SENS Headlines
Summarised consolidated results for the six months ended 28 March 2021

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



  -   Group turnover down 3.4%
  -   Operating profit up 14.9%
  -   Operating profit margin up 100 basis points to 6.5%
  -   Adjusted operating profit margin* up 210 basis points to 7.6%
  -   EBITDA up 12.1%
  -   EBITDA margin expanded from 9.3% to 10.8%
  -   Diluted headline earnings per share up 46.3%
  -   Cash generated from operations up 29.1%
  -   Net debt/equity ratio improved from 55.0% to 47.5%

* Excluding once-off restructuring and impairment costs in the reporting period.

Trading and financial performance
The group reported a resilient operational performance in the Covid-19 impacted trading
environment in the six months to March 2021. The results benefited from net foreign
exchange gains of R19.6 million (2020: net losses of R47.6 million) as well as lower interest 
payments. This was moderated by lower sales and once-off costs related to the centralisation 
of the group's pies and pastries business and related property impairments.

Group turnover declined by 3.4% to R2.8 billion owing to the impact of the Covid-19
restrictions on two of the group's largest product categories of fruit juice and pies, the base
effect of the exceptionally strong regional sales performance ahead of the national lockdown in
March 2020 and slower international volumes owing to shipping and logistical challenges.

Turnover in the regional segment (South Africa and the rest of Africa) was 1.7% lower,
reflecting the impact of the additional Covid-19 restrictions imposed during the second wave of
the pandemic over the festive season.

After increasing by 3.2% for the first five months of the reporting period, long life foods 
turnover reduced by 0.5% for the six months as volumes declined by 8.7%. The slowdown was due 
to sales for March 2021 declining by 13.4% over March 2020 when sales were driven by strong
customer demand and panic buying ahead of the national lockdown.

Dry foods performed well following the successful relaunch of the Hinds spices range. This
growth was offset by the slowdown in fruit juice sales owing to restrictions on entertainment
and leisure activities during the summer holidays season as well as the delayed start of the
school year in 2021.

Long life foods sales into the rest of Africa grew by a strong 11.1%, driven mainly by the dry
foods and canned meat categories.

Fresh foods sales declined by 3.6%, with price inflation of 2.2% and volume decline of 5.7%.
The pie and bakery categories were adversely impacted by the reduced travel over the festive
season which resulted in a slowdown in convenience and forecourt traffic.

International turnover was 12.6% lower. Export volumes declined by 20.7% due to global
logistical challenges and particularly congestion at the Cape Town harbour which had a
significantly adverse impact on exports in March. However, customer demand remains strong
and management is confident that volumes will recover in the second half despite the ongoing
port congestion.

Net foreign exchange gains of R19.6 million were recorded for the first half of 2021 compared
to net foreign exchange losses of R47.6 million in the first half of 2020. The group incurred
once-off retrenchment and closure costs of R14.9 million and an impairment of properties of
R16.8 million relating to the consolidation of the KwaZulu-Natal (KZN) pies and pastries
operation (formerly Ma Baker) into the group's Gauteng pie and bakery facilities.

Excluding these once-off costs and foreign exchange movements, other operating costs for the
half year reduced by 2.7% due mainly to lower travel during the pandemic and savings realised
from the restructuring of the pie operations.

The group's operating profit increased by 14.9% to R184.6 million and the operating profit
margin improved from 5.5% to 6.5%. The regional operating profit margin, excluding the 
once-off and impairment costs, increased to 8.9% (2020: 8.3%). After reporting a loss of 
R44 million for the first half of 2020, the international segment recovered to break even 
for the reporting period.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 12.1% 
to R307 million, while the EBITDA margin was higher at 10.8% (H1 2020: 9.3%).

Net interest paid reduced by R18.8 million to R35.1 million owing to the 300 basis points
reduction in the repo rate of the SA Reserve Bank relative to the prior period and the group's
lower debt levels.

