RAINBOW CHICKEN LIMITED - TRADING UPDATE AND CAUTIONARY ANNOUNCEMENT
(Incorporated in the Republic of South Africa)
(Registration number: 1966/00497/06)
ISIN: ZAE000019063
Share Code: RBW
("Rainbow" or "the Company")
TRADING UPDATE AND CAUTIONARY ANNOUNCEMENT
Shareholders are advised that the Company is currently finalising its results
for the six months ended 30 September 2003, which will be released on 21st
November 2003.
As indicated in the Company"s Annual Report dated 14 May 2003 under the
Prospects section:
Any operating profit growth will be materially impacted both by not having the
benefit of the previous year"s non-recurring items, and by a return to a tax
paying position during the course of the year, resulting in a reduction in
headline earnings.
The Company"s performance in the first half of the current financial year is
expected to be in line with the above comments. Performance departures in the
period compared to the same period in the previous year are:
Feed costs have reduced materially over the six month period. The positive
impact of the lower feed costs on earnings is, due to the unwinding of hedging
activities, expected to be lower in the first half of the financial year than in
the second half. Chicken price realisations are slightly lower, the impact of
which has been offset by a mix improvement.
The operating profit before interest for the first half will, after adding back
a trademark impairment charge in the comparative period, reflect a marginal
increase over the prior period.
An improved cash flow and cash position has resulted in a substantial increase
in interest received and profit before taxation will be substantially higher.
The effective taxation rate, including a provision for deferred taxation and
STC, is expected to amount to approximately 35,2% (2002: 7,5%).
As a consequence of the above, headline earnings are expected to be materially
lower.
The financial information on which this trading statement is based has not been
reviewed or reported on by the Company"s auditors and shareholders are therefore
advised to exercise caution in trading in the Company"s shares until the results
are published.
Durban
7th November 2003
Merchant Bank and Sponsor:
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
Date: 07/11/2003 05:16:02 PM Produced by the JSE SENS Department
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