DURBAN – Libstar Holdings incurred nearly R35 million in expenditure since the Covid-19 outbreak as the cost of doing business has increased dramatically.
The South African food and consumer packaged goods company said yesterday that the expenditure had enabled it to not simply comply with regulations during this pandemic, but to do all it could to continue to keep its people safe and operations viable.
Chief executive Andries van Rensburg said: “In addition to our existing stringent food safety and hygiene practices, additional rigorous safety measures have been implemented in all areas of the business. Actions taken included the provision of special transport benefits, incentives, food and sanitisation packs, donations and additional personal protective clothing.
“Keeping our people safe will remain a key focus area in the coming months as we navigate these challenging and uncertain operational circumstances,” Van Rensburg said.
Its retail sales demand had been stronger since the group’s market update of April 2, driven by pre-lockdown grocery stockpiling and increased in-home dining.
Libstar said retail sales channel revenue growth of 24.3 percent was recorded during the two-month period to May 31.
“The group remains well placed to capitalise on changing consumer behaviour by offering a range of branded, dealer-own brand and private label products within the retail and other sales channels,” it said.
However, Libstar said the significant operational restrictions placed on out-of-home dining, particularly quick-service restaurants (QSRs), had weighed on its performance as revenue within the food service channel fell by 80.1 percent during the period.
Many of its divisions that supply the restaurant and QSR industries, Finlar Fine Foods, Lancewood and Multicup, were impacted most during the level 5 and level 4 lockdown periods.
Revenue in the exports segment fell by 31.8 percent during the two-month period, with the broader impact of Covid-19 on the North American and European continents.
“In the context of these challenges and opportunities, group revenue for the two-month period was 9.8 percent lower than the comparative period, resulting in revenue for the five-month year-to-date period to end May 31 closing 2.1 percent higher than the comparative period,” the group said.
Van Rensburg said all divisions within Libstar were designated as essential service providers in their capacity as producers of food and household and personal care products.
“As such, most of Libstar’s facilities have remained operational during the lockdown period to ensure continuous supply to customers,” he added.
Libstar shares fell 2.33 percent to close at R7.13 on the JSE on Monday.