland 108 990 93 443 108 947
1 039 554 672 923 896 121
Information regarding major customers
Three customers (six months ended 29 March 2015: three) individually contributed 10% or more of the Group's revenues
arising from both regional and international sources.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM
FINANCIAL STATEMENTS
for the six months ended 27 March 2016
1. BASIS OF PREPARATION
Rhodes Food Group Holdings Limited is a company domiciled in the Republic of South Africa. These condensed
consolidated interim financial statements ('interim financial statements') as at and for the six months ended
27 March 2016 comprise the company and its subsidiaries (together referred to as the "Group'').
The reviewed financial results are prepared in accordance with the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee, the Financial Pronouncement as issued by the Financial
Reporting Standards Council, and the requirements of the Companies Act of South Africa and the JSE Listings
Requirements.
The accounting policies and methods of computation applied in the presentation of the interim financial
statements are consistent with those applied in the audited consolidated financial statements for the year ended
27 September 2015.
The interim financial statements are in accordance with the information required by IAS 34: Interim Financial
Reporting, and the accounting policies adopted and methods of computation are in accordance with
IFRS. Selected explanatory notes are included to explain events and transactions that are significant to an
understanding of the changes in the Group's financial position and performance since the last consolidated
financial statements as at and for the year ended 27 September 2015.
These interim financial statements were prepared under the supervision of CC Schoombie CA(SA), Chief
Financial Officer.
2. SEASONALITY OF OPERATIONS
The Group's performance is subject to seasonal trends based on the seasonality of fruit crops which are
processed annually from November to March and June to August. Due to the seasonal nature of fruit production
working capital is actively managed over an annual cycle.
3. EVENTS SUBSEQUENT TO REPORTING DATE
The directors are not aware of any matter or circumstance of a material nature arising since the end of the six
months ended 27 March 2016, otherwise not dealt with in the interim financial statements, which significantly
affect the financial position of the Group or the results of its operations.
4. PROPERTY, PLANT AND EQUIPMENT
During the six-month period ended 27 March 2016, the Group acquired assets with a cost of R104 056 224
(six months ended 29 March 2015: R89 987 944, year ended 27 September 2015: R175 882 717).
Assets with a carrying amount of R4 268 695 were disposed of during this period (six months ended 29 March
2015: R309 188, year ended 27 September 2015: R1 514 909). This disposal resulted in a loss of R472 345 (six
months ended 29 March 2015: R184 188, year ended 27 September 2015: R984 716), which was recognised
as part of 'operating costs' in the condensed consolidated statement of profit and loss and other comprehensive
income.
During the six-month period ended 27 March 2016, the Group contracted R93 609 029 (six months ended
29 March 2015: R46 870 684, year ended 27 September 2015: R45 728 751) for future capital commitments.
There has been no major change in the nature of property, plant and equipment, the policy regarding the use
thereof, or the encumbrances over the property, plant and equipment.
5. INVENTORY
A provision of R9 159 929 for the six months ended 27 March 2016 (six months ended 29 March 2015:
R14 882 934, year ended 27 September 2015: R9 159 929) was raised in order to disclose inventory at the
lower of cost or net realisable value.
Reviewed Reviewed
Six-month Six-month Audited
period ended period ended year ended
27 March 29 March 27 September
2016 2015 2015
R'000 R'000 R'000
6. BIOLOGICAL ASSETS
Livestock 8 546 8 485 8 521
Growing crops 22 230 19 414 22 230
30 776 27 899 30 751
Measurement of fair value of livestock
The fair values of the livestock have been categorised as level 3 fair values based on the inputs to valuation
techniques used. The valuation technique is based on the fair value less estimated point-of-sale costs of
which the unobservable inputs consist of premiums on the classification of livestock and premiums for quality
depending on the physical attributes of the livestock.
Livestock
The estimated fair value would increase/(decrease) if:
More/(less) livestock were classified as breeders;
Livestock prices increased/(decreased); or
Weight and quantity premiums increased/(decreased).
