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RFG Turnover Up 8% with Strong Regional Long Life Sales

RFG increased turnover by 8.0% for the first five months of the 2019 financial year. Turnover in the regional segment, which includes South Africa and the rest of Africa, rose by 8.2% despite the continued challenging trading environment. International turnover increased by 6.7% as export volumes grew by 4.5%.

CEO Bruce Henderson said the regional long life business grew strongly by 12.7%, with volume growth of 10.2%. “The main categories driving this performance were fruit juices, dry foods and canned meat which has shown an encouraging recovery. It is also pleasing that the group’s brands have gained or maintained market share across core product categories,” he said.

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.

Henderson said 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 international margin has continued to improve, 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,” he said.

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