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RHODES FOOD GROUP HOLDINGS LIMITED - Condensed consolidated financial statements for the six months ended 31 March 2019

Release Date: 21/05/2019 07:05
Code(s): RFG     PDF:  
Wrap Text
Condensed consolidated financial statements for the six months ended 31 March 2019

RHODES FOOD GROUP HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number 2012/074392/06
JSE share code: RFG
ISIN: ZAE000191979

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 31 March 2019

 
KEY FEATURES  

Group turnover         
  +  9.3%

Regional turnover       
  +  8.8%

International turnover         
  +  12.3%

Operating profit       
  +  6.0%

Headline earnings     
  +  2.1% 

Diluted HEPS       
  +  2.2% to 32.1 cents


COMMENTARY 

PROFILE 
Rhodes Food Group ("the Group") is a leading producer of fresh, frozen and long life convenience meal solutions for customers
and consumers across South Africa, sub-Saharan Africa and in major global markets. The portfolio of market leading brands,
which includes Rhodes, Bull Brand, Magpie, Squish, Bisto, Hinds and Pakco, is complemented by private label product ranges
packed for all major South African retailers and international customers.


TRADING AND FINANCIAL PERFORMANCE
Group turnover for the six months increased by 9.3% to R2.7 billion.

Turnover in the regional segment (South Africa and the rest of Africa) increased by 8.8%, driven by volume growth of 7.3%, and
accounted for 83% of total turnover. 

-  Long Life Foods increased turnover by 13.4% (9.2% volume growth) with strong performances in fruit juice, dry foods (formerly
   Pakco), canned vegetables and the meat category which showed an encouraging recovery.
-  The Group's brands have gained or maintained market share across core product categories. 
-  Fresh Foods sales increased by 1.9% on flat volumes, with ready meals and the pie category proving resilient in the current
   consumer environment. The turnaround in Ma Baker has been completed.

International turnover increased by 12.3%, benefiting from the weaker Rand and growth in export volumes of 2.7%. 

The Group's gross profit increased by 8.1% to R685.3 million. The gross profit margin was slightly lower at 25.0% (2018: 25.3%).
The margin was negatively impacted by approximately R23 million relating to the lower international selling prices of deciduous
canned fruit products as a result of drought-related quality issues, and once-off costs of approximately R14 million arising from the
relocation of the pulps and purees plant from Wellington to Groot Drakenstein. The business experienced further margin pressure
due to low levels of inflation. These pressures were partially offset by tailwinds of approximately R22 million from the weakening
currency. 

Operating costs were contained to an increase of 5.8% despite the higher depreciation charges arising from the increased capital
expenditure over the past two years. 

The Group's operating profit increased by 6.0% to R172.7 million while the operating margin declined by 20 basis points to 6.3%.
The regional operating margin was diluted by the impact of the once-off costs arising from the relocation of the pulps and purees
plant, low selling price inflation and higher depreciation costs, reducing from 7.8% to 7.4%.

The international operating margin improved from -0.3% to 0.8% as the segment benefited from the 10.5% weakening in the value
of the Rand against the Group's major trading currencies. Profitability was materially impacted by the drought-related impact on
costs and quality of canned fruit.

Headline earnings increased by 2.1% to R84.1 million, with diluted headline earnings per share 2.2% higher at 32.1 cents.

The heightened focus on working capital management is reflected in the increase in net working capital being contained to 2.4%,
with inventory levels 1.7% lower. Net working capital days improved to 129 days from 139 days in the previous year.

The improvements in working capital management and lower capital expenditure contributed to stronger cash flows. The Group's
net debt to equity ratio improved to 58.9% from 60.4% at the end of March 2018.

The Group invested R129 million (2018: R268 million) in capital projects in the first half of the financial year. These included the
completion of the relocation of the pulps and purees plant, the expansion of the Western Cape ready meals facility and the site
upgrade at the Groot Drakenstein production hub.