Growing crops
The estimated fair value would increase/(decrease) if:
Pineapple volumes increased/(decreased);
Pineapple prices increased/(decreased); or
Costs of growing or harvesting (increased)/decreased.
Measurement of fair value of growing crops
The fair values of the pineapple plantations have been categorised as level 3 fair values based on the inputs to
valuation techniques used. The valuation technique is based on the fair value (which approximates market value)
less estimated point-of-sales costs at the point of harvest of which the unobservable inputs consist of estimated
volumes (2016: average of 57 083 tonnes delivered for a four-year period, 2015: average of 54 975 tonnes
delivered for a four-year period) and estimated pricing (2016: R1 277 per ton delivered, 2015: R1 222 per ton
delivered) of pineapples harvested.
Reviewed Reviewed
Six-month Six-month Audited
period ended period ended year ended
27 March 29 March 27 September
2016 2015 2015
R'000 R'000 R'000
Carrying value at the beginning of the period 30 751 28 015 28 015
Value of crops harvested (5 376) (5 286) (17 190)
Additions 5 376 5 286 9 133
Gain included in profit or loss 25 (116) 10 793
Net change in fair value 25 (116) 10 793
Carrying value at the end of the period 30 776 27 899 30 751
7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
7.1 Other financial instruments
Interest rate swap – not designated in hedge
accounting relationship
Financial asset
Non-current – 109 –
7.2 Foreign exchange contracts
Contract loss 10 012 1 555 9 951
7.3 Valuation of financial instruments at fair value
held through profit or loss
Financial instruments at fair
value through profit and loss Level Valuation technique
Interest rate swap Level 2 Mark to market valuation by issuer of instrument
Foreign exchange contracts Level 2 Mark to market rates by issuer of instrument
Reviewed Reviewed
Six-month Six-month Audited
period ended period ended year ended
27 March 29 March 27 September
2016 2015 2015
R'000 R'000 R'000
8. EARNINGS PER SHARE
8.1 Basic earnings per share
Profit attributable to owners of the
company 109 819 58 909 169 728
Basic earnings per share (cents) 49.9 26.7 77.1
Diluted earnings per share (cents) 47.9 25.6 74.1
8.2 Weighted average number of shares in
issue
Weighted average number of shares in
issue 221 000 000 171 000 000 171 000 000
Ordinary shares issued – 50 000 000 50 000 000
Treasury shares (937 500) – (937 500)
Weighted average number of shares in
issue 220 062 500 221 000 000 220 062 500
Effect of convertible preference shares 9 000 000 9 000 000 9 000 000
Effect of share offers 14 534 - -
Weighted average number of shares in
issue 229 077 034 230 000 000 229 062 500
Reviewed Reviewed
Six-month Six-month Audited
period ended period ended Year ended
27 March 29 March 27 September
2016 2015 2015
R'000 R'000 R'000
8.3 Headline earnings per share
Reconciliation between profit attributable
to owners of the company and headline
earnings:
Profit attributable to owners of the
company 109 819 58 909 169 728
Adjustments to profit attributable to
owners of the company 340 132 709
Loss on disposal of property, plant and
equipment 472 184 985
Taxation effect (132) (52) (276)
Headline earnings 110 159 59 041 170 437
Headline earnings per share (cents) 50.1 26.7 77.4
Normalised headline earnings per share(1, 2) (cents) 50.1 36.6 87.4
Diluted headline earnings per share (cents) 48.1 25.7 74.4
Normalised diluted headline earnings per
share(1, 2) (cents) 48.1 35.1 83.9
(1) Normalised headline earnings and normalised diluted headline earnings for the 2015 period have been adjusted
for once-off listing fees incurred of R21 795 875 (not deductible for taxation purposes), relating to the listing of the
company's issued share capital on the JSE Limited.
