JSE-listed RCL Foods, which is set to spin Rainbow Chickens out of its stable and list it on the bourse on July 26 is expecting headline earnings per share (HEPS) to be 75% higher for the year to June.
RCL Foods yesterday said this expected earnings surge would be mostly driven by Rainbow Chickens and its groceries units.
In a trading statement, RCL said earnings per share across all its operations should be at least 125% higher year-on-year when compared with the 69.3 cents per share reported in 2023.
The difference between the two measurements, it said, was that HEPS stripped out the profit on the sale of the Vector segment and insurance proceeds in respect of the fire damage at its Komatipoort raw sugar warehouse, which occurred during the 2022 financial year.
The food producer’s groceries unit saw gains mostly because of pet food volumes being restored after challenges related to load shedding in the previous year.
Pet foods also saw improved margins, while sugar continued to deliver a strong performance and benefited from high international prices.
However, baking remained under pressure because its bread, buns, and rolls unit was operating in a “highly competitive trading environment leading to volume and margin pressure”.
RCL said Rainbow’s performance in the second half of the year on an earnings before interest, tax, depreciation and amortisation will be similar to that of the first half of R270.6 million.
It added that the Avian Influenza was mostly contained to the first half of the year, which was usually its strongest period.
RCL, which will issue an updated trading statement as soon as it has a better indication of earnings, expects to release its results on September 2.