Rainbow - Voluntary Trading Statement
RAINBOW CHICKEN LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1966/004972/06)
ISIN: ZAE000019063
Share Code: RBW
(`Rainbow` or `the Company`)
VOLUNTARY TRADING STATEMENT
Despite previous expectations expressed in the interim announcement published in
November 2004 that there would be continued earnings growth, albeit at a slower
rate than in the previous year, shareholders are advised that earnings per share
and headline earnings per share for the year ending 31 March 2005 are likely to
be lower than the previous year. Although the difference is unlikely to reach
the percentage beyond which the JSE Securities Exchange South Africa Listing
Requirements oblige a company to issue a trading statement, i.e. 20%, the
Rainbow board views the difference to be important enough to be made the subject
of a trading statement. Due to the current volatility of, inter alia, the maize
price, which is one of the influencing factors mentioned below, it is difficult
to give a more specific range.
The factors giving rise to this are largely twofold:
Firstly, during the trading period from November 2004 to January 2005, Rainbow
experienced negative bird performance in its broiler operations across all three
regions. The cause has now been identified and the problem resolved, but it will
adversely impact on earnings for the current year. It should be noted however,
that the matter has been handed over to the Company`s insurance brokers.
Secondly, in light of the declining maize price and exposure to certain long
maize positions, there will be an unrealised loss on the valuation of specific
financial instruments required to be valued in terms of AC133 (Financial
Instruments: Recognition and Measurement). Management have executed and remain
comfortable with the Company`s overall maize procurement strategy and repeat
their previous comment that the valuation of only certain procurement
instruments in terms of the application of AC133 introduces volatility to the
reported results.
The forecast financial information on which this trading statement is based has
not been reviewed and reported on by the Company`s auditors.
Durban
7 February 2005
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
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