Profit after tax increased by 36.4% to R106.1 million. Earnings per share increased by 
34.8% to 40.7 cents, headline earnings per share rose by 46.2% to 45.6 cents, with 
diluted headline earnings per share increasing by 46.3% to 45.5 cents. 

The net working capital to turnover ratio increased to 55.0% from 53.7% owing mainly to the
lower turnover in the current year.

Cash generated from operations increased by 29.1% to R177.9 million. Capital expenditure for
the six months increased by R51 million to R138 million. Capital projects include the installation 
of an additional fruit juice line and the upgrade of the bakery facility in Gauteng for the 
integration of the pies and pastries volumes following the closure of the KZN operations.

Net debt of R1 255 million, including lease liabilities, reduced by R101 million and the net debt
to equity ratio improved from 55.0% to 47.5%.

While the consumer spending environment is expected to remain constrained in the short to
medium term, the lifting of lockdown restrictions from 1 March 2021 and the normalisation of
school attendance has contributed to a steady recovery in fruit juice and pie sales into the
second half of the year. The group expects to increase brand share and maintain the growth
momentum in the dry foods category.

However, the rising Covid-19 infection rate in the country, together with the slow pace of the 
vaccination roll-out programme, increases the potential for a third wave of infections in the 
weeks and months ahead. This heightens the risk of the country reverting to lockdown regulations 
which could adversely impact the group's sales and profitability.  

Following the completion of the restructuring and centralisation of the pie operations the group
expects to realise annual savings of R26 million, with savings of R13 million anticipated for the
second half of the 2021 financial year. The sale of the KZN properties is expected to realise
approximately R25 million cash in the second half.

The strong growth in sales into the rest of Africa is expected to be maintained into 
the second half.

Management is focused on growing brand shares and expanding margins towards the 10%
regional margin target.

Demand for the group's canned fruit products remains strong across all of its international
markets and volumes are expected to recover as the shipping backlog reduces. The volume of
product canned in the recently completed deciduous fruit season was higher than 2020.

The international performance will be negatively impacted if the Rand continues to trade at
current levels relative to the average US dollar/Rand exchange rate of R17.33 for the second
half of the 2020 financial year. This will be partially offset by the increased natural hedge
within the group where the pricing of key packaging materials is directly linked to currency movements.

Management does not expect any significant reduction in interest payments in the second half
in the current stable interest rate environment.

Capital expenditure of R250 million is planned for the full financial year, including the
completion of the additional fruit juice line and the bakery upgrade as well as building 
of a new warehouse at the fruit juice facility in Wellington.

Management continues to evaluate opportunities for strategic, bolt-on acquisitions which are
aligned to the group's core product categories.

Any reference to future performance included in this announcement has not been reviewed or
reported on by the group's independent auditor.

Bruce Henderson                                 Tiaan Schoombie
Chief Executive Officer                         Chief Financial Officer

Groot Drakenstein
19 May 2021

This short-form announcement is the responsibility of the company's directors and is a summary 
of the detailed interim results announcement and does not contain full or complete details. 
The announcement can be downloaded from 
and on the group's website at The full announcement is available for inspection, 
at no charge, at the company's registered office (Pniel Road, Groot Drakenstein) and at the 
office of the sponsor (1 Merchant Place, corner Rivonia Road and Fredman Drive, Sandton) during 
office hours for a period of 30 calendar days following the date of this announcement. Any
investment decision in relation to the company's shares should be based on the full announcement.

Directors: Dr YG Muthien* (Chairperson), BAS Henderson (Chief Executive Officer),
MR Bower* (Lead Independent Director), WP Hanekom (Deputy Chief Executive
Officer),TP Leeuw*, S Maitisa*, BN Njobe*, CC Schoombie (Chief Financial Officer),
CL Smart**, GJH Willis**
* Independent non-executive      **Non-executive

RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 19-05-2021 07:05:00

Supplied by
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.