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Operational Update and Trading Statement
ROLFES HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2000/002715/06)
Share Code: RLF & ISIN: ZAE000159836
("Rolfes" or "the Company")
OPERATIONAL UPDATE AND TRADING STATEMENT
Rolfes is a black controlled platform chemical group with its
current black shareholding in excess of 50%. The Group targets
the need for food security and clean water through the
agricultural, food, industrial and water divisions expanding
progressively in domestic, developed and foreign emerging
markets. Value-add is deployed through intellectual capital and
technological innovation.
Rolfes’ focus during the past five months was on improving top
line growth by exploring international opportunities, adding new
product lines, working capital management, closure of the lead
chrome pigment plant, improving operating profit margins and
performance and improving the groups return on capital invested.
The board is pleased to provide the following operational update
to the market regarding current operational performance.
Agriculture
The defensive nature of the Agricultural division, mostly
supplying foliar feed, organic and adjuvant products into high-
value and specialised high value permanent and semi-permanent
crops, provided a barrier against the effect of the prolonged
severe drought conditions experienced. Export growth and
effective resource restructuring contributed to counteracting the
effects of the drought, translating into satisfactory performance
for the year to date.
Food
The Bragan transaction concluded effective 1 October 2015
contributed positively to Group performance. The integration is
completed and the new management team is in place. Performance
reflects similar growth patterns to pre-acquisition performance.
The Western and Eastern Cape branches were established during
February 2016 and capacity in the Kwa-Zulu Natal branch extended
to accommodate growth. The business is extending both product
lines and its customer base with good exports growth into
neighbouring countries.
Industrial
The restructuring of the Rolfes Colour Pigments International
business was completed on 31 March 2016. A rental agreement for
the usage of the business’s real estate has been concluded with a
Chinese organic pigment manufacturer, resulting in the rental
received from 1 April 2016 to 30 June 2016 fully covering
retrenchment costs incurred. The rental contract resulted in 30
staff members being successfully transferred to the tenant,
reducing the retrenchment head count to 63 employees of which a
further 10 employees were successfully reemployed by the tenant.
Rolfes Chemicals performed well with the weak Rand counteracting
low oil prices. Export growth, good cost control and effective
management of resources contributed to the year to date
performance of the business.
Water
Rolfes Silica continued to perform according to expectations
entering new local markets with its current product range and
effectively optimising cost saving opportunities. The PWM Group
year to date performance was hampered by tenders not awarded to
mirror prior year achievements. Focus is being placed on
extending market share in South Africa in industries not
previously focused on and through leveraging the current group
customer base.
Trading update
With four (4) weeks of trading to go to the 30 June 2016 year
end, current estimates indicate that headline earnings per share
("HEPS") and earnings per share ("EPS") will be in excess of 25%
higher (expected HEPS and EPS in excess of 47, 8 cents and 45, 6
cents respectively) for the year ending 30 June 2016 compared to
30 June 2015 (HEPS and EPS of 38, 2 cents and 36, 5 cents
respectively). Once the Company has further certainty on expected
HEPS and EPS, a further trading statement will be released on
SENS.
The information in this operational and trading update has not
been reviewed or reported on by the Company’s auditors. The
Company’s audited financial results for the year ending 30 June
2016 are expected to be published on SENS by close of business on
19 September 2016.
Johannesburg
30 May 2016
Sponsor: Grindrod Bank Limited
Investor relations: Singular Systems
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