Food products produced by Libstar. Picture: Supplied
Libstar Holdings continued with its value-driving initiatives to enhance cost-competitiveness, earnings quality, and return on invested capital during the second half of its financial year.
The food company said yesterday in a pre-close statement that trading conditions improved from the fourth quarter, following a weaker-than-expected third quarter resulting from soft retail and food service channel demand, as well as delayed third quarter export shipments from the Cape Town harbour.
Libstar’s year-to-date revenue for the period ending November 2024 increased by 2.5%. Price and mix changes contributed 5.4% of revenue growth, against a volume decline of 2.9%. The volume decline was primarily due to the direct import model implemented by a retail customer.
Libstar’s gross margins were in line with the prior year, reflecting focus on price management, operational efficiencies, and cost-savings.
In the Ambient Products category, Wet Condiments delivered a resilient performance, driven by retail channel demand and improved contract manufacturing volumes.
Dry Condiments benefited from improved capacity utilisation and production efficiency.
The Baking category was impacted by weak demand for wraps in the quick service restaurant (QSR) sub-channel, showing some recovery into the fourth quarter.
The Snacks category delivered an improved result from the start of the second half, albeit still lagging the prior year.
In the Perishable Products category, Libstar’s Lancewood brand increased market share in the Soft Cheese and Yoghurt categories while maintaining its position as market leader in the Natural Cheese category.
The Value-Added Meats sub-category underperformed due to lower QSR beef volumes, partly offset by increased demand for retail and contract manufactured fresh and frozen chicken products.
Perishable Products category revenue increased 0.4%, with selling price inflation and mix changes contributing 3.8% to sales growth. Sales volumes declined by 3.4% due mainly to lower QSR beef volumes.
Ambient Products category revenue increased 4.9%, driven by the resilient Wet Condiments sub-category performance. Price and mix changes contributed 7.4% of revenue growth.Gross profit margins
The group received insurance proceeds of R120m in the prior year relating to the Denny Mushrooms fire at the Shongweni plant.
On September 10, Libstar concluded an agreement to dispose of its stake in Chet Chemicals, which forms part of its Household and Personal Care category to Mithratech SA, a subsidiary of Morvest Group.
The financial results for the year to December 31, 2024, are expected to be published on or about March 18, 2025. Libstar’s share price was 0.96% firmer yesterday, positioning it 22% higher than a year before.
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