Cheese and yoghurt were the only things clearly working at Libstar this half. The JSE-listed food producer reported revenue essentially flat at R5.80 billion for the six months to June, with headline earnings per share down 29.1%. The damage sat on its ambient side, the shelf-stable half of the business. The part that carried its weight was a dairy brand most South Africans know from the fridge door.
Libstar is not really a brand. It is a shelf of them: Lancewood, Goldcrest, Cape Herb & Spice, Cecil Vinegar, Montagu Foods. It splits itself into things that keep at room temperature and things that need refrigerating, roughly half the revenue on either side. The room-temperature half had the bad half-year, hit by a lost contract at Dickon Hall Foods, a disruptive integration into Montagu Foods, weaker private-label exports to Japan and Australia, and a stronger rand taking a bite out of each of those.
What Lancewood actually did
Libstar told News24 after the results that Lancewood picked up about R108 million of retail market share over the year, adding 0.7 percentage points of share in cheese and 0.9 in yoghurt. That number is worth handling carefully. It appears in none of the company's filed documents: not the SENS announcement, not the results booklet, not the presentation. It is a management figure given to a reporter, and the earnings call says only that Lancewood continues to gain share.
Cornél Lodewyks, who ran Lancewood until he became Libstar's group chief operating officer on 1 August, told News24 the gains came out of new lines: Greek yoghurt, high-fat, lactose-free. "We develop those products for a certain need," he said. "If you're lactose intolerant, there's an option for you. If you're on a high-protein, low-calorie diet, then there's a product for you." Behind it, he reckons, is people eating more protein, which is showing up in poultry as well.
The line that fell while the profit rose
The filings complicate that story. Dairy revenue actually fell 0.5% over the half while dairy earnings before interest, tax, depreciation and amortisation rose 17.8%. The gap is mix. Libstar sold less unprocessed raw milk to industrial customers, which dragged reported volumes down, and stripping that out the core natural cheese and yoghurt lines grew 6.2%. The perishables division's gross margin improved to 17.3%.
None of it was enough to hold the group up. Gross margin fell to 21.5%, normalised EBITDA fell 4.3%, and cash generated from operations dropped 31.9%. No interim dividend was declared, which is Libstar's standing policy rather than a signal. The share still closed about 6% higher on the day, in thin trade.
Libstar has bought R16.1 million of land near its George plant to give Lancewood room to make more, and a water recovery project there finishes its first phase in November. Trading since June has improved on the first half. The next numbers are the full year, and Lodewyks's first covering all of it rather than the cheese.