OUTLOOK
The Group anticipates a strong second half performance despite consumer spending being expected to remain under severe
pressure in the months ahead.

The focus in the regional segment will continue to be on driving organic growth, growing brand shares and on improving margins.
The acquisition of RCL's protein snack business has been completed and integrated into the Group's Western Cape ready
meals facility.

The international segment is expected to continue to improve its operating margin in the second half of the financial year.
The deciduous fruit production season (canned fruit, pulps and purees) has recently been completed and initial assessments
reflect an improvement in the quality of the fruit after being affected by the drought for the past two years. Volumes were, however,
slightly lower than the previous year.

Following the completion of the major capital investment programme, the Group is focused on generating returns on the
capital invested and extracting benefits to improve margins. Other management priorities are to improve the balance sheet by
generating stronger cash flows, a continued focus on working capital management and containing costs in the constrained
consumer environment.

Capital investment of R80 million is planned for the second half of the financial year. Key projects include the expansion of
warehouse capacity at the fruit juice plant, ongoing development of the new pineapple plantations in Eswatini and the completion
of the infrastructure upgrade at Groot Drakenstein.

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


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 March 2019
                                                                                              Reviewed          Reviewed                    
                                                                                             Six-month         Six-month            Audited
                                                                                          period ended      period ended         Year ended
                                                                                              31 March           1 April       30 September
                                                                                                  2019              2018               2018
                                                                              Notes              R'000             R'000              R'000
ASSETS                                                                                                                                     

Non-current assets                                                                           2 513 627         2 333 815          2 444 595
Property, plant and equipment                                                     3          1 819 937         1 658 574          1 776 614
Intangible assets                                                                              222 895           202 490            197 691
Goodwill                                                                                       444 857           444 857            444 857
Investment in associate                                                                          5 253             5 740              5 335
Biological assets                                                                               12 501            10 760             12 047
Deferred taxation asset                                                                             36             2 688                 41
Loans receivable                                                                                 8 148             8 706              8 010

Current assets                                                                               2 395 762         2 259 795          2 138 950
Inventory                                                                         4          1 369 156         1 393 491          1 227 748
Accounts receivable                                                                            977 870           779 390            810 216
Biological assets                                                                               17 099            10 553             13 622
Loans receivable                                                                                 3 490             4 123              4 210
Taxation receivable                                                                              9 123            40 804             48 175
Foreign exchange contract asset                                                                  5 551            14 237                633
Bank balances and cash on hand                                                                  13 473            17 197             34 346

Total assets                                                                                 4 909 389         4 593 610          4 583 545

EQUITY AND LIABILITIES                                                                                                                     

Capital and reserves                                                                         2 342 600         2 239 771          2 317 840
Share capital                                                                                1 562 509         1 565 509          1 565 509
Equity-settled employee benefits reserve                                                        14 052            13 189             17 723
Accumulated profit                                                                             757 578           652 025            725 459
Equity attributable to owners of the company                                                 2 334 139         2 230 723          2 308 691
Non-controlling interest                                                                         8 461             9 048              9 149

Non-current liabilities                                                                      1 097 137           847 135          1 198 836
Long-term loans                                                                                864 765           650 635            974 933
Deferred taxation liability                                                                    215 031           180 928            207 653
Employee benefit liability                                                                      17 341            15 572             16 250

Current liabilities                                                                          1 469 652         1 506 704          1 066 869
Accounts payable and accruals                                                                  877 817           737 597            700 620
Employee benefits accrual                                                                       55 616            50 134             54 647
Current portion of long-term loans                                                             241 546           237 327            250 918
Taxation payable                                                                                 7 464               258              2 562
Bank overdraft                                                                                 287 209           481 388             58 122

Total equity and liabilities                                                                 4 909 389         4 593 610          4 583 545

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the six-month period ended 31 March 2019
                                                                                              Reviewed          Reviewed                    
                                                                                             Six-month         Six-month            Audited
                                                                                          period ended      period ended         Year ended
                                                                                              31 March           1 April       30 September
                                                                                                  2019              2018               2018
                                                                                                 R'000             R'000              R'000

