Premier FY22 HEPS up 40%

Listed food producer Premier Group has reported a significant increase in profit, with a nearly 40% rise to the year ending March. The company's Chief Executive Officer, Kobus Gertenbach, attributes this success to a combination of strategic pricing, cost-saving initiatives, and efficient operations. Gertenbach highlighted the impact of inflationary pressures on global maize and wheat prices at the beginning of the financial year last year, stating that the company carefully executed price increases to protect margins while remaining responsible. Additionally, Premier Group implemented cost-saving measures, such as restructuring their merchandising, which led to improved performance and savings. One of the key financial moves made by Premier Group was drawing down long-term debt and refinancing facilities, ensuring no capital servicing requirements for the next three years. Despite economic pressures, Gertenbach expressed confidence in managing debt levels and generating organic cash flow to further reduce gearing on the balance sheet. The company aims to bring debt levels closer to the one times EBITDA target over the next two to three years. Looking ahead, Premier Group is focusing on expansion initiatives, including the development of a new bakery in Johannesburg and investment in manufacturing capabilities for their personal care products. Gertenbach emphasized a decade-long improvement drive to rebuild the bakery footprint and enhance product quality for consumers. The company remains committed to generating value for shareholders and delivering high-quality products. In response to changing consumer trends and economic challenges, Premier Group is exploring opportunities for growth, both domestically and internationally. The company's strategic approach includes expanding manufacturing capabilities in South Africa to cater to local and offshore markets, particularly in the personal care segment. Gertenbach highlighted the importance of local production in sustaining certain product categories, such as milling, which are heavy and costly to transport. Despite facing hurdles in certain African markets, including Mozambique's economic and political uncertainties, Premier Group remains optimistic about its investments in the region. The company has continued to upgrade its facilities in Mozambique and recently achieved FSSC 22,000 certification, positioning it for future growth opportunities. While focusing on export growth in neighboring countries like Angola, Zambia, Namibia, and Botswana, Premier Group maintains a cautious approach towards expanding manufacturing facilities. As Premier Group navigates a dynamic business landscape, the company's strong financial performance and strategic initiatives underscore its resilience and long-term growth prospects in the food production industry.