Pioneer Foods buoyant as debt falls
Group says it is now in a position to increase borrowings to fund further acquisitions
Pioneer Foods, owner of the Sasko, Weet-Bix, White Star and Liqui Fruit brands, said on Monday its low debt levels had given it room to increase borrowings to fund future acquisitions. In the year to end September, Pioneer Foods’s debt fell from R612m to R442m, while its net debt to equity ratio — which evaluates the company’s financial leverage — reduced from 8% to 5%. Pioneer Foods’s debt levels are historically low. In 2015, the company’s net debt to equity ratio was -1%. The company has a market capitalisation of R18.2bn.
CEO Tertius Carstens said the group had access to increased syndicated debt facilities at very competitive rates. Pioneer has, however, taken strain from inflationary pressure driven by rand weakness and increased international oil prices. It has shed 42.89% of its value so far this year. The macroeconomic pressures are unlikely to derail the company’s penchant for acquisitions because of its relatively low levels. The lean debt structure put the company...
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