Rhodes Food plans payout on profit rise
Directors of the recently listed group said that they planned to declare the first dividend for the financial year to September, payable early next year, based on a dividend cover ratio of three times diluted headline earnings per share.
Profit after tax soared 52.6% as the group increased market share in key product categories. There was also "significant growth" in wholesale and sub-Saharan African markets. Gross profit rose by 12.9% to R357m.
The international segment's revenue was negatively affected by a shift in the timing of export shipments compared with last year, and a rise in canned fruit volumes into the regional business.
The group's gross profit margin was constant at 27.6%, with an increase of 350 basis points in the regional segment offset by the lower margin in the international business.
Management said that it continued to target a gross margin above 30% in the medium term.
It said operating costs, excluding listing costs, grew 16.2% as it continued to increase investment in marketing and advertising, and to increase capacity in its commercial division.
The operating margin on a normalised basis, excluding listing costs, improved from 9.3% to 9.7% through the continuing turnaround at Bull Brand and further operating efficiency gains.
Capital expenditure showed a significant increase to R90m from R23m. This was invested mainly in fruit production facilities in Tulbagh and Swaziland, upgrading the meat production plant and installing and upgrading generators.