RCL Foods in South Africa is moving forward with the spin-off of its Rainbow Chicken business into a separate listed entity. This move comes as part of a new strategy implemented by CEO Paul Cruickshank to focus on grocery, pet food, and baked goods segments. The company has already completed the sale of its Vector logistics business segment and has decided to retain its sugar operations.
Rainbow Chicken, soon to be listed on the Johannesburg Stock Exchange, is set for a target date of 26 June. The unbundling will see existing RCL Foods shareholders receive one Rainbow share for each share they hold in the group business. The company stated that Rainbow has shown promising results in terms of profitability and operational resilience.
Under the Rainbow brand, RCL Foods supplies fresh and frozen chicken products to both retail and out-of-home channels. Recent financial results have shown an increase in group revenue and EBITDA, demonstrating the positive impact of the turnaround plan and improved operational efficiencies.
The board believes that the unbundling of Rainbow will allow both businesses to pursue their growth ambitions with improved alignment on capital allocation priorities. Despite challenges such as load-shedding and rising commodity costs, RCL Foods has shown resilience and a solid performance in its core value-added business.
In their latest annual results, RCL Foods highlighted the impact of load-shedding on operations and the pressures from commodity costs. Despite these challenges, the company remains focused on delivering strong results and adapting to changes in the market.
In conclusion, RCL Foods is navigating through challenges and opportunities in the food and beverage industry. The decision to spin off Rainbow Chicken reflects the company’s commitment to growth and focus on key business segments. As the business landscape evolves, RCL Foods continues to adapt and thrive in a competitive market.
