Libstar Holdings posted a decline in normalized EBITDA and a steep drop in profit for the six months ended June 30, 2026, as integration costs from the Cape Herb & Spice acquisition and weaker export demand offset modest top-line growth.
Revenue rose 0.7% to ZAR5,804 million, the company said in a presentation on September 8, 2026. Volume growth of 1.1% was partially offset by a 0.4% decline in price mix. Excluding the impact of a lost Dickon Hall Foods contract, revenue would have grown 2.7%, the company noted.
Normalized EBITDA fell 4.3% to ZAR453.2 million, with the margin contracting to 7.8% from 8.2%. The company reiterated its medium-term margin target of 9.0% to 10.0%. Gross profit margin compressed 0.7 percentage points to 21.5% from 22.2%. Operating profit dropped 38.4% to ZAR148.5 million, while profit before tax fell nearly half to ZAR71.4 million from the prior-year period.
Normalized headline earnings per share declined 2.4% to 24.2 cents.
The weakness in profits was concentrated in the ambient products segment, which accounts for roughly half of group revenue. Ambient normalized EBITDA fell 15.2%, pulled down by sharp declines in wet condiments (EBITDA down 45.3%) and dry condiments (EBITDA down 25.5%). By contrast, the perishables division delivered revenue growth of 2.5% and normalized EBITDA expansion of 13.5%, buoyed by strong performance in value-added meats and dairy.
Export revenue dropped 9.6%, weighed by softer demand in Australia and Japan and the stronger rand. Industrial and contract manufacturing revenue fell 17.0% following the loss of a significant Dickon Hall Foods contract. Food service channels grew 11.2%, while retail and wholesale revenue rose 3.2%.
On the balance sheet, the gearing ratio strengthened to 1.2 times from 1.3 times, well below the 2.5-times debt covenant threshold and the medium-term target of below 1.5 times. Interest coverage improved to 8.7 times from 5.8 times, comfortably above the 3.5-times covenant requirement. Net interest-bearing debt stood at ZAR1,047 million at period-end, up from ZAR824 million at year-end 2025 but below the ZAR1,070 million recorded in H1 2025. Unutilized funding facilities remained at ZAR1.6 billion.
Adjusted return on invested capital rose to 10.3% from 9.3%, approaching the medium-term target of approximately 13%. Cash conversion was above the 70% minimum target at 70%, down from 107% in the prior period, with a medium-term aim above 80%.
Capital expenditure more than doubled to ZAR145.3 million, or 2.5% of revenue, up from ZAR83.7 million and 1.5% of revenue. Expansionary and capacity investments accounted for 35.2% of total capex, with quality improvements and replacement maintenance each representing roughly 32%.
Net working capital held steady at 71 days, equal to 18.2% of revenue, within the short-term target of below 18.5%. The company also reported ZAR10 million in annualized procurement savings.
Libstar enhanced its dividend policy with an 86.7% dividend increase and repurchased ZAR62 million of shares. Asset disposals included the completed sale of the Phesantekraal property and progress on the intended disposal of Contactim.
Shares rose 5.88% to ZAR360 following the presentation. The company confirmed the Lancewood George water recovery project remains on track for completion in November 2026, while the Cape Herb & Spice consolidation is scheduled for H1 2027.
