RFG Holdings Limited Anticipates 18-23% Surge in Earnings for Q1 2024 Despite International Segment Challenges

  • RFG Holdings Limited's headline earnings are expected to rise by 18% to 23% for the period ending March 31, 2024.
  • Regional revenue growth was driven by price inflation, while the international segment faced challenges like softer global pricing.
  • Operating profit margins improved due to profitable growth strategies, cost management, and operational efficiencies.

RFG Group

RFG Holdings Limited has recently released its trading statement for the six months ending on March 31, 2024. This statement provides a glimpse into the company’s financial performance, highlighting key areas of growth and challenges faced.

Financial Overview

The company’s headline earnings for this period are expected to be between 18% and 23% higher than the previous year. This indicates a robust growth trajectory and reflects positively on RFG’s operational strategies.

Revenue Growth and Regional Segment Analysis

One of the key drivers of revenue growth for RFG was price inflation in the regional segment. Despite lower sales volumes in certain product categories due to a weak consumer environment, the regional segment showed resilience.

Metrics6 months ended 2 April 2023 Reported6 months ended 31 March 2024 Expected Range
Earnings per share (EPS)83.3c98.3c – 102.5c
Headline earnings per share (HEPS)83.2c98.2c – 102.3c
Diluted HEPS82.9c97.8c – 102.0c

International Segment Challenges and Strategies

While the regional segment saw growth, the international segment faced challenges. Factors such as softer global pricing, lower stock levels, and operational issues at the Cape Town port contributed to a decline in international revenue.

Operating Profit Margin Improvement

Despite challenges, RFG managed to improve its operating profit margin compared to the prior period. This improvement was driven by several factors, including:

  1. Profitable growth strategies.
  2. Efficient management of inflationary increases in raw material and packaging costs.
  3. Cost savings from operational efficiencies.
  4. Production efficiency gains from recent capital investments.

International Segment’s Profit Margin Strengthening

The international segment also saw improvements in its operating profit margin. This was attributed to:

  1. Improved factory efficiencies during the deciduous fruit canning season.
  2. Capital investments at the Tulbagh fruit products factory.
  3. Weakening of the Rand against RFG’s trading currencies, leading to foreign exchange gains.

Conclusion

RFG Holdings Limited has demonstrated strong financial performance in the first half of 2024. Despite challenges in the international segment, the company’s focus on profitable growth, cost management, and operational efficiencies has yielded positive results.

Investors can look forward to the release of RFG’s interim financial results in late May 2024, which will provide more detailed insights into the company’s performance and future outlook.


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