Libstar today announced its financial results for the year ended 31 December 2024. The Group highlighted a resilient operational performance, strong cash generation, and continued progress on its 3-year strategy despite isolated challenges faced during the reporting period.
Key highlights from the year include:
- Revenue growth of 3.1% to R11.7 billion, supported by Exports channel revenue growth of 7.6%.
- Strong performance in the Ambient Products category with 5.4% revenue growth and 12.2% Normalised EBITDA growth, driven by the own-branded and private label dry and wet condiment offerings locally and internationally.
- Improved cash conversion ratio to 80.0% (2023: 66.1%), reinforcing strong financial discipline.
- Interest cover strengthened to 5.4x, reflecting improved balance sheet resilience.
- Gearing ratio reduced to 1.5x Normalised EBITDA (2023: 1.6x), reflecting sound capital management.
- Operating model simplification with the establishment of two super-categories, Perishable Products and Ambient Products.
- Portfolio simplification, including the disposal of Chet Chemicals and the closure of Chamonix, its Franschhoek-based Chamonix Spring Water plant, reinforcing the Group’s food-focused strategy.
“Libstar has remained steadfast in executing its strategy of simplification, growth, and sustainability in the face of a constrained consumer environment and the isolated challenges within its portfolio during the year. Our ability to generate robust cash flows, strengthen our balance sheet, and expand key categories highlights the resilience of our business model and its potential,” said CEO, Charl de Villiers.
Category and channel performance: Strong momentum in key areas
In 2024, Libstar successfully simplified its operating model into two super-categories – Ambient Products and Perishable Products. The strong performance of the Ambient Products category underscores the success of this strategy reinforcing Libstar’s long-term vision.
The Ambient Products category delivered a strong performance, growing revenue by 5.4% and driving a 12.2% increase in Normalised EBITDA.
The Wet Condiments sub-category was a standout performer, achieving 9.4% revenue growth and a 48.5% increase in Normalised EBITDA, supported by a simplified management structure, procurement and production efficiencies, and improved service levels and distribution.
The Exports channel continued its growth trajectory, increasing 7.6% year-on-year, with the Cape Herb & Spice own-branded product expansion and new international listings driving strong demand.
In the Food Service channel, volumes grew by 4.2%, underpinned by a new support structure and an expanded product basket, including condiments and baking aids. These strategic advancements demonstrate Libstar’s ability to drive category growth and strengthen its market positioning in key channels.
The Perishable Products category faced headwinds, reflected in revenue growth of 1.2%, and reduction in gross profit margins to 16.1% (2023: 16.7%), as well as in Normalised EBITDA of 13.7%. The category was impacted by a once-off loss of a key food service customer at Finlar Fine Foods, which led to a reduction in beef volumes and a temporary under-recovery of fixed costs. Finlar has however proactively initiated a market development strategy for the Retail & Wholesale, Exports and Contract Manufacturing channels to strengthen its market position and improve its capacity utilisation.
Within the Dairy segment, Lancewood faced cyclical pressures, primarily due to a significant inflow of unprocessed milk in the market, increased costs related to foot-and-mouth disease and intensified competitive pressures related thereto. However, Lancewood has successfully maintained and protected its market share in the natural cheese category. The brand’s strong product development capabilities have allowed it to capitalise on the excess raw milk supply by innovating new soft cheese products, reinforcing its position as a leader in the premium Dairy segment.
The Group remains resolute in its efforts to grow its value-added meat offerings, whilst also expecting to benefit from a more stable demand-supply dynamic in the Dairy category during the coming year.
Dividend declaration
The Board has declared a cash dividend of 15 cents per ordinary share for the year ended 31 December 2024, maintaining its dividend policy and reinforcing its commitment to shareholder returns. Since the listing of the Group on the Johannesburg Stock Exchange in 2018, Libstar has returned R891 million to its shareholders.
Looking ahead
Celebrating its 20th anniversary in 2025, Libstar is well-positioned for its next phase of growth, focusing on:
- Expanding in high-growth categories, including soft cheese, yoghurt, and condiments.
- Optimising its operational model by integrating key divisions for greater efficiency.
- Driving food service and export expansion locally and internationally.
“Our initial progress from simplification and growth initiatives, particularly within the Ambient Products category, was encouraging. This, together with the strengthening of our balance sheet in 2024, are a testament to the potential of our business. We remain fully committed to delivering on the goals we outlined when our strategy was first developed in 2023 – enhancing cost-competitiveness, improving earnings quality, and driving higher returns on invested capital. The new year has started off positively, and we are focused on maintaining this momentum throughout the year,” concluded de Villiers.
