Shares in food producers used to be seen as a defensive investment with modest, stable and fairly boring returns. People have to eat, even when the economy slows down. They do not necessarily eat more when incomes increase.
But things have changed. One only needs to look at RCL Foods and its latest results to realise how closely the fortunes of today’s food companies are linked to the economy as a whole.
RCL posted a decrease of 25% in earnings before interest, taxes, depreciation and amortisation (Ebitda) and a decrease of 61% in headline earnings per share in the financial year to end June due to the bad performance of its chicken and sugar businesses. Its branded food businesses, however, achieved excellent performance.
Read more news on Citizen News