Food company Libstar delivered its strongest first-half performance since 2022 in the six months ended June 30, supported by volume growth, cost optimisation and improved operational efficiencies.

Revenue increased by 6.7% year-on-year to R5.96-billion, supported by volume growth, a favourable category mix, cost optimisation and improved operational efficiencies.

Operating profit was R296-million, an increase of 16.7%.

Normalised earnings before interest, taxes, depreciation and amortisation (Ebitda) increased by 7.5% to R465-million, with the Ebitda margin improving to 7.8%.

Cash conversion ratio was 110%, which Libstar says demonstrates strong working capital discipline.

Reporting on the group's results on September 16, CEO Charl de Villiers said the group achieved these results despite challenging macroeconomic factors, including persistent high consumer pressure, globally volatility from trade tensions and geopolitical uncertainty, and elevated input and logistics costs impacting margins.

In terms of category growth, Ambient Products increased 6%, while Perishables increased by 7.6%, driven by volume and price.

Libstar highlights that the particularly strong growth in the Ambient Products super-category was supported by improved capacity use, strategic pricing, volume growth and a sharper focus on value-added food solutions.

Notably, Cape Herb & Spice’s branded revenue in the export channel grew by more than 40%.

In the Perishable Products super-category, Lancewood continued to grow market share in cheese and yoghurt.

“These results clearly demonstrate the strength of our transformation. By simplifying our portfolio, sharpening execution, and accelerating growth in our priority categories, we are building real momentum. They reaffirm our commitment to delivering on our strategic priorities, driving financial resilience, and positioning Libstar as a strong business set for sustainable growth,” De Villiers said.

“Our latest results demonstrate record first-half performance across key financial metrics, including Ebitda, gross margin, and cash conversion, alongside a notable improvement in gearing. Significantly, the gearing ratio has strengthened from 1.6x to 1.3x, while cash conversion has reached 110%, far surpassing the 65% target, driven by an improved trading result and release of working capital,” he aded.

Libstar said its streamlined portfolio and operating model are garnering results. Recent decisive actions, such as closing the Denny’s Fresh Mushrooms Cape Town (Phesantekraal) facility, integrating the remaining business of Dickon Hall Foods into Montagu Foods and divesting Umatie baby food, have reduced fragmentation and improved the group’s competitiveness.

The establishment of a shared-services structure in the Wet Condiments sub-category, along with the integration of Rialto’s Retail division, Ambassador Foods (Snacks division) and Cape Coastal Honey (Spreads division), further strengthen efficiencies and customer alignment, Libstar highlights.

The group also announced a new distribution agreement with General Mills to grow brands such as Häagen-Dazs, Pillsbury, Nature Valley and Old El Paso in South Africa.

Meanwhile, De Villiers announced that Libstar has received non-binding expressions of interest regarding the potential acquisition of all securities currently in issue.

He cations that these discussions are at an early stage, and there is no certainty that they will result in a binding offer.

The group’s strategy execution, capital allocation priorities and day-to-day operations remain unaffected, De Villiers assured.

“Looking ahead, we remain committed to sustaining momentum and driving growth, even in the face of a constrained consumer environment and global uncertainty. Our focus is clear: resilience, innovation, and long-term value creation.

“Some of our key priorities include driving operational efficiencies, expanding export markets and international listings for Cape Herb & Spice, accelerating innovation and enhancing supply chain agility and sustainability,” De Villiers pointed out.

“Through a series of deliberate actions over the past two years as we work towards our strategic goals for 2027, Libstar will, by year-end, have transformed into a significantly streamlined two-category, sub-category-focused business, led by a smaller leadership team with greater strategic alignment, sharper operational execution and a more efficient cost structure,” he added.