Libstar, the manufacturer of Lancewood cream cheese and producer of Denny mushrooms among other food products, has announced its intention to float on the main of board of the JSE.
The company, which was built up over 12 years and has a revenue of R8.8 billion, expects to list in the Food Products sector of the JSE.
The capital raised from the listing would be used to support Libstar’s growth prospects and to enable further investment in its product categories and manufacturing facilities, says CEO and co-founder Andries van Rensburg.
Libstar specialises in packaged food products, including perishables, ambient groceries, baking, snacks and confectionary, beverages, personal care products as well as specialised food packaging. Its products are available within the retail, wholesale, industrial, food service industries and are exported too.
Some of the well-known brands associated with brand include Robertsons, Weigh-Less, Goldcrest and Safari.
Van Rensburg says the upper-end of the retail channel has shown the most growth historically. Lancewood (cheese) and Finlar (value-added beef and chicken) in the perishables business category as well as the confectionary categories have also grown well.
The company has three existing shareholders, the biggest is Dubai-based private equity firm Abraaj, with a 70.93% stake. The other two are the Public Investment Corporation and Libstar Management, with 19.36% and 9.71% stakes respectively.
Libstar’s intention to list comes from its desire to expand capacities and create additional capabilities in its existing production facilities. The company also said through this listing, it wants to encourage more investment in the current business unit to improve its margins and to enable more organic growth in the company. Libstar also wants to use the JSE’s platform to enable more international investment.
Currently, the group exports to countries such as the USA, Canada, Australia, Japan, Germany, UK, UAE, Indian ocean islands and certain countries in southern Africa.
Libstar has reported an ongoing increase in profits and growth. In the 2014 financial year, revenue was at R4.75 billion, which grew to R8.8 billion in the 2017 financial year. This reflects a compound annual growth rate of 23%.
Libstar has an initial target dividend payout ratio of 30% to 40% of “pro-forma profit after tax”. According to the statement, dividends will be decided by the board and will be a function of the profitability of growth opportunities available to the company’s strategy.
The listing is yet to be approved by the JSE.