Premier Group posts 32.4% growth in Half-Year interim profit boosted by cost-saving initiatives

SOUTH AFRICA – Premier Group, a South African food producer, has posted a 32.4% growth in its half-year interim profit boosted by cost-saving initiatives in a challenging operating environment.

Operating profit increased by 17.3% to 945 million rand, benefiting from the suspension of load-shedding, which further improved operations in Premier’s core categories.

The maker of Mister Sweet and Manhattan confectionary brand has invested in its manufacturing capabilities by building high-volume bakeries and other modern equipment that have improved quality and cut production costs.

The Group said it has R1.1bn available for acquisitions after reporting a revenue rise marginally by 3.7%, to 9.7 billion rand ($539.38 million), despite a challenging environment marred by “high interest rates and soft commodity volatility.

The group, which vies for market share with rivals such as Tiger Brands, Pioneer Food and RCL Foods, in June acquired a 30% stake in rice importer Goldkeys International, to gain exposure to the market in the staple.

Chief Executive Officer Kobus Gertenbach told Reuters that the focus was on diversification as the company was already “a big enough player” in most of the categories it is present in.

That means it “can’t really buy someone else (in those categories) without creating some competitive issues,” he said.

Since 2011, Premier Group has invested over R6 billion in its facilities and executed several acquisitions to expand portfolio from a traditional milling and bakery business into sugar confectionery (Super C, Mister Sweet and Manhattan) and home & personal care (Lil-lets, Dove Cottons and Vulco).

“We also expanded our bakery portfolio through the acquisition of bakeries in the Eastern and Western Cape,” the company added.

 “Our acquisition strategy in the rest of Africa has expanded our portfolio in Eswatini to include bakery, milling and beverage operations, and in Mozambique to include milling, biscuits, animal feeds and pasta operations.”

Premier operates 13 bakeries, 7 wheat mills, 3 maize mills, and manufacturing plants across the region producing a broad range of sugar confectionery products, feminine hygiene products, biscuits, animal feeds, pasta and mageu.

These products are distributed to its customers via 28 distribution depots situated in South Africa, Eswatini, Mozambique and Lesotho.

Premier also has a Lil-Lets sales office situated in the UK that exports into the Middle East, Ireland, the US and other EU markets.

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