Frozen food heats up Rainbow

Johannesburg - Poultry group Rainbow Chickens (RBW) on Thursday reported that its diluted headline earnings per share for the six months ended September 2009 were at 58.0 cents compared to the 43.3 cents reported in 2008.

The group declared an interim dividend of 28 cents per share.

Revenue for the period was at R3.4bn, up from the R3.3bn reported before.

Operating profit for the period was at R248.7m, up 42.3% from the R174.8m reported in 2008.

Despite the recession and softer demand for grocery products, Rainbow has continued to roll out added value and core product innovations, the group said.

"In the past two months several crumbed products through the Farmer Brown brand have been launched, as well as Rainbow Fingers which will compete with the fish finger market, which remains a significant category in crumbed frozen food.

"Rainbow has doubled its volumes in crumbed frozen foods over the last year, while competitor brands' share has declined.

"Rainbow's strategy has effectively delivered an acceptable margin during a period of extreme input cost pressures, while the processing plants and feed mills have remained focused on operational efficiencies and quality with great success," said CEO Miles Dally.

Rainbow Family Polony was launched during the last six months and has already established itself as a significant player in the polony category, adding to Rainbow's existing Simply Chicken brand leadership.

The foodservice market remains in a slower growth pattern as a consequence of the economic slowdown, said Rainbow.

"Rainbow has continued to invest in this important area of the business to enable future anticipated growth," it said.

The group noted that challenges in agricultural performance had been experienced during the winter months, particularly in the Cape.

- I-Net Bridge