RHODES FOOD Into its stride

Rhodes Food Group listed in October 2014 with the promise of strong organic and acquisitive growth. It is a promise the 104year-old food manufacturer is living up to in style.

Rhodes’ headline EPS (HEPS) bounded ahead in its year to September 4, lifting 40,5%. More of the same appears to lie ahead.

“The listing has positioned us to invest,” says Rhodes CE Bruce Henderson. “We have reduced our borrowings by R250mR300m [40%-45%].”

The reduction in debt alone should ensure another surge in HEPS in Rhodes’ year to September 2015. “According to our calculation, the reduction in the interest bill amounts to 30c/share in additional earnings,” says Richard Middleton, manager of Investec Emerging Companies Fund. An additional 30c would result in HEPS almost doubling from 36,8c in 2013/2014.

It would also cut Rhodes’ current heady 35,5 p:e to a more modest 23,4 p:e, slightly above the JSE food producer sector average 20,3 p:e.

Rhodes snapped up Pacmar, a Wellington fruit juice producer, acquired on a 10 p:e in a cash