Rhodes Food Group (RFG) – FY19 HEPS Update

Without the boost of inorganic growth, RFG managed to deliver a decent topline. Our updated forecasts for FY19, however, reflect the likely impact of the promotionally driven retail market. Worryingly, RFG’s Fresh division showed weakness and we believe that growth in this division is somewhat constrained by Woolworths Foods’ slow expansion pipeline. Our GPM forecasts for FY19 show an improvement on 1H19; however, for RFG’s GPM to return to above 27%, we believe a consumer confidence/spending rebound is necessary.