Strong annual performance for Premier Group despite consumer spending pressures
Premier Group, with brands Blue Ribbon, Snowflake, Dove, among others, produced strong results the year ended March 31, 2025 despite consumer spend still being under pressure.
Premier Group, a leading consumer packaged goods company with brands Blue Ribbon, Snowflake, Dove, among others, produced strong results the year ended March 31, 2025 despite consumer spend still being under pressure.
At a macro level, despite the successful transition to a Government of National Unity and inflation moderating to below the middle of the target range, high interest rates, volatile soft commodity prices and low economic growth continue to besiege the consumer.
Despite this, shareholders got a final gross dividend of 271 cents per share up, up 23% from the prior year. The market welcomed the results, with Premier's share on Tuesday afternoon rising 2.95% to R137.39 on the JSE.
Revenue increased by 7.0% to R19.9 billion, supported by revenue growth in both the Millbake and the Groceries and International divisions of 5.7% and 13.3%, respectively.
Earnings per share increased by 31.0% to 936 cents and headline earnings per share increased by 26.8% to 943 cents, when compared to last year.
"Through meticulous margin management and efficiencies, as well as a commitment to producing quality products at the lowest cost, moderate revenue growth has been leveraged into meaningful improvement in operational earnings," it said.
Ebitda increased by 14.7% to R2.4 billion. Millbake Ebitda grew by 14.7%, while the Groceries and International Ebitda grew by 9.2%. The Group's Ebitda margin improved by 80 basis points to 11.8% compared to the prior year level of 11.0%.
Operating profit increased by 16.9% to R1.9bn. The operating profit margin improved by 80 basis points to 9.6% when compared to last year.
Net finance costs decreased by 16.7% to R306 million, the result of debt repayments made on borrowings and the reduction of interest rates post the refinancing of the syndicated debt facilities during the year. Cash generated from operations was in line with the prior year, at R2.4bn, enabled by growth in Ebitda and supported by disciplined working capital management.
Looking at various divisions, Premier said the Millbake division achieved a "stellar set of results", displaying resilience despite a challenging economic environment. Revenue increased by 5.7% to R16.4 billion and Ebitda increased by 14.7% to R2.3bn.
A good performance was achieved in the Groceries and International division. The division's revenue increased by 13.3% to R3.5bn and Ebitda increased by 9.2% to R233 million.
The Home and Personal Care (HPC) category had "a pleasing year". The additional capacity installed in tampon manufacturing and packaging has enabled improved service levels, contributing to volume gains in the local business. The HPC supply chain strategy, focused on becoming the best cost manufacturer to drive market share and brand equity, is gaining traction, Premier said.
Meanwhile, Sugar Confectionery's performance experienced some disruptions during the year which impacted service levels. "The new private label contracts and product launches continue to gain momentum and the new liquorice line, commissioned in December 2024, will add exciting new product ranges to the confectionery offering. The first phase of site consolidations has been completed, which is anticipated to enhance efficiencies between the two sugar confectionery sites," it said.
Looking ahead, Premier said moderate revenue growth is anticipated for the most part of 2026 driven by substantial declines in maize input prices and subdued global wheat prices. Maize prices are expected to soften by mid-2025, Premier said will enable it to pass through cost savings to burdened consumers.
It also warned that local food inflation will be impacted in 2025 by Eskom tariff hikes and failing water infrastructure mitigation.
Meanwhile, the two-year capital project to refurbish the Aeroton bakery to the standards of Premier's coastalsites and the mega-bakery in Tshwane is expected to further enhance efficiencies and step change bread quality in the inland region. The Aeroton bakery will replace the capacity of three small-scale, older generation bakeries in the region. Investments in the HPC factory, scheduled for commissioning during the first half of 2026, are expected to further improve efficiencies and economies of scale.
