Libstar Holdings said yesterday that it had incurred extraordinary Covid19-related expenses of R64.7 million in the year to the end of December. Photo: Twitter
Libstar Holdings said yesterday that it had incurred extraordinary Covid19-related expenses of R64.7 million in the year to the end of December. Photo: Twitter

Libstar incurs R64.7m in pandemic expenses

By Sandile Mchunu Time of article published Mar 18, 2021

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DURBAN - LIBSTAR Holdings, the producer of Lancewood cheese and Denny mushrooms, said yesterday that it had incurred extraordinary Covid19-related expenses of R64.7 million in the year to the end of December, resulting in 13.1 percent decline in normalised operating profit to R774.09m.

However, the group said the resilience and diversity of its portfolio ensured that it navigated the Covid-19 storm successfully, as cash generated from operating activities increased to R637.2m, up from R579.8m a year earlier.

Libstar reported a 4 percent increase in revenue to R10.29 billion, with revenue growth from food categories, which constituted 92 percent of group revenue, up 3.6 percent, while revenue from the household and personal care category, which represented 8 percent of group revenue, increased 7.9 percent.

Diluted headline earnings per share fell 21.7 percent to 46.8 cents a share, and diluted earnings per share declined 79.3 percent to 12.3c, mainly due to the impact of the R198m impairment of goodwill attributable to Denny.

Libstar maintained its final dividend of 25c.

Chief executive Andries van Rensburg said despite the challenging year, their diversity in category, product, brand portfolio and sales mix enabled the company to demonstrate resilience as a group.

“We managed disruptions to our supply chain, particularly in relation to our import- and export-facing divisions.

“We were forced to adapt to a significant and rapid shift in consumer behaviour, with shoppers reducing store visits but increasing their respective shopping basket sizes.

“Our decentralised management model enabled each business unit to act with agility,” Van Rensburg said.

In the perishables segment, revenue increased 0.2 percent. The segment is the largest contributor to group revenue.

The segment was impacted by Covid-19 due to its high exposure to the food service channellue-added perishables,” the group said.

In the groceries segment, revenue increased 5.3 percent, but volumes declined 7.3 percent.

The snacks and confectionery category increased its revenue by 6.7 percent..

Libstar shares closed 5.22 percent higher at R7.05 on the JSE yesterday.

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