Wrap Text
Summarised consolidated results for the six months ended 30 March 2025 and cash dividend declaration
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")
SUMMARISED CONSOLIDATED RESULTS FOR THE SIX MONTHS ENDED 30 MARCH 2025 AND CASH DIVIDEND DECLARATION
Key features
- Group revenue +3.5% to R4.0 billion
- Regional revenue +7.6% to R3.5 billion
- Group operating profit -13.9% to R343 million
- Group operating profit margin -170 bps to 8.5%
- Regional operating profit +4.9% to R343 million
- Regional operating profit margin -20 bps to 9.8%
- Headline earnings -11.9% to R231 million
- Interim dividend of 29.6 cps
- Net debt-to-equity ratio improved from 33.3% to 22.0%
Trading and financial performance
Group revenue increased by 3.5% to R4.0 billion. The regional segment reported a strong recovery in volumes despite
consumer spending remaining under pressure in the domestic market and accounted for 87% of the Group's revenue.
Revenue Increase/ Volume Price Mix Forex
(% change) (decrease)
Regional segment 7.6 9.9 (0.6) (1.7)
International segment (17.2) (11.7) (3.3) 0.4 (2.6)
Total Group 3.5 6.3 (1.4) (1.0) (0.4)
Regional revenue increased by 7.6%, driven by volume growth of 9.9% (H1 2024: volume decline of 5.5%) and price deflation
of 0.6% (H1 2024: price inflation of 10.0%).
Within the regional segment, long life foods increased revenue by 7.2% with volume growth of 14.5%, which was partially offset
by price deflation of 3.7%. The fruit juice, dry foods and pulps and purees categories all delivered double digit revenue growth.
Volume gains were supported by a heightened focus on product and packaging innovation, most notably the launch of the fruit
nectar juice range.
Fresh foods revenue grew by 8.3%, supported by volume growth of 1.5% and price inflation of 5.0%. The ready meals and pie categories
both reported good revenue and volume growth.
Revenue in the international segment declined by 17.2%, impacted by softer global demand and shifting market dynamics.
Several canned deciduous fruit contracts were not honoured by customers in the Far East, resulting in product being redirected to
alternative markets where it was sold at lower prices. The delay in securing new customers further contributed to an 11.7% decline
in export volumes. This was compounded by a shortage of canned pineapple stock due to the drought conditions in Eswatini that
adversely affected fruit quality and yields.
The Group's gross profit of R999 million was in line with the prior comparative period while the gross profit margin declined by
80 basis points ("bps") to 24.8% due mainly to selling price deflation, particularly in the international segment.
The regional operating profit increased by 4.9% to R343 million while the operating profit margin reduced slightly to 9.8% from
10.0%. However, the international operating profit was R72.5 million lower at R0.7 million, with the operating profit margin
reducing from 11.5% to 0.1% due to the lower revenue and pressure on the gross profit margin owing to selling price deflation.
This contributed to the Group's operating profit declining by 13.9% to R343 million, with the operating profit margin 170 bps
lower at 8.5%.
Earnings before interest, tax, depreciation and amortisation ("EBITDA") were 8.8% lower at R503 million and the EBITDA margin
contracted by 170 bps to 12.5%.
The Group's net interest cost was R13 million lower at R26 million due to the Group's lower debt levels and lower average interest
rates over the period.
Headline earnings at R231 million were 11.9% lower than the prior comparative period with headline earnings per share (HEPS)
declining by 11.9% to 88.7 cents. Earnings per share reduced by 11.3% to 89.1 cents and diluted HEPS by 12.3% to 87.5 cents.
Net working capital totalled R2.2 billion at the end of the period, R52 million lower than the prior corresponding period.
Inventory levels reduced by R25 million while the R153 million increase in accounts receivable was more than offset by a
R180 million increase in accounts payable. This limited the group's investment in net working capital to R164 million for the
interim reporting period (H1 2024: R433 million) The R269 million lower investment in net working capital contributed to cash
generated from operations increasing by R248 million to R343 million for the reporting period.