Revenue                                                                                      2 741 446         2 507 375          5 109 342
Cost of goods sold                                                                         (2 056 158)       (1 873 723)        (3 839 637)
Gross profit                                                                                   685 288           633 652          1 269 705
Other income                                                                                    21 120            36 275             35 621
Operating costs                                                                              (536 708)         (507 193)          (991 308)
Profit before interest and taxation                                                            169 700           162 734            314 018
Interest paid                                                                                 (59 318)          (51 855)          (115 123)
Interest received                                                                                1 271                93              2 189
Profit before taxation                                                                         111 653           110 972            201 084
Taxation                                                                                      (31 466)          (30 107)           (46 756)
Profit for the period                                                                           80 187            80 865            154 328
Profit attributable to:                                                                                                                  
Owners of the company                                                                           80 875            81 068            154 430
Non-controlling interest                                                                         (688)             (203)              (102)
                                                                                                80 187            80 865            154 328
Other comprehensive income                                                                                                               
Items that will not be reclassified subsequently to profit or loss                                   -                 -                 72
Remeasurement of employee benefit liability                                                          -                 -                100
Deferred taxation effect                                                                             -                 -               (28)
Total comprehensive income for the period                                                       80 187            80 865            154 400
Total comprehensive income attributable to:                                                                                              
Owners of the company                                                                           80 875            81 068            154 502
Non-controlling interest                                                                         (688)             (203)              (102)
                                                                                                80 187            80 865            154 400
Earnings per share                                                          (cents)               30.9              32.1               61.1
Diluted earnings per share                                                  (cents)               30.9              30.9               59.0  


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six-month period ended 31 March 2019
                                                                     Equity-settled                                                
                                                                           employee
                                                             Share         benefits        Accumulated   Non-controlling                 
                                                           capital          reserve             profit          interest              Total
                                                             R'000            R'000              R'000             R'000              R'000

Balance at 1 October 2017 - audited                      1 565 509            8 779            652 326             9 251          2 235 865
Total comprehensive income for the period                        -                -             81 068             (203)             80 865
Share-based payment expense recognised                           -            4 410                  -                 -              4 410
Treasury shares dividends received                               -                -                350                 -                350
Dividend paid                                                    -                -           (81 719)                 -           (81 719)
Balance at 1 April 2018 - reviewed                       1 565 509           13 189            652 025             9 048          2 239 771
Total comprehensive income for the period                        -                -             73 434               101             73 535
Share-based payment expense recognised                           -            4 534                  -                 -              4 534
Balance at 30 September 2018 - audited                   1 565 509           17 723            725 459             9 149          2 317 840
Total comprehensive income for the period                        -                -             80 875             (688)             80 187
Share-based payment expense recognised                           -            2 885                  -                 -              2 885
Share-based payment settlement                                   -          (6 556)              4 356                 -            (2 200)
Treasury shares dividends received                               -                -                229                 -                229
Dividend paid                                                    -                -           (53 341)                 -           (53 341)
Redemption of preference shares                            (3 000)                -                  -                 -            (3 000)
Balance at 31 March 2019 - reviewed                      1 562 509           14 052            757 578             8 461          2 342 600  


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the six-month period ended 31 March 2019               
               