BUSINESS REPORT
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
9 hours ago
- IOL News
Examining the effectiveness of Black Economic Empowerment in South Africa
Is Black Economic Empowerment failing? Insights from recent analyses Image: Leon Muller / Independent Newspapers The debate surrounding the effectiveness of Black Economic Empowerment (BEE) in South Africa has intensified in recent months, with critics pointing to its shortcomings in achieving its core objectives. BEE is a government policy enacted in 2003 to increase economic participation by black South Africans. It seeks to transform the economy by promoting black ownership of companies, increasing black representation in management and boardrooms, and fostering entrepreneurship among historically disadvantaged communities. Although its objectives are widely supported, the policy's success has been scrutinised. In a detailed analysis published in the St Andrews Law Review on May 24, 2023, James Vandrau argued that BEE has failed to reconcile social inequalities in South Africa. He pointed out that resistance from the white business community has hampered the policy's effectiveness. 'This demographic has largely opposed the changes instigated by BEE, leading to a considerable backlash against the program,' Vandrau noted. According to a 2006 survey, approximately one-fifth of South African companies had no plans to implement black empowerment initiatives. The slow pace of progress prompted the Presidential Black Business Working Group to call for more stringent measures, with the ANC acknowledging that more aggressive interventions were necessary to meet BEE targets. This frustration has led many black entrepreneurs to advocate for faster economic de-racialisation. One of the most persistent criticisms of BEE is that it has been undermined by corruption and nepotism. Critics argue that a privileged few have benefited disproportionately at the expense of the wider black community. Gelb & Black (2004) highlighted how unissued equity was transferred from white-owned companies to a select group of 'tenderpreneurs'—black businesspeople often with high political profiles but limited business experience—resulting in a form of enrichment rather than broad-based empowerment. Furthermore, the representation of black individuals in senior management and boardrooms remains disappointingly low. The Black Business Executive Circle report of October 2005 revealed that only five of the top 200 companies on the Johannesburg Securities Exchange (JSE) had black ownership exceeding 51%. Only 32 companies had black ownership above 25%, collectively accounting for less than 2% of the JSE's market capitalisation. In an opinion piece published in The Star three months ago, Professor Bheki Mngomezulu, Director of the Centre for the Advancement of Non-Racialism and Democracy at Nelson Mandela University, acknowledged that BEE was a noble idea but emphasised that corruption has derailed its progress. 'The process should start with politicians who have corrupted the system and then move to businesses that have exploited loopholes to serve self-interests,' Mngomezulu wrote. 'Unless these corrupt practices are addressed, BEE will hinder economic growth and exclude those it was meant to benefit.' Weighing in, Dr. Khwezi Mabasa, a sociology lecturer at the University of Pretoria and an economic policy analyst, emphasised the need for a broader approach. Speaking to IOL, Mabasa highlighted that current legislation and initiatives, such as the broad-based black economic empowerment codes (B-BBEE), must be complemented by efforts outside the stock exchange, including supporting small and medium enterprises, entrepreneurship, and local economic development.
IOL News
a day ago
- IOL News
Strong annual performance for Premier Group despite consumer spending pressures
Premier Group, with brands Blue Ribbon, Snowflake, Dove, among others, produced strong results the year ended March 31, 2025 despite consumer spend still being under pressure. Premier Group, a leading consumer packaged goods company with brands Blue Ribbon, Snowflake, Dove, among others, produced strong results the year ended March 31, 2025 despite consumer spend still being under pressure. At a macro level, despite the successful transition to a Government of National Unity and inflation moderating to below the middle of the target range, high interest rates, volatile soft commodity prices and low economic growth continue to besiege the consumer. Despite this, shareholders got a final gross dividend of 271 cents per share up, up 23% from the prior year. The market welcomed the results, with Premier's share on Tuesday afternoon rising 2.95% to R137.39 on the JSE. Revenue increased by 7.0% to R19.9 billion, supported by revenue growth in both the Millbake and the Groceries and International divisions of 5.7% and 13.3%, respectively. Earnings per share increased by 31.0% to 936 cents and headline earnings per share increased by 26.8% to 943 cents, when compared to last year. "Through meticulous margin management and efficiencies, as well as a commitment to producing quality products at the lowest cost, moderate revenue growth has been leveraged into meaningful improvement in operational earnings," it said. Ebitda increased by 14.7% to R2.4 billion. Millbake Ebitda grew by 14.7%, while the Groceries and International Ebitda grew by 9.2%. The Group's Ebitda margin improved by 80 basis points to 11.8% compared to the prior year level of 11.0%. Operating profit increased by 16.9% to R1.9bn. The operating profit margin improved by 80 basis points to 9.6% when compared to last year. Net finance costs decreased by 16.7% to R306 million, the result of debt repayments made on borrowings and the reduction of interest rates post the refinancing of the syndicated debt facilities during the year. Cash generated from operations was in line with the prior year, at R2.4bn, enabled by growth in Ebitda and supported by disciplined working capital management. Looking at various divisions, Premier said the Millbake division achieved a "stellar set of results", displaying resilience despite a challenging economic environment. Revenue increased by 5.7% to R16.4 billion and Ebitda increased by 14.7% to R2.3bn. A good performance was achieved in the