Net debt decreased by 29.8% or R349 million to R821 million and the net debt- to-equity ratio improved to 22.0% from 33.3%. Long-term
loans of R106 million were repaid while no loans were raised during the half year ended 30 March 2025. Capital expenditure amounted
to R168 million (H1 2024: R200 million) and is expected to total R430 million for the full financial year.
Interim dividend
Following the increase in the Group's dividend payout ratio from 33.3% to 50.0% of headline earnings for the 2024 financial year,
the board has amended the dividend policy and will now declare both an interim and a final dividend each year. Accordingly, an
interim dividend of 29.6 cents per share has been declared, based on a dividend cover ratio of 3.0 times HEPS.
Outlook
Rising global tensions and escalating geopolitical risks driven by developments in the USA have heightened uncertainty across
international markets. This ongoing instability has also negatively impacted South Africa's macroeconomic outlook and slowed the
country's economic recovery.
Management is confident that the trading momentum in the regional segment will continue into the second half of the financial year,
despite ongoing pressure on consumer spending and weakening confidence amid the local and global uncertainty. Product and packaging
innovation will be key to driving brand share growth and expanding into new product categories.
The business remains focused on the effective management of sales volumes, the gross profit margin and other operating costs to
achieve the regional operating profit margin target of 10%.
In the international segment, an oversupply of deciduous fruit products driven by softer global demand is creating downward pressure
on volumes and prices. However, shipments of RFG's deciduous fruit products are gaining momentum after the first-half delays,
which is expected to support higher international revenue in the second half of the year.
While the climatic conditions impacting pineapple production in Eswatini are improving, the recovery is expected to take longer than
initially anticipated and will likely impact the performance of the international segment for the remainder of the financial year.
Any reference to future performance included in this announcement has not been reviewed or reported on by the Group's independent auditor.
Interim cash dividend declaration
The board of directors has declared a gross dividend of 29.6 cents per share in respect of the six months ended 30 March 2025 for
holders of ordinary shares.
The dividend has been declared out of income reserves. A dividend withholding tax of 20% will be applicable to all shareholders who
are not exempt, resulting in a net dividend to these shareholders of 23.68 cents per share.
Shareholders are advised of the following salient dates in respect of the dividend declaration:
Last day to trade to receive a dividend Tuesday, 1 July 2025
Shares commence trading "ex" the dividend Wednesday, 2 July 2025
Record date Friday, 4 July 2025
Dividend payment to shareholders Monday, 7 July 2025
Share certificates may not be dematerialised or rematerialised between Wednesday, 2 July 2025 and Friday, 4 July 2025, both days included.
The number of ordinary shares in issue at the date of declaration is 262 762 018.
Pieter Hanekom Tiaan Schoombie
Chief Executive Officer Chief Financial Officer
Groot Drakenstein
21 May 2025
This results announcement is the responsibility of the Group's directors and is a summary of the information in the detailed interim
results and does not contain full or complete details. The full results are available on the JSE's cloudlink at
https://senspdf.jse.co.za/documents/2025/jse/isse/RFG/Interim25.pdf and on the Group's website at http://www.rfg.com/investor-relations.
Any investment decisions in relation to RFG's shares should be based on the full results.
Review report
The group's auditors, Ernst & Young Inc. (EY), were engaged to conduct a voluntary review of the condensed consolidated financial
statements. EY issued an unmodified review conclusion on the condensed consolidated financial statements.
Directors
Independent non-executive
Dr YG Muthien (Chairperson)
T Blok (appointed 9 December 2024)
S Maitisa
SV Naidoo
BN Njobe
Non-executive
ZR Angamia (appointed 9 December 2024)
GJH Willis
Executive
WP Hanekom (Chief Executive Officer)
CC Schoombie (Chief Financial Officer)
CL Smart and TP Leeuw resigned as non-executive directors on 9 December 2024 and 19 March 2025 respectively.
Sponsor
Rand Merchant Bank, a division of FirstRand Bank Limited
Date: 21-05-2025 07:05:00
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