                                                                                              Reviewed          Reviewed                 
                                                                                             Six-month         Six-month            Audited
                                                                                          period ended      period ended         Year ended
                                                                                              31 March           1 April       30 September
                                                                                                  2019              2018               2018
                                                                               Note              R'000             R'000              R'000
Cash flows from operating activities                                                                                              
Cash generated from operations                                                                 115 999           135 754            487 517
Net interest paid                                                                             (57 626)          (51 766)          (114 441)
Taxation refunded/(paid)                                                                        19 871          (16 348)            (8 072)
Net cash inflow from operating activities                                                       78 244            67 640            365 004
Cash flows from investing activities                                                                                                       
Purchase of property, plant and equipment                                                    (128 983)         (268 475)          (479 557)
Proceeds on disposal of property, plant and equipment                                            5 849             4 865             16 202
Acquisition of intangible assets                                                  6           (30 000)                 -                  -
Loans receivable advanced                                                                            -           (3 273)            (3 273)
Loans receivable repaid                                                                            582               246                763
Dividend paid                                                                                 (53 341)          (81 719)           (81 719)
Treasury shares dividend received                                                                  229                 -                350
Net cash outflow from investing activities                                                   (205 664)         (348 356)          (547 234)
Cash flows from financing activities                                                                                                     
Redemption of preference shares                                                                (3 000)                 -                  -
Loans raised                                                                                         -            75 589            525 000
Loans repaid                                                                                 (119 540)         (105 215)          (215 567)
Government grant received                                                                            -                 -              2 870
Net cash (outflow)/inflow from financing activities                                          (122 540)          (29 626)            312 303
Net (decrease)/increase in cash and cash equivalents                                         (249 960)         (310 342)            130 073
Cash and cash equivalents at beginning of the period                                          (23 776)         (153 849)          (153 849)
Cash and cash equivalents at end of the period                                               (273 736)         (464 191)           (23 776)
               

CONDENSED CONSOLIDATED SEGMENTAL REPORT
for the six-month period ended 31 March 2019

PRODUCTS AND SERVICES FROM WHICH REPORTABLE SEGMENTS DERIVE THEIR REVENUES
Information reported to the chief operating decision-maker for the purposes of resource allocation and assessment of segment performance
focuses on the types of goods or services delivered or provided, and in respect of the 'regional' and 'international' operations. 
The information is further analysed based on the different classes of customers. The executive management of the Group have chosen to 
organise the Group around the difference in geographical areas and operate the business on that basis.

Specifically, the Group's reportable segments under IFRS 8: Operating Segments are as follows:
-  Regional
-  International



SEGMENT REVENUES AND RESULTS
The following is an analysis of the Group's revenue and results by reportable segment.

                                                                                             Reviewed           Reviewed                    
                                                                                            Six-month          Six-month            Audited
                                                                                         period ended       period ended         Year ended
                                                                                             31 March            1 April       30 September
                                                                                                 2019               2018               2018
                                                                                                R'000              R'000              R'000    
                                                                                                  
                                                                                                              Segment revenue
Regional                                                                                      
Fresh products sales                                                                          860 605            844 955          1 686 980
Long life products sales                                                                    1 419 560          1 251 622          2 433 113
                                                                                            2 280 165          2 096 577          4 120 093
International                                                                                                                              
Long life products sales                                                                      461 281            410 798            989 249
Total                                                                                       2 741 446          2 507 375          5 109 342

                                                                                                              Segment profit
Regional                                                                                      168 995            164 322            321 249
International                                                                                   3 722            (1 348)            (5 242)
Total                                                                                         172 717            162 974            316 007
Impairment loss                                                                               (3 017)                  -            (1 727)
Acquisition costs                                                                                   -              (240)              (262)
Interest received                                                                               1 271                 93              2 189
Interest paid                                                                                (59 318)           (51 855)          (115 123)
Profit before taxation                                                                        111 653            110 972            201 084

                                                                                                              Segment depreciation
Regional                                                                                       63 012             51 591            106 015
International                                                                                  12 301             13 844             31 279
Total                                                                                          75 313             65 435            137 294

                                                                                                              Segment amortisation 
Regional                                                                                        4 711              4 511              8 989
International                                                                                      85                281                602
Total                                                                                           4 796              4 792              9 591
                                                   

Segment revenue reported above represents revenue generated from external customers. Inter-company sales amounted to R275.886 million
(six months ended 1 April 2018: R271.840 million, year ended 30 September 2018 R429.312 million).

