RFG’s 2025 profit hit by impairments and export woes, but regional business holds firm

Key topics:Profitability dragged down by international revenue drop and a R104m impairment.Regional segment grows 4.1%, with strong gains in fresh foods and ready meals.Premier Group proposes full acquisition of RFG, paving the way for a JSE delisting.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..BizNews Reporter.RFG Holdings Limited (RFG) concluded its financial year ended September 28, 2025, reporting mixed operational results characterised by solid growth in its dominant regional market juxtaposed with severe underperformance in its international segment and a subsequent decline in overall profitability. Group revenue for the year increased by 1.6% to R8.1 billion. However, the Group failed to achieve its medium-term targets, owing mainly to the weaker international segment performance and a significant impairment loss in the regional segment. Following the close of the financial year, the company announced that Premier Group Limited intends to acquire all issued shares in RFG via a scheme of arrangement, leading to its delisting from the JSE Limited.The Bad: Profitability and international woesThe most significant negative outcomes were reflected in overall profitability metrics and international operations. Headline earnings fell 9.7% to R521 million, and headline earnings per share (HEPS) declined 10.3% to 199.2 cents. Earnings per share (EPS) saw an even steeper reduction, decreasing 21.8% to 170.4 cents [8, 25.2]. Consequently, the total dividend per share was cut by 10.4% to 99.6 cents.The Group's financial results were heavily impacted by the R104 million impairment loss recognised in the regional segment against the Meat Products cash-generating unit (CGU). This impairment was attributed to the meat products operation's underperformance, stemming from slower demand and lower margins.The International segment proved to be the primary drag on Group performance. International revenue declined sharply by 7.9%, resulting in a R102 million drop in operating profit to R87 million. The international operating profit margin consequently halved, reducing from 11.4% to 5.7%. This severe decline was driven by challenging market conditions, including a global oversupply of deciduous fruit products leading to weaker demand. The segment was also negatively affected by Rand strength and continued uncertainty regarding trade tariffs impacting shipments to customers in the United States.The Group's debt position worsened slightly, as net debt increased by R203 million to R660 million. The net debt to equity ratio rose from 11.9% to 16.9% [2, 10, 29.8]. Net cash inflow from operations also declined by 17.3% to R655 million, partly due to the timing of three provisional tax payments made during the year..The Good: Regional resilience and market share gainsRFG's Regional segment, which accounted for 81% of total Group revenue (up from 80% in 2024), demonstrated significant resilience in an environment of constrained consumer spending and weak sentiment. Regional revenue increased by 4.1% to R6.6 billion. Excluding the R104 million impairment loss, the normalised regional operating profit margin declined only marginally to 10.4% (compared to 10.6% in 2024).The regional Fresh foods category was a standout performer, increasing revenue by 7.4%. This growth was underpinned by a resilient performance in the pie category and good revenue and volume growth in ready meals. The Group successfully recorded market and brand share gains in key product categories. Its portfolio includes market-leading brands such as Rhodes, Bull Brand, Today, and Mama’s Pies. Dry foods and fruit juice categories also continued to deliver strong volume and revenue growth, aligning with the Group’s strategy of focusing on growth categories.Despite the overall pressure on margins (Group operating profit margin fell 230 basis points to 8.3%), RFG maintained compliance with all financial covenants related to its debt package (Net debt: EBITDA and EBITDA: Interest expense) [29.9].RFG's ability to maintain strong regional revenue growth and market share gains, even while facing internal setbacks like the meat product impairment, suggests that the underlying business model remains robust, particularly within the domestic market. However, the international segment remains vulnerable, with management expecting continued pressure on volumes and prices due to oversupply and tariff uncertainty. The future direction of RFG is now tied to the Premier Group acquisition, subject to shareholder and regulatory approvals..Read the results in full by downloading the PDF below

RFG’s 2025 profit hit by impairments and export woes, but regional business holds firm

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