Picture: JSE
Picture: 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 consumer-aligned 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 dividend 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.

hasenfussm@fm.co.za