RHODES FOOD GROUP HOLDINGS LIMITED - Trading update and trading statement for the ten months ended July 2017

Trading update and trading statement for the ten months ended July 2017

Rhodes Food Group Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 2012/074392/06
JSE share code: RFG
ISIN: ZAE000191979
(“the group”)

TRADING UPDATE AND TRADING STATEMENT FOR THE TEN MONTHS
ENDED JULY 2017

Group turnover for the ten months ended July 2017 (“the period”) increased by
9.9% over the prior period.

REGIONAL
The group has maintained strong growth momentum in its regional segment
(South Africa and the rest of Africa). Regional turnover increased by 21.1%, with
organic growth of 13.9%, while also benefiting from the acquisitions of Pakco and
Ma Baker which have been consolidated for four months in this period. The
integration programme for both businesses is progressing well and is delivering
the projected early-stage cost savings and synergy benefits. Trading conditions
domestically and in other African markets have remained challenging in recent
months.

INTERNATIONAL
The group’s international business continues to be adversely impacted by the
strengthening of the Rand which gained 11.8% against the group’s basket of
trading currencies over this period.

While export volumes of canned fruits have partially recovered in the second half
of the year, sales of industrial products have remained slow mainly due to
continued pressure on pricing and a reduction in demand for pulp and puree
products.

International turnover for the ten months declined by 21.9% over the prior period.
In the six months to March 2017 the group reported a 20.7% decline in
international sales.

Shareholders will note that while the operating margin of the international
business benefited from the group’s foreign exchange hedging policy in the first
half of the financial year, this will have a significantly reduced benefit to the
operating margin in the second half.

Management expects trading across the regional and international businesses to
continue at similar levels for the last two months of the financial year.
Shareholders will be updated on the group’s trading performance for the financial
year during October 2017.

TRADING STATEMENT
Shareholders are advised that the performance of the international business has
had a significant adverse effect on the group’s profitability. Management expects
headline earnings for the current financial year to decline by between 17% and
27% over the restated headline earnings of R293.1 million for the prior financial
year.

The weighted average number of shares in issue has increased by 24.7 million or
11.2% over the prior financial year following the issue of shares for the capital
raise undertaken by the group in November 2016 and the acquisition of Pakco
effective March 2017.

                              Year ended                  Year ending
                              25 Sept 2016                 1 Oct 2017
                               Reported*                 Expected range
 Headline earnings               R293.1m         17% - 27% lower        R214.0m –
                                                                         R243.3m
 Earnings per share               132.1c         25% - 35% lower      85.9c – 99.1c
 (EPS)**

 Headline earnings per            133.3c         25% - 35% lower      86.6c – 100.0c
 share (HEPS)**
 Diluted HEPS**                   128.0c         25% - 35% lower      83.2c – 96.0c

* IFRS restatement from figures reported in prior financial year
** Impacted by the increase in the weighted average number of shares in issue



The financial information in this announcement has not been reviewed and
reported on by the group’s independent external auditors.

The group’s financial results for the year ending 1 October 2017 will be released
on the Stock Exchange News Service of the JSE on 21 November 2017.

Groot Drakenstein
5 September 2017

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

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