(2) The pro forma financial information has been prepared for illustrative purposes only to provide information on how
the normalised headline earnings and normalised diluted headline earnings adjustment might have impacted on the
financial results of the Group. Because of its nature, the pro forma financial information may not be a fair reflection of
the Group's results of operation, financial position, changes in equity or cash flows.
The underlying information used in the preparation of the pro forma financial information has been prepared using the
accounting policies that comply with International Financial Reporting Standards. These are consistent with the audited
consolidated financial statements for the year ended 28 September 2015.
There are no post balance sheet events which require adjustment to the pro forma information.
The directors are responsible for compiling the pro forma financial information on the basis of the application criteria
specified in the JSE Listings Requirements.
9. EQUITY-SETTLED EMPLOYEE BENEFITS
The Rhodes Food Group 2015 Share Plan ("the Plan") is a long term (share based) incentive scheme for
executives and managers of the company and its subsidiaries and was approved by shareholders at the annual
general meeting on 11 February 2016.
In December 2015 offers under the Plan were granted to executives and selected managers of the company
and its subsidiaries. The offers will vest over a three year period starting from the 3rd and ending on the 5th
anniversaries of the offers. The offers consist of a weighted combination of the following types of equity-settled
benefits:
- Allocations of Share Appreciation Rights (equity settled);
- Conditional awards of (full value) Performance Shares; and
- Grants of (full value) Restricted Shares.
Offers of 283 352 Share appreciation rights, 191 471 Performance shares and 88 806 Restricted shares were
granted at a fair value of R7.84, R21.32 and R25.48 respectively.
The fair value of offers granted during the six-month period ended 27 March 2016 was estimated on the date of
grant using the following assumptions:
Dividend yield (1%)
Expected volatility (25%)
Risk-free interest rate (8.5%)
Expected life of share offers (3 -5 years)
Weighted average share price R24.21
For the six months ended 27 March 2016, the Group has recognised R1 387 000 of share-based payment
reserve against equity in the statement of changes in equity (six-month period ended 29 March 2015: R0; year
ended 30 September 2015: R0).
10. CONTINGENT LIABILITIES
The Group has entered into guarantees, the outcome of which has not been determined. The guarantees from
import and operations activities for the six months ended 27 March 2016 are R4 465 195 (six months ended
29 March 2015: R7 434 287, year ended 27 September 2015: R4 733 262). There were no other changes in the
contingent liabilities from the prior period.
11. ACQUISITION OF BUSINESSES
11.1 Deemster Proprietary Limited
On 1 October 2015 the Group acquired the business assets of Deemster Proprietary Limited. Deemster
conducts a canning and bottling business in Bethlehem in the Free State. Its products include canned
vegetables and bottled salads and pickles such as beetroot and gherkins and as such offers the opportunity
for the Group to enter into these new categories. It primarily co-packs products for third party brands and
produces private label products for most South African retail groups. The board is of the opinion that the
acquisition presents an attractive investment opportunity which is aligned with the Group's strategy to grow
through value accretive acquisitions.
Included in the profit for the period is a loss of R1 273 050 attributable to the Deemster operations.
Revenue for the period includes R32 486 323 in respect of this acquisition.
1 October
2015
R'000
Assets acquired
Property, plant and equipment 10 000
Inventory 15 020
Fair value of assets acquired 25 020
Employee liabilities 419
Purchase price settled in cash 24 601
Goodwill –
11.2 General Mills South Africa Proprietary Limited
The Group acquired the Foodservice Operations business assets of General Mills South Africa Proprietary
Limited with effect from 30 November 2015. General Mills manufactures dry and frozen bakery products
from its operations in Johannesburg. The board is of the opinion that the acquisition presents an attractive
investment opportunity which is aligned with the Group's strategy to grow through value accretive
acquisitions.
