Lib­star plans list­ing on JSE

• Con­sumer prod­ucts com­pany’s of­fer­ing tar­gets sub­scrip­tion of new shares worth R1.5bn and free float of 40%

Business Day - - FRONT PAGE - Marc Hasen­fuss Ed­i­tor at Large hasen­[email protected]

Lib­star, which gen­er­ates rev­enue of nearly R9bn a year from a bas­ket of well-known gro­cery brands, is set for a list­ing on the JSE.

Lib­star, which gen­er­ates rev­enue of nearly to R9bn a year from a bas­ket of well-known gro­cery brands, is set for a list­ing on the JSE.

In a state­ment is­sued on Mon­day, Lib­star said it en­vis­aged a sub­scrip­tion of new shares worth about R1.5bn as well as the sale of ex­ist­ing shares by cer­tain share­hold­ers.

The of­fer­ing is tar­get­ing a free float of at least 40%. Lib­star’s big­gest share­hold­ers are APEF Asia Pa­cific (Abraaj), with a stake of al­most 71%, the Pub­lic In­vest­ment Cor­po­ra­tion (19%) and Lib­star man­age­ment (about 10%).

The com­pany will join other large con­sumer prod­ucts con­glom­er­ates, such as Pi­o­neer Foods, Tiger Brands, RCL Foods, AVI and Rhodes Food Group and are not all flavour of the month on the JSE.

The fresh cap­i­tal raised by Lib­star will be used to re­pay debt, the size of which was not dis­closed in the state­ment.

This is the sec­ond large in­ten­tion-to-list an­nounce­ment in April, fol­low­ing on glass pack­ag­ing com­pany Con­sol’s con­fir­ma­tion last week of plans for a JSE list­ing.

The change in SA’s po­lit­i­cal cli­mate has been seen as a boon for in­vest­ment in con­sumer­aligned com­pa­nies.

In the 2017 fi­nan­cial year Lib­star gen­er­ated R8.8bn in rev­enue with ad­justed earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (ebitda) com­ing in at R940m.

The ebitda mar­gin was al­most 11%. Lib­star seems in­tent on fol­low­ing a gen­er­ous divi- dend pol­icy, set­ting an ini­tial tar­get div­i­dend pay-out ra­tio of 30% to 40% of pro-forma profit af­ter tax.

It man­ages a range of brands, in­clud­ing Lance­wood, Cape Herb and Spice, Elvin, Cook ’n Bake, Denny, Gold­crest, Slimsy and Cani, as well as li­censed brands such as Robert­sons, Sa­fari, Weigh-Less and Cha­monix. It also pro­duces prod­ucts un­der “dealer own” brands for re­tail­ers such as W (Wool­worths), Fresh­line (Spar), Crys­tal Val­ley (Shoprite Check­ers) and PnP (Pick n Pay).

The com­pany rep­re­sents sev­eral in­ter­na­tional brands in SA, most no­tably Kiri, Arla, Bel, Laugh­ing Cow, Act II, Lur­pak, Tabasco, Kikko­man and Maille.

It ap­pears ac­qui­si­tions could be on the cards as well. The in­ten­tion-to-list state­ment noted that Lib­star would ac­quire busi­nesses to grow or ac­cess iden­ti­fied high-growth cat­e­gories.

Lib­star co­founder and CEO An­dries van Rens­burg said the de­ci­sion to list was an ex­cit­ing step in the next phase of its de­vel­op­ment and growth story. Cap­i­tal raised from the list­ing would sup­port growth prospects and al­low Lib­star to in­vest fur­ther in its cat­e­gories and man­u­fac­tur­ing fa­cil­i­ties. Key man­age­ment would re­main ma­te­ri­ally in­vested in Lib­star to en­sure strong align­ment be­tween ex­ist­ing and new share­hold­ers, he said.

Co­founder and fi­nan­cial di­rec­tor Robin Smith said Lib­star had a strong track record of growth and fi­nan­cial per­for­mance and was well po­si­tioned to cap­i­talise on op­por­tu­ni­ties for fu­ture de­vel­op­ment.

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