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Libstar Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2014/032444/06)
(JSE share code: LBR)
(ISIN: ZAE000250239)
("Libstar" or the "Group")
VOLUNTARY PRE-CLOSE TRADING UPDATE FOR THE 21-WEEK PERIOD ENDED
31 MAY 2026 AND INVESTOR CONFERENCE CALL
INTRODUCTION
This voluntary pre-close trading update relates to the 21-week period from 1 January to
31 May 2026 ("Current Period") compared to the corresponding 21-week period of the
prior year ("Prior Period"). The results of the Group's Fresh Mushroom operations,
disposed effective 1 December 2025, have been excluded from the Prior Period to
provide a like-for-like comparison of the Group's continuing operations.
The consumer environment remains severely constrained, as evidenced by low-single-
digit value growth in the Group's defined retail channel basket. Additionally, inflationary
pressure on manufacturing expenses has intensified, driven by sharp increases in
petroleum-linked input costs, notably in packaging and distribution.
In this market context, the Group's trading performance for the Current Period was
below original expectations with revenue broadly in line with the Prior Period.
Aside from general inflationary pressures and soft Retail channel trade, particularly in
the first quarter owing to higher inventory levels in distribution centres at the start of the
year, the Group's underperformance relative to expectations was predominantly
concentrated in Dickon Hall Foods (DHF) and exports of Dry Condiments.
In the DHF division, labour challenges and water shortages led to production disruptions
and a significant under-recovery of manufacturing costs during the Current Period.
Dry Condiments export revenue was below expectations, affected by shipment timing,
the sustained strengthening of the Rand against major currencies, and weaker demand
in Australia and Asia.
The Dairy, Value-added Meats and core Wet Condiments (Montagu Foods, Cecil
Vinegar, and Retailer Brands) sub-categories delivered resilient performances, partly
offsetting the aforementioned challenges.
Channel performance showed strong growth in Food Service, muted growth in Retail
and Wholesale, and constrained performance in Exports and in Industrial and Contract
Manufacturing.
TRADING UPDATE
Group revenue for the Current Period was broadly in line with the Prior Period. Revenue
growth in Value-added Meats, the core Wet Condiments cluster (Montagu Foods, Cecil
Vinegar and Retailer Brands), Select Products and Baking was supported by strong
Food Service growth and stable Retail and Wholesale demand. This was offset by
weaker-than-expected Industrial and Contract Manufacturing channel sales in DHF and
weak Export channel sales of Dry Condiments.
Revenue: Group
Current Period Group revenue increased by 0.9%, with volume growth of 0.3% and a
price/mix contribution of 0.6%. Excluding DHF revenue, Group revenue increased by
3.5%.
Revenue: Perishable Products
Perishable Products revenue increased by 1.6%, driven by a volume decline of 0.8%
and price/mix contribution of 2.4%. The category's revenue growth was supported by
resilient demand in core Dairy sub-category products (comprising hard cheese, soft
cheese and yoghurt) and Value-added Meats. Channel performance was led by strong
growth in Food Service, while Retail and Wholesale revenue was in line with the Prior
Period.
Revenue: Ambient Products
Ambient Products revenue increased by 0.2%, driven by 1.2% volume growth and a
1.0% deflationary price/mix impact, primarily attributable to the strengthening of the
Rand against major currencies. Strong performances in the Food Service, Retail and
Wholesale channels supported revenue growth in the core Wet Condiments and Baking
sub-categories. This was offset by a significant decline in Export market sales of Dry
Condiments, driven by lower private label product sales in Australia and Japan, as well
as lower Industrial and Contract Manufacturing sales in DHF.
Excluding DHF revenue, Ambient Products revenue increased by 5.6%.
Gross Profit Margins
Current Period gross profit margins were between 1 and 1.5 percentage points lower
than the Prior Period, driven predominantly by weak cost recovery in DHF and Dry
Condiments, together with inflationary pressures from petroleum-linked cost increases
across the Group.
