SEKGABO MOLELEKOA: Potential for value to be unlocked at Libstar
Packaged goods retailer should continue to pay dividends
A couple of reasons why Libstar is a good investment case: it is going through a consolidation phase of rationalising business lines and growing businesses organically; the balance sheet is being degeared; cash flows are attractive; it has a strong and diverse customer base and should continue to pay dividends since declaring a maiden dividend after its 2018 full-year earnings. Indications are that these should be paid out on a ratio of between three to four times cover.
Of the seven product categories, four are considered core and these drove the results. The noncore categories, which make up 12% of revenue and 5% of normalised earnings before interest, tax, depreciation and amortisation (ebitda) comprise strategic legacy businesses, not necessarily held for sale...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.