RCL FOODS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1966/004972/06)
ISIN: ZAE000179438
Share Code: RCL
(“RCL FOODS" or “the Group”)


TRADING STATEMENT – YEAR ENDING JUNE 2024


In accordance with the JSE Limited Listings Requirements,
shareholders of RCL FOODS are advised that it expects its headline
earnings per share (“HEPS”) from total operations* for the
financial year ending June 2024 (“current period”) to be at least
75.0% higher than the reported HEPS of 68.3 cents for period ended
June 2023 (“prior period”), an increase of at least 51.2 cents per
share. The expected improvement in headline earnings is driven
largely by Rainbow and Groceries.   Earnings per share (“EPS”) from
total operations for the current period is expected to be at least
125.0% higher than the reported EPS of 69.3 cents for the prior
period, an increase of at least 86.6 cents per share.


The difference between HEPS and EPS in the current period largely
relates to the profit on disposal of the Vector segment and
insurance proceeds in respect of the fire damage at our Komatipoort
raw sugar warehouse which occurred during the 2022 financial year.
Both of these items are excluded from the calculation of headline
earnings.


Value-added Business
Within the Value-added Business division, Groceries results
improved mainly due to the restoration of Pet Food volumes
following loadshedding induced service level challenges in the
prior period, combined with improved margins. Baking remains under
pressure due largely to the performance of the Bread, Buns and
Rolls operating unit which continues to operate in a highly
competitive trading environment leading to volume and margin
pressure. Sugar continues to deliver a strong operational
performance as well as benefitting from high international prices.


Rainbow
In light of Rainbow’s imminent unbundling and separate listing
(shareholders are referred to the announcements released on the
Stock Exchange News Service of the JSE (“SENS”) on 4 June 2024 and
10 June 2024), this trading statement includes additional
commentary on Rainbow’s recent trading performance.


At this stage, Rainbow expects EBITDA performance of the underlying
business in the second half of the 2024 financial year to be
broadly in line with performance for the six months to December
2023. Although seasonality, and the December festive season in
particular, typically results in stronger trading in the first half
of the financial year, Rainbow experienced a continuation of the
positive momentum highlighted in the Group results announcement for
the six months ended December 2023 and the impact of Avian
Influenza (“AI”) was mostly contained to the first half of the
year. Several key factors impacted Rainbow’s financial performance
in the second half of the current period including:


 •   Agricultural key performance indicators continue to show
     improvements across feed conversion ratio, mortality and breed
     performance, all contributing to lower input costs;
 •   Continued benefits from cost control measures implemented as
     part of the turnaround strategy;
 •   Despite weaker consumer demand resulting in a softening of
     pricing and lower Quick Service Restaurant volumes in more
     recent months, retail and wholesale volumes continued to
     increase;
 •   Feed costs in the second half of the financial year began to
     rise on the back of higher local maize prices following
     concerns of drier weather conditions experienced during key
     growing periods. Rainbow continued to apply its approved
     hedging and procurement strategy to manage the impact of
     commodity price pressures;
 •   The external feed business benefited from improved external
     margins, but volumes came under pressure due to AI and strong
     market competition; and
 •   The AI outbreak reported on in the RCL FOODS results
     announcement for the six months ended December 2023 has been
     largely contained.


*The information provided in this trading statement relates to
total operations, being the total of continuing and discontinued
operations. Discontinued operations include the Vector segment
which was classified as discontinued in the prior period and
disposed of in the first half of the current period, and the
Rainbow segment which was classified as discontinued in the current
period. Continuing operations relates to the remaining RCL FOODS
business, post the Vector exit and upcoming Rainbow unbundling.
This largely comprises the Value-Added Business division,
consisting of the Groceries, Baking and Sugar segments and the
shared services division which is housed within the Group segment.


The Group’s financial results for the current period are expected
to be released on SENS on 2 September 2024. A further trading
statement will be issued as soon as the Group has a reasonable
degree of certainty as to the expected HEPS and EPS ranges for the
current period.
The financial information on which this trading statement is based
has not been reviewed and reported on by the Group’s external
auditors and is the responsibility of the directors.




Durban
24 June 2024


Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)