JSE’s food index slumps as producers suffer from indigestion
Shares in Denny Mushrooms owner Libstar plunged 24% after a trading update, while Tiger Brands, which was under pressure on Thursday, lost a further 7.6%
The JSE’s food producers index suffered a 3% slump on Friday morning following trading updates from three of its constituents.
Recently listed food group Libstar’s share price plunged 24% to R8.52 on Friday morning after it indicated its maiden results as a public company would be far lower than indicated in its prospectus.
Libstar said it expected to report on September 4 that its headline earnings per share (HEPS) from continuing operations for the six months to end-June would be about half the 25c reported in the comparative period.
Its discontinued operations would contribute a headline loss per share of up to 1.2c.
Libstar said its profitability suffered from "a national oversupply of fresh mushrooms and the lower-margin Sonnendal Dairies business acquisition, which has enhanced the group’s yoghurt manufacturing capabilities".
Larger rival Tiger Brands continued its slide on Friday morning, losing a further 7.6% to R275.72 following Thursday’s 9% drop after it warned its 2018 financial year HEPS would decline by up to 37%.
RCL, which issued a trading statement after the JSE closed on Thursday saying its HEPS for the year to end-June would rise by up to 57.5%, fell 3% to R16.90 on Friday morning.
"The improvement was driven by the recovery in the chicken business unit, strong volume performances in the dressings, pet food and pies categories, lower interest costs and a tax credit related to an energy efficiency allowance," RCL said in its trading statement.
An exception to Friday morning’s food producer rout was Rhodes Food Group, whose share price gained 5% to R19.95 without it issuing any trading updates or other news.