The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 1 to the condensed
consolidated financial statements. Segment profit represents the profit before tax earned by each segment without allocation of impairment
losses, acquisition costs, interest received and interest paid. This is the measure reported to the chief operating decision-maker for the
purpose of resource allocation and assessment of segment performance.



GEOGRAPHICAL INFORMATION
The Group's non-current assets by location of operations (excluding goodwill and deferred taxation asset) and revenue are detailed below.
Executive management does not evaluate any other of the Group's assets or liabilities on a segmental basis for decision making purposes.

                                                                                              Reviewed          Reviewed                    
                                                                                             Six-month         Six-month            Audited
                                                                                          period ended      period ended         Year ended
                                                                                              31 March           1 April       30 September
                                                                                                  2019              2018               2018
                                                                                                 R'000             R'000              R'000
                                                                                                                            
                                                                                                            Non-current assets
Republic of South Africa                                                                     1 924 726         1 753 647          1 860 455
Kingdom of Eswatini                                                                            144 008           132 623            139 242
                                                                                             2 068 734         1 886 270          1 999 697
                                                   
                                                                                                             Revenue
Republic of South Africa                                                                     2 680 770         2 458 651          4 970 796
Kingdom of Eswatini                                                                             60 676            48 724            138 546
                                                                                             2 741 446         2 507 375          5 109 342
INFORMATION REGARDING MAJOR CUSTOMERS
Two customers (six months ended 1 April 2018: two, year ended 30 September 2018: two) individually contributed 10% or more of the Group's
revenue arising from both regional and international sources.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the six-month period ended 31 March 2019

1.  BASIS OF PREPARATION
    Rhodes Food Group Holdings Limited is a company domiciled in the Republic of South Africa. These condensed consolidated financial statements
    as at and for the six-month period ended 31 March 2019 comprise the company and its subsidiaries (together referred to as "the Group"). 
    The main business of the Group is the manufacturing and marketing of convenience meal solutions. These include fresh and frozen
    ready meals, pastry-based products, dairy products, juice and juice products, fruit purees and concentrates and long life meals including
    jams, fruits, salads, vegetables, meat and dry packed foods. There were no major changes in the nature of the business for the Group during
    the periods ended 31 March 2019 and 1 April 2018.

    The condensed consolidated financial statements are prepared in accordance with and contain the information required by IAS34:
    Interim Financial Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, the Financial
    Pronouncements as issued by the Financial Reporting Standards Council, the requirements of the Companies Act of South Africa and the
    JSE Listings Requirements.

    During the interim period ended 31 March 2019, the Group applied the following new and revised International Financial Reporting
    Standards ("IFRS") issued by the International Accounting Standards Board ('IASB') that are mandatorily effective for accounting periods that
    begin on or after 1 January 2018.

    - IFRS 9 - Financial Instruments
      Management has classified and measured the financial assets and liabilities recognised by the Group in accordance with the requirements
      of IFRS 9. There has been no material impact as a result of adoption of the standard.

    - IFRS 15 - Revenue from Contracts with Customers
      The Group's contracts with customers do not contain multiple performance obligations which are required to be met. The Group's revenue
      recognition policies are not complex and relate to the delivery of goods to customers as a single performance obligation. There has been
      no impact as a result of adoption of the standard.

    Other than as indicated above, the accounting policies and methods of computation applied in the preparation of the condensed
    consolidated financial statements are consistent with those applied in the audited consolidated financial statements for the year ended
    30 September 2018.

    These condensed consolidated financial statements were prepared under the supervision of CC Schoombie CA(SA), Chief Financial Officer.


2.  SEASONALITY OF OPERATIONS
    The Group's performance is subject to seasonal trends based on the seasonality of fruit crops which are processed annually from November
    to April and June to August. Due to the seasonal nature of fruit production, working capital is actively managed over an annual cycle.