Included in the profit for the period is R227 367 attributable to the additional business generated by
General Mills. Revenue for the period includes R16 696 851 in respect of this acquisition. The Group is
unable to quantify the revenue and profit or loss as if the business was acquired at the beginning of the
financial year due to insufficient information available.
30 November
2015
R'000
Assets acquired
Property, plant and equipment 49 253
Inventory 8 628
Fair value of assets acquired 57 881
Employee liabilities 1 371
Purchase price settled in cash 56 510
Goodwill –
11.3 Alibaba Foods Holdings Proprietary Limited
On 1 February 2016 the Group acquired the business assets and liabilities of Alibaba Foods Holdings
Proprietary Limited, for a total cash consideration of R42 million. Alibaba, based in Athlone, Cape Town,
manufactures a range of halaal Eastern food products. The board is of the opinion that the acquisition
presents an attractive investment opportunity which is aligned with the Group's strategy to grow through
value accretive acquisitions.
The goodwill recognised anticipates the expected future revenues to be derived from expanding the
group's existing bakery and snacking operations and thereby strengthening Rhodes Food's position in
those categories, particularly in the convenience channel.
Included in the profit for the period is a loss of R456 737 attributable to the Alibaba operations. Revenue
for the period includes R6 333 388 in respect of this acquisition. The Group is unable to quantify the
revenue and profit or loss as if the business was acquired at the beginning of the financial year due to
insufficient information available.
1 February
2016
R'000
Assets and liabilities acquired
Property, plant and equipment 20 000
Intangible assets 5 000
Inventory 1 492
Accounts receivable 5 281
Accounts payable and accruals (3 931)
Employee benefits accrual (274)
Fair value of assets acquired 27 568
Purchase price - settled in cash 42 000
Goodwill 14 432
12. DIVIDEND
On 25 January 2016, a dividend of 24.8 cents per share (total dividend R57.04 million) was paid to holders of
fully paid ordinary shares. The company did not pay any dividends during the year ended 27 September 2015.
13. SIX-MONTH PERIOD END
The Group's interim financial period ends in March which reflects 26 weeks of trading and as a result the
reporting date may differ year on year. References to an interim financial period are to the 26 weeks ended
on or about 31 March. As a result the interim financial statements were prepared for the interim period ended
27 March 2016 (29 March 2015).
14. REVIEW REPORT
The directors have elected to engage the Group's auditors, Deloitte & Touche, to conduct a voluntary review of
the condensed consolidated interim financial statements.
The Group's auditors have issued an unmodified review report on the condensed consolidated interim financial
statements which is available for inspection on the Group’s website (www.rhodesfoodgroup.com) as well as the
Group’s registered office (Pniel Road, Groot Drakenstein, 7680), at no charge, during normal business hours.
Any reference to the Group's outlook included in this announcement has not been reviewed or reported on by the
Group's auditors. The auditor's report does not necessarily report on all the information contained in this
announcement. Shareholders are therefore advised that, in order to obtain a full understanding of the nature
of the auditor's engagement, they should obtain a copy of the auditor's report together with the accompanying
financial information from the company's registered office.
Corporate information
Registered address Pniel Road, Groot Drakenstein, 7680
Private Bag X3040, Paarl, 7620
Directors Dr YG Muthien* (Chairperson)
BAS Henderson (Chief Executive Officer)
MR Bower*
TP Leeuw*
LA Makenete*
CC Schoombie (Chief Financial Officer)
CL Smart**
GJH Willis**
* Independent non-executive
** Non-executive
Company secretary Statucor Proprietary Limited
Transfer secretaries Computershare Investor Services Proprietary Limited
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107
Sponsor Rand Merchant Bank, a division of FirstRand Bank Limited
Auditors and reporting accountants Deloitte & Touche
www.rhodesfoodgroup.com
Bruce Henderson Tiaan Schoombie
Chief Executive Officer Chief Financial Officer
Groot Drakenstein
23 May 2016
Date: 23/05/2016 07:05:00
Supplied by www.sharenet.co.za
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS. 