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.

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