RCL FOODS' financial results reveal challenges in South Africa's economic landscape

RCL FOODS, the grocery brands, baking and sugar group, managed to lift headline earnings a share by a healthy 14% in the year to June 30, but negative general sales volume growth towards the end of the second half was of concern, CEO Paul Cruickshank said Friday.

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In the past year, strong earnings from the group, with brands such as Nola, Ouma, and Smarties, came primarily from marginally higher sales and cost savings. Some two months into the new financial year, sales volume growth remained weak and unlikely to change in the next six months, at least, Cruickshank said in an interview on Monday.

The results are in an environment of falling consumer sentiment in South Africa, driven in part by uncertain global trade and political relations, lacklustre gross domestic product growth, and sustained high unemployment rates.

The group tackled the impact of muted sales volumes by a deliberate effort to restore margins that had been compromised over a protracted period by pressures from input costs and load-shedding.