Our opinion on the current state of RFG

Rhodes (RFG) is a Western Cape manufacturer of convenience foods - started by Cecil John Rhodes in 1896. It has several well-known South African brands like Bisto, Bull Brand and Hinds. It has 15 manufacturing plants in South Africa and a fruit processing plant in Swaziland. In its results for the year to 1st October 2023 the company reported revenue up 8,7% and headline earnings per share (HEPS) up 35,3%. The company's debt-to-equity ratio improved to 21,3% from 36,2%. Price inflation was 12,9%. The company said, "Slower consumer spending and competitor promotional activity resulted in volume pressure in certain product categories as total group volumes declined by 8.3%. The rate of volume decline slowed as the year progressed, with regional volumes down 6.6% for the full year after declining by 8.0% for the first half". Technically, the share has fallen from a high of 2900c in October 2016 in a bear trend. We suggested that you wait for it to break up through its long-term downward trendline - which happened on 13th November 2023 at a share price of 1220c. It is on a P:E of 6,52 - which looks very reasonably priced, even cheap. We believe that the share will recover over time as the economy and rand improves and as the war in Ukraine is resolved. Sales of tinned foods to China declined sharply in the short term.