South Africa's Libstar H2 sales rise on strong retail client demand

  • Reuters
  • Stock Market News
South Africa's Libstar H2 sales rise on strong retail client demand
Credit: © Reuters.

JOHANNESBURG, Jan 29 (Reuters) - South African food producer Libstar Holdings Ltd LBRJ.J saw a 3.6% rise in revenue in the second half of 2020, it said on Friday, thanks to a strong third quarter as demand from retail clients grew and delays at ports eased.

In the six months ended Dec. 31, Libstar's retail and wholesale customer division - its largest sales contributor - grew revenue sales by 14.5%, the producer of Lancewood dairy products said.

The company said this was as a result of significant third quarter year-on-year revenue growth of 26.6%, mainly attributed to "continued robust retail demand and the beneficial timing effects of the sale of imported value-added meal ingredients in July, after the major port delays in June".

Its exports division grew revenue by 15%, bolstered by continued demand for exported private label dry condiments, as well as substantially improved shipment fulfilment rates from July onwards following the harbour congestion experienced.

Revenue from its second biggest revenue contributor, food service division, declined by 14.2% in the second half, as the industry continued to trade at between 80% and 85% of prior year levels during the fourth quarter due to reduced occupancies of hospitality venues and restaurants in the wake of the COVID-19 pandemic.

Overall, total group revenue for the year ended Dec. 31 grew 2.8%.

Libstar, whose retail clients include the food business of Woolworths (ASX: WOW ) Holdings WHLJ.J and supermarket chain Shoprite Holdings SHPJ.J , said it incurred a further 5 million rand ($332,579.49) in direct COVID-19 related expenses in the fourth quarter, taking the total amount for the year to 65 million rand.

($1 = 15.0340 rand)

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