The gross margin performance of Perishable Products improved year-on-year,
supported by favourable product mix and production efficiencies in the Dairy sub-
category and a stable margin profile in Value-added Meats. This was partly offset by
lower manufacturing cost recoveries and higher promotional spend in the Convenience
Meals sub-category.
The gross profit margin of Ambient Products declined. Margin expansion in the core Wet
Condiments cluster was supported by improved production utilisation and cost control.
This improvement was more than offset by material under-recovery of manufacturing
costs in DHF and Dry Condiments.
Operating Expenses
Operating expenses increased below inflation, reflecting disciplined management of
controllable costs.
UPDATE ON CAPITAL PROJECTS
Montagu Foods / DHF integration
The integration of the remaining DHF business into Montagu Foods has continued
broadly in line with the original project timeline and budget.
Production lines earmarked for transfer to Montagu Foods' existing facility were brought
into operation in May and June 2026. Commissioning of the lines designated for the new
site remains on track for completion by the end of July 2026.
Cape Herb & Spice
The consolidation of three spice blending and packing facilities and one warehouse into
a single site continues in line with the originally estimated project timeline and cost
estimates, with completion expected in May 2027.
CASH GENERATION, WORKING CAPITAL AND NET DEBT
Libstar continued to generate resilient cash flows during the Current Period despite
weaker trading. Focused capital allocation and net working capital management
supported a balance-sheet position that remains well within the Group's targeted funding
parameters.
The Group's last-twelve-month net interest-bearing debt to Normalised EBITDA ratio of
1.3 times was lower than the Prior Period gearing ratio of 1.6 times.
The Group's last-twelve-month EBITDA to senior interest cover ratio improved from 5.9
times in the Prior Period to 7.9 times in the Current Period.
PORTFOLIO SIMPLIFICATION
The Group has entered into a sale agreement in relation to its Phesantekraal property in
the Western Cape, which did not form part of the sale of the Fresh Mushroom operations
effective 1 December 2025. An early H2 effective date is anticipated.
Libstar has also progressed discussions regarding the intended disposal of Contactim,
its remaining non-food business.
SHARE REPURCHASE
To date, the Group has utilised approximately R43.3 million to repurchase 9.4 million
Libstar shares at an average price of R4.59 per share. The Group intends to continue its
share repurchase programme during the financial closed period commencing 1 July
2026, subject to compliance with the applicable JSE Listings Requirements and Board
governance processes.
OUTLOOK
Management has accelerated mitigating actions, including targeted pricing adjustments,
further enhanced cost control of labour and manufacturing costs, and focused
remediation within underperforming operations.
Although the inflationary outlook remains elevated, the Group expects H2 performance
to improve relative to H1, supported by Libstar's traditional trading seasonality, the non-
recurrence of capital project-related disruptions experienced in the Current Period, and
continued progress on integration and operational initiatives.
INVESTOR PRE-CLOSE CONFERENCE CALL
Shareholders are advised that Libstar will host a pre-close investor call at 17:00 (CAT)
today, Thursday, 18 June 2026, to provide an update on the year-to-date period ended
31 May 2026, prior to entering a closed period on 1 July 2026.
Participants should register for the online meeting using the following link:
https://www.corpcam.com/Libstar18062026
OTHER INFORMATION
The financial information on which this trading update is based has not been reviewed
nor reported on by the Group's external auditors.
The Board accepts responsibility for the information contained in this announcement and
certifies that, to the best of its knowledge and belief, the information relating to Libstar is
accurate and that no information has been omitted which is likely to affect the
significance of this announcement.
Libstar expects to publish its financial results for the six months ended 30 June 2026 on
or about 8 September 2026.
Cape Town
18 June 2026
Sponsor
The Standard Bank of South Africa Limited
Date: 18-06-2026 08:00:00
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