RFG Flash Note
​ RFG reported H2 16A HEPS of ZAR 0.79/share (+56% y/y), beating
consensus by 4.6% and ACe by 4.3%. This is despite a revenue miss of
4.5% vs consensus and 6.5% vs ACe. FY 16A HEPS of ZAR 1.27/share
was 2.8% above BBG consensus and 2.7% above ACe.
ï‚· EBIT margin was solid at 14.2% in H2 16A, 200bps above consensus
and 270bps above ACe. EBIT margin expansion of 350bps y/y is a
positive surprise.
 RFG plans to expand its presence in Sub-Saharan Africa. RFG’s is
doing well to integrate acquisitions and should continue its
aggressive acquisitive strategy in our view, as EBIT margins are above
the group’s c.10% medium term target (FY 16A at 11.9%).
Rhodes Food Group Holdings Limited is engaged in production of convenience meal solutions in fresh, frozen and long life product formats. The Company's operating segments include Regional and International. It also manufactures fresh and frozen ready meals, pastry-based products, canned jams, canned fruits, canned and bottled salads and vegetables, canned meat, fruit purees and concentrates, juice and juice products and dairy products. Its geographical segments include Republic of South Africa and Kingdom of Swaziland. Its Regional segment includes Fresh products and Long life products. Its International segment includes Long life products. Its businesses include Long Life Foods, Long Life Beverages, Commercial and Fresh Foods. The Long Life Foods include meat products, pineapple, salads and pickles. The Long Life Beverages business consists of juice products, and pulps and purees. The Fresh Foods division produces pies and pastries, dairy products, snacking and baking, among others.
Established in 2007, Arqaam Capital is a specialist emerging markets investment bank, bringing regional and international product offerings to the emerging markets. Arqaam Capital combines international best practice with expertise in the markets in which we operate. Our primary role is to provide financial intermediation and create investment opportunities for frontier and emerging markets investors looking to invest in their own markets and abroad, as well as international investors seeking opportunities in target frontier and emerging markets. Arqaam Capital is headquartered in the Dubai International Financial Centre (DIFC), with additional offices in Libya, Lebanon, Egypt, and South Africa.
Arqaam Capital's research platform provides the largest coverage footprint of MENA equities and one of the largest on the African continent with a total of 300 stocks under coverage. Arqaam Capital is ranked as one of the leading research providers in the region - a reflection of its broad coverage universe, its in-depth and high quality research, as well the compelling investment ideas that the team generates. The analysts closely analyze their sectors and issue in-depth company and sector research while the strategy team connects the micro with the macro, focusing on index analysis, macroeconomics and strategy research.
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