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Trading statement
RCL FOODS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1966/004972/06)
ISIN: ZAE000179438
Share Code: RCL
(“RCL Foods" or “the Group”)
TRADING STATEMENT
Shareholders are advised that RCL Foods expects that its headline
earnings per share from continuing operations (“HEPS”) for the
year ended 30 June 2016 will be between 95.0 cents (–15.3%) and
105.0 cents (-6.4%) versus HEPS of 112.2 cents for the
corresponding year ended 30 June 2015. The combined HEPS (which
includes continuing and discontinued operations) for the year
ended 30 June 2016 will be between 95.0 cents (-16.0%) and 105.0
cents (–7.2%) versus combined HEPS of 113.1 cents for the
corresponding year ended 30 June 2015.
The earnings per share from continuing operations (“EPS”) for the
year ended 30 June 2016 will be between 20.0 cents (–80.5%)and
30.0 cents (–70.7%) versus EPS of 102.4 cents for the
corresponding year ended 30 June 2015. The combined EPS (which
includes continuing and discontinued operations) for the year
ended 30 June 2016 will be between 20.0 cents (–79.7%) and 30.0
cents (-69.6%) versus combined EPS of 98.7 cents for the
corresponding year ended 30 June 2015.
The results for the year ended 30 June 2016 have been materially
impacted by three abnormal items:
- an impairment of R642.8 million (excluded from headline
earnings) relating to goodwill and trademarks in the Milling
cash generating unit. The impairment is due to lower
forecasted cash flows as a result of a competitive trading
environment and increases in the ten-year government bond
yield driving up the discount rate. The impact on EPS is a
negative 74.5 cents
- the release of a R163.3 million provision for uncertain
taxation disputes raised in terms of IFRS 3 (Business
Combinations) as part of the Foodcorp acquisition. This
matter has now been finalised with the South African Revenue
Service and consequently the income tax expense for the
period has been reduced by R163.3 million. The release has no
cashflow impact. The impact on HEPS and EPS is a positive
18.9 cents;and
- recognition of R67,7 million profit after tax (headline
earnings impact R118,9 million) relating to the exercise of
the Zam Chick and Zamhatch put options. The impact on HEPS
and EPS is a positive 13.8 cents and 7.8 cents respectively.
Excluding the above three items, HEPS from continuing operations
for the year ended 30 June 2016 will be between 61.4 cents (–
45.3%) and 71.4 cents (–36.4%)versus 112.2 cents for the
corresponding year ended 30 June 2015.
Excluding the Sugar and Chicken business units, the remaining
operations of the Group have performed well. The Sugar and Chicken
business units have been adversely impacted by the worst drought
in Southern Africa in the past 100 years. Chicken results have
also been adversely impacted by the massively oversupplied poultry
market as a result of surplus domestic volumes as well as record
levels of dumped imports.
The Group’s results for the year ended 30 June 2016 are expected
to be released on SENS on 30 August 2016.
The financial information on which this trading statement is based
has not been reviewed and reported on by the Group’s external
auditors.
Durban
18 August 2016
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 18/08/2016 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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