3.  PROPERTY, PLANT AND EQUIPMENT
    During the six-month period ended 31 March 2019 the following transactions accounted for the movement in the property, plant and
    equipment balance:

                               Opening     Loss of control                           Government                                     Closing
                               balance       of subsidiary          Additions    grant received      Disposals    Impairment        balance
COST                             R'000               R'000              R'000             R'000          R'000         R'000          R'000
31 March 2019                2 185 493                   -            128 983                 -       (14 590)       (3 017)      2 296 869
1 April 2018                 1 765 295                   -            268 475                 -       (18 148)             -      2 015 622
30 September 2018            1 765 295             (1 959)            479 557           (2 870)       (52 669)       (1 861)      2 185 493
 
                                                   Opening    Loss of control                                                       Closing
                                                   balance      of subsidiary      Depreciation      Disposals    Impairment        balance
ACCUMULATED DEPRECIATION                             R'000              R'000             R'000          R'000         R'000          R'000
31 March 2019                                      408 879                  -            75 313        (7 260)             -        476 932
1 April 2018                                       304 802                  -            65 435       (13 189)             -        357 048
30 September 2018                                  304 802            (1 398)           137 294       (31 685)         (134)        408 879

                                                   Opening                                                                          Closing
                                                   balance                                                                          balance
NET ASSET VALUE                                      R'000                                                                            R'000
31 March 2019                                    1 776 614                                                                        1 819 937
1 April 2018                                     1 460 493                                                                        1 658 574
30 September 2018                                1 460 493                                                                        1 776 614

    The disposal of property, plant and equipment resulted in a loss of R1.481 million (six months ended 1 April 2018: loss of R0.094 million,
    year ended 30 September 2018 loss of R4.782 million). The impairment of property, plant and equipment resulted in a loss of R3.017 million
    (six months ended 1 April 2018: loss of Rnil million, year ended 30 September 2018: loss of R1.727 million). These losses were recognised
    as part of 'operating costs' in the condensed consolidated statement of profit or loss and other comprehensive income.
   
    During the six-month period ended 31 March 2019, the Group contracted R32.063 million (six months ended 1 April 2018:
    R105.595 million, year ended 30 September 2018: R29.502 million) for future capital commitments.
   
    There has been no major change in the nature of property, plant and equipment, the policy regarding the use thereof, or the encumbrances
    over the property, plant and equipment.


4.  INVENTORY
    A provision of R20.518 million is included in the inventory balance as at 31 March 2019 (1 April 2018: R13.490 million, 30 September 2018:
    R20.518 million) in order to recognise inventory at the lower of cost or net realisable value.


5.  HEADLINE EARNINGS PER SHARE
                                                                                              Reviewed          Reviewed                    
                                                                                             Six-month         Six-month            Audited
                                                                                          period ended      period ended         Year ended
                                                                                              31 March           1 April       30 September
                                                                                                  2019              2018               2018
                                                                                                 R'000             R'000              R'000

5.1 HEADLINE EARNINGS PER SHARE                                                                                                       
        Reconciliation between profit attributable to owners of the parent and
        headline earnings:                                                                                                            
        Profit attributable to owners of the parent                                             80 875            81 068            154 430
        Adjustments to profit attributable to owners of the parent                               3 239             1 284              4 686
        Loss on disposal of property, plant and equipment                                        1 481                94              4 782
        Impairment of property, plant and equipment                                              3 017                 -              1 727
        Loss of control of subsidiary                                                                -             1 216              1 216
        Taxation effect                                                                        (1 259)              (26)            (1 823)
        Headline earnings                                                                       84 114            82 352            159 116
        Headline earnings per share                                             (cents)           32.1              32.6               63.0

5.2 DILUTED HEADLINE EARNINGS PER SHARE                                                                                                 
        Headline earnings                                                                       84 114            82 352            159 116
        Diluted headline earnings per share                                     (cents)           32.1              31.4               60.8
                                                                                                                                       