Groceries and International division. The division's revenue increased by 13.3% to R3.5bn and Ebitda increased by 9.2% to R233 million. The Home and Personal Care (HPC) category had "a pleasing year". The additional capacity installed in tampon manufacturing and packaging has enabled improved service levels, contributing to volume gains in the local business. The HPC supply chain strategy, focused on becoming the best cost manufacturer to drive market share and brand equity, is gaining traction, Premier said. Meanwhile, Sugar Confectionery's performance experienced some disruptions during the year which impacted service levels. "The new private label contracts and product launches continue to gain momentum and the new liquorice line, commissioned in December 2024, will add exciting new product ranges to the confectionery offering. The first phase of site consolidations has been completed, which is anticipated to enhance efficiencies between the two sugar confectionery sites," it said. Looking ahead, Premier said moderate revenue growth is anticipated for the most part of 2026 driven by substantial declines in maize input prices and subdued global wheat prices. Maize prices are expected to soften by mid-2025, Premier said will enable it to pass through cost savings to burdened consumers. It also warned that local food inflation will be impacted in 2025 by Eskom tariff hikes and failing water infrastructure mitigation. Meanwhile, the two-year capital project to refurbish the Aeroton bakery to the standards of Premier's coastalsites and the mega-bakery in Tshwane is expected to further enhance efficiencies and step change bread quality in the inland region. The Aeroton bakery will replace the capacity of three small-scale, older generation bakeries in the region. Investments in the HPC factory, scheduled for commissioning during the first half of 2026, are expected to further improve efficiencies and economies of scale. BUSINESS REPORT
IOL News
a day ago
- IOL News
Market cheers as Telkom rings in robust results
Telkom store at N1 City in Goodwood, Cape Town. Image: Ian Landsberg/Independent Newspapers The market on Tuesday cheered as Telkom rang in robust results for the year ended 31 March and resumed its dividend, which saw its share surge 7%. In morning trade the share was up 7.35% at R42.95 on the JSE. Telkom said mobile subscribers were up 13.4% to 23.2 million. Serame Taukobong, Telkom Group CEO said, 'The company has largely modernised its technology infrastructure and executed on a robust, detailed strategy across its operations. The financial results for FY2025 confirm that the business has not only stabilised but has built a platform for accelerated growth." In key financial metrics, adjusted headline earnings per share rose 102.4% to 583.2 cents; while adjusted basic earnings per share were up 128.9% to 681.7 cents. Ebitda was up 25.1% to R11.8 billion; while revenue rose 3.3% to R43.9bn; with free cash flow up 555.2% to R2.8bn. Taukobong said Telkom's differentiated strategy over the past year centred on three key pillars: The first pillar was sales engine optimisation. "We engineered our sales engine to prioritise efficiency, streamlining regional teams into agile, data-driven units and investing in digital tools to empower frontline teams." The second pillar was network excellence. "We prioritised strategic investments in our infrastructure, expanding fibre and 4G/5G coverage to underserved areas while enhancing urban network performance." The final pillar was customer-centric value. "We continued disrupting the market by expanding our flexible, affordable plans tailored to diverse segments, from data-centric bundles for cost-conscious users to seamless connectivity solutions for small, medium and large enterprises. We supported these with transparent pricing and proactive service," he said. Taukobong said in a significant milestone, Telkom had successfully concluded the disposal of Swiftnet, the masts and towers business to the consortium led by Actis and Royal Bafokeng Holdings with a total cash consideration of R6. 618bn received on March 27. "We are strategically dedicating R4 750 million of the proceeds post year end to strengthen our balance sheet. This deliberate move is aimed at fortifying the balance sheet for future growth, fuelling innovation, and ensuring we maintain a competitive edge in a dynamic market. The remaining proceeds are earmarked for profit-enhancing capital investments as well as a special distribution to shareholders," he said. Serame Taukobong, Telkom Group CEO. Image: Supplied The group reinstated its dividend, saying it will return a total dividend of R1.3bn, which includes an ordinary cash dividend of R833 million (163 cents per share) and a special dividend of R500 million (98 cents per share) from the completed disposal of the Swiftnet masts and towers business, resulting in 261 cents per share being returned to Telkom shareholders. Across its various segments, Telkom reported notable growth. Telkom Consumer saw a 10.2% increase in mobile service revenue, supported by a 19.5% rise in its mobile data subscriber base, which reached 15.2 million. Openserve recorded a 5.9% increase in fibre-related data revenue and achieved a market-leading fibre-to-the-home connectivity rate of 50.4%. BCX posted a 12.7% increase in fibre-related data revenue, along with a 5.8% growth in cloud services revenue. Gyro, Telkom's standalone infrastructure subsidiary, contributed to improved liquidity by realising total cash proceeds of R730 million from the transfer of 57 properties. Looking ahead, Telkom said its medium-term roadmap leverages its current momentum as it sets "ambitious yet achievable objectives for the next three years". Maintaining a strong balance sheet remains a top priority; a focus on efficiency as well as monetising infrastructure assets and improving medium- to long-term returns. "Essential to achieving these financial targets is continued stability in South Africa, a growing economy supported by a macro-economic environment that does not deteriorate from current levels, and a stabilised energy supply. While their impact is not yet visible, recently escalated global tensions and emerging trade wars could limit South Africa's economic growth, " Telkom said. BUSINESS REPORT Visit:
