Libstar Holdings reported strong results for the six months to June 30, but it may struggle with the continuing lacklustre consumer environment that is unlikely to improve much before December, a leading analyst said yesterday.
Libstar CEO Charl de Villiers said in an online presentation yesterday their interventions to simplify their portfolio and fine tune the operating model strategy was expected to drive an improvement in cost competitiveness of the groups sustainable food products, earnings quality and return on invested capital in the second half.
Speaking in an online presentation on the results for the six months to June 30, he admitted they expect consumers to remain under pressure, although the possibility of interest rate relief and introduction of the two-pot pension system might stimulate demand.
Group revenue increased 5.2% to R5.81 billion in the interim period and pre-tax profit was up 46.2% to R111.4 million. Taxed profit increased to R83.4m from R63.6m. Normalised headline earnings a share increased 11.4% to 20.5 cents per share. The revenue growth comprised a 0.2% overall volume decline and 5.4% on price mix gains.
Smalltalkdaily Research analyst Anthony Clark said he believed the easy money has been made on Libstars share price, which had gained some 37% since the start of the year. While LIbstar may be targeting efficiency improvements, export growth and growth in contract manufacturing of meat products, retail demand was likely to remain subdued.