5.3 WEIGHTED AVERAGE NUMBER OF SHARES IN ISSUE                                                                                         
        Ordinary shares in issue at beginning of the period                                253 762 018       253 762 018        253 762 018
        Weighted number of shares issued during the period                                   9 000 000                 -                  -
        Treasury shares                                                                    (1 125 000)       (1 125 000)        (1 125 000)
        Weighted average number of shares in issue                                         261 637 018       252 637 018        252 637 018
        Effect of convertible preference shares                                                      -         9 000 000          9 000 000
        Effect of share options                                                                489 926           403 093            201 094
        Weighted average number of dilutive shares in issue                                262 126 944       262 040 111        261 838 112

6.  ACQUISITION OF INTANGIBLE ASSETS
         On 28 February 2019, the Group acquired a protein snack business from RCL Foods Consumer (Pty) Ltd for R30 million.
         The consideration paid has been allocated to intangible assets.

7.  RELATED PARTY TRANSACTIONS
         The Group generated sales from Peaty Mills Plc for R97.137 million (six months ended 1 April 2018: R86.122 million, year ended
         30 September 2018: R233.109 million). Included in trade receivables are amounts due from Peaty Mills Plc for R32.510 million (six
         months ended 1 April 2018: R34.960 million, year ended 30 September 2018: R56.098 million).

         The Group generated sales from Ma Baker Xpress (Pty) Ltd for R6.775 million (six months ended 1 April 2018: R7.147 million, year ended
         30 September 2018: R14.188 million). Included in trade receivables are amounts due from Ma Baker Xpress (Pty) Ltd for R5.626 million
         (six months ended 1 April 2018: R2.690 million, year ended 30 September 2018: R3.906 million).

         There were no other significant related party transactions during the period under review.

8.  DIVIDENDS
         On 14 January 2019, a dividend of 20.3 cents (15 January 2018: 31.1 cents) per share was paid amounting to a total dividend of
         R53.341 million (2018: R81.719 million).

9.  EVENTS SUBSEQUENT TO REPORTING DATE
         The board of directors is not aware of any matter or circumstance of a material nature arising since the end of the six-month period,
         otherwise not dealt with in the condensed consolidated financial statements, which significantly affects the financial position of 
         the Group or the results of its operations.

10. SIX-MONTH PERIOD END
         The Group's financial year ends in September which reflects 52 weeks of trading, and as a result the reporting date may differ year on
         year. References to an interim financial period are to the 26 weeks ended on or about 31 March. As a result the condensed consolidated
         financial statements were prepared for the 26 week period ended 31 March 2019 (26 week period ended 1 April 2018).

11. REVIEW REPORT
         The board of directors has elected to engage the Group's auditors, Deloitte & Touche, to conduct a voluntary review of the 
         condensed consolidated financial statements.

         The Group's auditors have issued an unmodified review conclusion on the condensed consolidated financial statements which is available 
         for inspection on the group's website (http://www.rfg.com) as well as the group's registered office (Pniel Road, Groot Drakenstein, 7680), 
         at no charge, during normal business hours. The auditor's report does not necessarily report on all of the information contained in this
         announcement. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's engagement 
         they should obtain a copy of that report together with the accompanying financial information from the group's registered office.


CORPORATE INFORMATION

Registered address               Pniel Road, Groot Drakenstein, 7680
                                 Private Bag X3040, Paarl, 7620
                                  
Directors                        Dr YG Muthien* (Chairperson)
                                 MR Bower* (Lead Independent Director)
                                 BAS Henderson (Chief Executive Officer)
                                 TP Leeuw*
                                 LA Makenete*
                                 BN Njobe*
                                 CC Schoombie (Chief Financial Officer)
                                 CL Smart**
                                 GJH Willis**
                                  
                                 * Independent non-executive
                                 ** Non-executive
                                  
Company secretary                BM Lakey
                                  
Transfer secretaries             Computershare Investor Services Proprietary Limited
                                                              
Auditors                         Deloitte & Touche

Bruce Henderson                                                     Tiaan Schoombie
Chief Executive Officer                                             Chief Financial Officer

Groot Drakenstein
21 May 2019

Sponsor                          Rand Merchant Bank, a division of FirstRand Bank Limited


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