SOUTH AFRICA – South Africa based consumer goods group, Libstar, has reported a 9.6% growth in half year revenue for the six months ended June 30 to R5.1 billion (US$288.9m).
The top-line performance was driven by 6.9% sales volume growth, with improvements recorded across all its categories, while price increases and changes in sales mix contributed 2.7% to overall sales growth.
Its perishables category, which is Libstar’s biggest, reported revenue growth of 14.6%, which was driven by strong sales of pre-packed hard cheese from its Lancewood brand.
Overall, the category posted volume growth of 6.3% and normalised Ebitda growth of 27.8% to R254-million (US$14.3m), compared with the first half of last year.
The group’s second largest category, groceries, saw revenue growth of 2.2%, and volume sales growth of 8.3% year-on-year; however, normalised Ebitda declined by 17.7% to R196-million (US$11m).
Meanwhile revenue from its snacks and confectionary category rose 11.6%, following 14% volume boost, attaining a normalised Ebitda growth of 23.2% to R51-million (US$2.89m), compared with the prior interim period.
Its baking and baking aid segment saw revenues climb 8.6% despite marginal volumes growth of 0.7%, and a normalised Ebitda decrease of 6.1% to R41-million (US$2.32m) in the six months under review.
Libstar’s diverse category-led and multichannel operating model once again proved its mettle with the company posting 14.1% year-on-year growth in normalised headline earnings per share (HEPS).
Normalised HEPS came to 35.6c, against normalised HEPS of 31.2c posted in the prior comparable interim period.
The owner of Lancewood cheese and Denny mushrooms, among other brands, increased its normalised operating profit by 10% year-on-year to R346-million (US$19.5m), and its normalised earnings before interest, taxes, depreciation and amortisation (Ebitda) by 4.6% year-on-year to R493-million (US$27.9m).
Profit after tax came to R149-million (US$18.9m), which was a 21.9% increase on the profit of R122-million (US$6.9m) in the prior comparable six months.
Commenting on the results, outgoing Libstar CEO Andries van Rensburg said, “We are very proud of delivering sound earnings growth in a context of significant inflation and extreme customer pressure.
“We were able to protect our gross margins despite the continued onslaught of raw material, packaging, utilities and freight cost increases.”
Despite these challenging conditions, Libstar launched 364 new and renovated products, compared with 316 new and renovated products launched in the prior interim period.
CFO and incoming CEO Charl de Villier highlighted that the company’s diversified brand solutions, product mix and channel exposure will leave its structural growth drivers intact.
He mentioned that Libstar will continue focusing on its value-added portfolio and explore high-growth opportunities, particularly through bolt-on acquisitions, such as that of Cape Foods and its value-added dry condiments, which the company acquired in August.
The Household and Personal Care divisions of Chet Chemicals and Contactim remain classified as for sale, as it was in the prior comparable six months.
Libstar has also classified its Glenmor Soap subsidiary as held for sale, after the group completed the exit from this investment shortly after the close of the first half of the year.
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