Premier Group reports robust full-year results

The owner of Blue Ribbon bread and Snowflake, Premier Group reported a 22.7% rise in normalised headline earnings per share (Heps) to 552 cents for the year ended March 2023 on Tuesday, boosted by strong performances in its Millbake, groceries and international operations.

This is Premier’s first full-year results to the market since relisting on the JSE in March, after an 18 year-long hiatus from the bourse.

Despite the strong performance, Premier did not declare dividends for the period. The move saw the group’s share price falling over 8% by around 11am, at R50.10 a share.

Premier Group’s share price

In its results release on Tuesday, Premier said it is pleased with the group’s ability to present “robust” financials to the market despite having to operate under trading conditions marred by high commodity prices, heightened load shedding and dwindling consumer buying power.

Read: Wiese seeks R3.5bn for Premier’s IPO

Operating profit for the period was 28.2% to R1.3 billion, while earnings before tax, depreciation, amortisation and impairment losses (adjusted Ebitda) was 16.2% higher at R1.7 billion.

High prices boost revenue

Group revenue for the period came in 23.4% stronger at R17.9 billion compared to the previous year, largely driven by revenue increases in the Millbake as well as the groceries and international divisions, which reported 25.4% and 14.5% increases respectively.

Revenue growth in these divisions were largely driven by higher food prices, supported by stable sales volumes during the period.

The Millbake business, which includes the Snowflake flour brand, reported price growth of 24% and muted volume growth of 1%, contributing R14.9 billion in revenue in the period.

“Despite evident macroeconomic headwinds, Premier has shown consistent delivery of growth and is well positioned to drive further growth through a relentless focus on efficiencies and being the lowest cost producer,” the group said.

“The commissioning of the new state-of-the-art mega-bakery in Pretoria was the first major step to upgrade the inland capability to the same quality and consistency as the coastal bakeries,” it added.

Read: Brait cans Premier’s JSE listing

The groceries and international divisions that counts Lil-Lets personal care as one of its brands, reported revenue of R3.1 billion. This was supported by the good performance of its sugar confectionary category which reported growing sales volumes.

“The focus in sugar confectionery is on site manufacturing optimisation and functionality to improve operational performance subsequent to the Mister Sweet acquisition in 2022,” the group said.

“The Mister Sweet acquisition expanded Premier’s offering significantly in the growing private label category,” it noted.

No dividend

Premier’s board has opted to withhold dividends for the current period as its listing on the main board came just a few days before the end of the reporting period.

Investors, however, can expect a dividend in the following financial period.

“No dividends were declared by the board of directors for the year ended 31 March 2023. The company’s current intention is to declare a maiden dividend following the release of its FY2024 results,” the group said.