14 Nov 2024 The Premier Group pumps despite SA’s challenges

The Premier Group, one of SA’s food giants – the parent company of Blue Ribbon, Snowflake and Manhattan Sweets – is currently on a good roll as it celebrates its 200th anniversary…

Premier is blazing a trail of growth as one of the oldest food and consumer packaged goods businesses in South Africa. It listed on the JSE last year, and it shares have risen more than 80% in the past six months.

Revenue was 3.7% higher at R9.7bn, buoyed by growth across its Millbake and groceries, as well as international divisions. Operating profit rose 17.3% to R945m, while the operating margin improved by 110 basis points, reaching 9.7%.

Business Day TV spoke to Premier CEO Kobus Gertenbach for a closer look at the results.

Notable food developments within Premier

• With a R14.8bn market cap on the JSE, Premier has been making R700m in upgrades to its Aeroton bakery which is anticipated to be fully operational in the first half of the group’s 2026 financial year.
• The company’s recent acquisition for R313m of a 30% stake in Goldkeys International, which produces Golden Pride rice brands, as well as beans, has seen Premier make its debut into the rice category.
• This is strengthening its presence in the staple food market while diversifying and bolstering earnings as it looks to capitalise on consumer substitution trends between maize, bread and rice.
• After the completion of the reconstruction of its pasta factory in Mozambique, the Sunblest pasta line has been introduced into a few channels in the SA market.
• It has joined forces with Bevco (acquired by India’s Varun Beverages in a R3bn deal this year) to launch SuperC Energy Drink.
• It is in the final stages of commissioning a new liquorice facility and installing new chocolate facilities in its manufacturing plant as it clinches more work with retailer Woolworths.

“Some of the Woolworths products that you see on the chocolate side will come out of our factories over the next couple of months,” Gertenbach said. “So we are making a few more products for them and are even in the process of trying to onshore some of the products that they import from overseas, start making that for them locally.”

“We are spending across our businesses everywhere, continuing to make investments. We’re going to spend just over R700m this year. And we’ll repeat that again in the next financial year,” he said.

Source: BusinessLive.co.za, Premier Group