Consumer goods company Libstar is pushing ahead with its portfolio simplification drive, taking a financial hit as it exits its fresh mushroom business. The group confirmed on Wednesday that it completed the disposal of its fresh mushrooms operations on December 1 and expects to report a pre-tax loss of between R45m and R55m from the transaction in its 2025 financial results. The sale marks another decisive step in Libstar’s strategy to streamline operations and focus on categories with stronger and more sustainable growth prospects.
The disposal includes the mushroom operations in Gauteng and KwaZulu-Natal, but excludes the Phesantekraal property in the Western Cape, which remains earmarked for closure and will be sold later. The Denny brand will remain part of Libstar, but has been licensed to the buyer for exclusive use in fresh mushrooms while Libstar retains the brand for value-added products. Libstar said the loss from the sale will affect reported earnings per share but will be excluded from HEPS.
At the same time, the group is moving closer to fully exiting its non-food categories. The board is assessing non-binding expressions of interest for Contactim, its remaining Household and Personal Care business, in line with the plan to become a focused food manufacturer. In a pre-close update for the 47 weeks to November 21, Libstar said revenue increased 6.7% boosted by growth ahead of its market and continued momentum from the first half.
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Volumes rose 3.1% excluding extraordinary items, while price and mix contributed 3.6%. The Ambient Products category grew 5.6%, supported by Wet Condiments, while the Perishable Products category increased 8.1%, boosted by strong value-added chicken sales and resilient dairy performance from Lancewood. Gross margins improved compared with a year ago.
Even with slowing retail sales growth and ongoing consumer strain, Libstar said it remained on track to meet its year-end gearing and capital expenditure guidance. The company advised shareholders to continue exercising caution while its strategic review continues. Libstar expects to publish full-year results on March 17 next year.
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