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Trading update for the five months ended February 2019

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


Group turnover for the five month period ended 28 February 2019 ("the period")
increased by 8.0%.

Regional segment
Despite the continued challenging trading environment, turnover in the group’s
regional segment (South Africa and the rest of Africa) for the period increased by

Regional long life revenue grew by 12.7% with volume growth of 10.2%. The
main growth drivers were fruit juices, dry foods and the meat category which
showed an encouraging recovery.

The group’s brands have gained or maintained market share across core product

Fresh foods sales increased by 1.4% with volumes unchanged on the prior
period. Ready meals and the pie category have both proven to be resilient in the
current consumer slowdown. The turnaround in Ma Baker, the KwaZulu-Natal
based pie producer, has continued and the business has contributed positively
for the five-month period.

Margins in the regional segment have been diluted by the impact of low selling
price inflation, higher depreciation charges and substantial once-off costs relating
to the relocation of the pulps and purees plant from Wellington to Groot
Drakenstein, and the associated interruption in production.

The R30 million acquisition of RCL Foods Consumer Proprietary Limited’s protein
snack business, which was announced to shareholders in November 2018, has
been completed. The business produces protein snack foods for Woolworths and
is being integrated into RFG’s Western Cape ready meals operation during

International segment
International turnover increased by 6.7% for the period, with volume growth of

The international margin has continued to improve, with the segment benefiting
from the 7.3% weakening in the value of the Rand against the group’s major
trading currencies over this five-month period. However, profitability has been
affected by the impact of the drought in the Western Cape on the costs and
quality of canned deciduous fruit products manufactured in the prior financial
year. This resulted in canned fruit, mainly peaches, being sold at low prices on
international markets which has had a material impact on profitability.

Unrealised gains on the mark-to-market revaluation on forward exchange
contracts were approximately R8 million lower compared to the corresponding
period in 2018.

Interest payments
Interest payments, which relate mainly to the funding of the Ma Baker acquisition
and the group’s capital investment programme, exceeded those of the prior
period by approximately R6 million.

The financial information on which this voluntary trading update is based has not
been audited, reviewed or reported on by the group’s independent external

The group’s interim financial results for the six months ending 31 March 2019 will
be released on the Stock Exchange News Service of the JSE on or about 21 May

Groot Drakenstein
27 March 2019

Rand Merchant Bank (A division of FirstRand Bank Limited)

Date: 27/03/2019 07:13:00 
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