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Group financial results for the year ended 31 March 2023
PREMIER GROUP LIMITED
(formerly Premier Group Proprietary Limited)
(Incorporated in the Republic of South Africa)
Registration number 2007/016008/06)
JSE share code: PMR
ISIN: ZAE000320321
("Premier", the "Group" or the "Company")
GROUP FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2023
FINANCIAL OVERVIEW
- Revenue increased by 23.4% to R17.9 billion
- Earnings before interest, tax, depreciation, amortisation and impairment losses
(Adjusted EBITDA)* increased by 16.2% to R1.7 billion
- EPS increased by 90.7% to 630 cents per share
- HEPS increased by 39.8% to 634 cents per share
- Normalised HEPS** increased by 22.7% to 552 cents per share
* Prior year EBITDA adjusted by adding back an impairment loss
** Normalised headline earnings per share have been adjusted for foreign exchange
gains on cash and loans of a funding nature and the once off reversal of the accrued
withholding tax on preference dividends when the redeemable preference shares were
converted to ordinary shares
COMMENTARY ON PERFORMANCE
Premier delivered a robust performance for the year ended 31 March 2023, under
dynamic market and trading conditions. Recognising the substantial pressure on our
consumers, Premier has invested in efficiency and capacity to produce basic foods at
affordable prices. The new mega-bakery in Pretoria reached full production levels
within budget, delivering cost savings and improved bread quality. The Group
successfully concluded the acquisition of a bakery in the Western Cape of South
Africa, further expanding its footprint in that region. In addition, synergies were
extracted through the integration of the Mister Sweet acquisition and the changes to
Premier’s sales and merchandising structures were bedded down.
The Group's revenue increased by 23.4% to R17.9 billion for the year, driven by
increases in revenue in both the Millbake and Groceries and International categories
of 25.4% and 14.5% respectively.
Earnings per share (EPS) increased by 90.7% to 630 cents and headline earnings per
share (HEPS) increased by 39.8% to 634 cents compared to the prior year. Normalised
headline earnings per share increased by 22.7% to 552 cents.
The improvement in EPS, HEPS and Normalised HEPS is a result of the growth in the
Group's operating profit and the after-tax effect of the net finance costs being
reduced as a result of the shareholder funding exchanged for equity during the year.
During the year, the Brait shareholder loan of R1.5 billion was ceded for equity and
the redeemable preference shares of R1.8 billion were converted to equity. As a
result, 224 686 additional ordinary shares of the Company, being the number of shares
prior to the subdivision of the ordinary shares in a ratio of 1:200, were issued to
Brait as settlement of the shareholder funding.
The Group refinanced its long-term debt and increased its drawn debt by R1.04 billion
with lower interest rates, increased flexibility and a bullet repayment profile.
R934 million of the proceeds was distributed to its shareholders on 4 November 2022.
A voluntary capital repayment on borrowings of R294 million was made during the year.
This capital repayment is available to be drawn in the future as part of the
refinanced debt.
DIVIDENDS
The Company started trading on the Johannesburg Stock Exchange six days prior to the
financial year-end. Consequently, no dividends were declared by the board of
directors for the year ended 31 March 2023. The Company’s current intention is to
declare a maiden dividend following the release of its FY2024 results.
MILLBAKE
The Millbake division delivered a robust performance for the year. Despite evident
macroeconomic headwinds it is well positioned to drive further growth through a
relentless focus on efficiencies and being the lowest cost producer. The new state-
of-the-art mega-bakery in Pretoria was fully commissioned during the year and several
of the Millbake facilities have been upgraded to establish best-in-class operations
to ensure efficient and reliable delivery of top-quality product.
GROCERIES AND INTERNATIONAL
The Groceries and International division delivered an encouraging performance
supported by good growth in Sugar Confectionery and Home and Personal Care. The
Group's business division in Mozambique, CIM, had a tough year with the Mozambican
economy continuing to experience several economic challenges. Management is focusing
on innovation, operational efficiencies and capital investment to unlock continuous
improvement opportunities, automation and category growth.
OUTLOOK
Premier is proud of the strong performance achieved for the year. Improving
distribution, product availability and forward share management will remain a
strategic priority to increase market penetration, as well as a focus on innovation
and product renovation to strengthen product margins and brand equity. Premier’s
intention is to continue leveraging its infrastructure and capabilities through
investment in its assets, its people, brands and production capability, as well as
ongoing business integration and optimisation in pursuit of being the lowest cost
producer.
Despite a softening in raw material input cost inflation in recent months, operational
cost inflation is anticipated to prevail given the rise in interest rates and the
local inflationary impact of the weakened exchange rate. Loadshedding continues to
impose multiple operational challenges, but future performance of the Group is not
expected to be materially impacted. Premier will continue to take the necessary steps
to protect its margins across the various categories.
Any forward-looking information contained in this announcement has not been reviewed
or reported on by the Group’s auditors.
ABOUT THIS ANNOUNCEMENT
The contents of this short-form announcement are the responsibility of the directors
of the Company and have not been reviewed or audited by the Group’s auditor.
Shareholders are advised that this short-form announcement represents a summary of
the information contained in the full announcement and does not contain full or
complete details as published on the Stock Exchange News Service and on Premier’s
website, https://www.premierfmcg.com/investors/results-reports on 6 June 2023.
With respect to the consolidated financial statements for the year ended 31 March
2023, the auditors, PricewaterhouseCoopers Inc., have issued an unqualified audit
opinion in terms of International Standards on Auditing. The auditors' unqualified
audit report, along with their key audit matters and the audited Annual Financial
Statements, are available on Premier’s website,
https://www.premierfmcg.com/investors/results-reports
Any investment decisions by investors and/or shareholders should be based on
consideration of the full announcement as a whole which is available for viewing at
https://senspdf.jse.co.za/documents/2023/JSE/ISSE/PMRE/06062023.pdf
or on the Group’s website set out above.
The full announcement is available for inspection at the Group’s registered office
and at the offices of its sponsor at no charge, during office hours of 08h00 to
16h30, Monday to Friday. Investors and/or shareholders may also request copies of
the full announcement by contacting the company secretary at
retha.stoltz@premierfmcg.com.
Independent Non-executive directors
CJ Roodt (Chairperson), FN Khanyile, H Ramsumer and W Sihlobo
Non-executive directors
RM Hartmann, PRN Hayward-Butt (alternate director to RM Hartmann), JER Matthews and
I van Heerden.
Executive directors
JJ Gertenbach (Chief Executive Officer), F Grobbelaar (Chief Financial Officer)
Company secretary: M Stoltz
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date of release: 6 June 2023
Date: 06-06-2023 07:30:00
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