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LIBSTAR HOLDINGS LIMITED - Reviewed Interim Results Six Months ended 30 June 2019

Release Date: 04/09/2019 07:05
Code(s): LBR     PDF:  
 
Wrap Text
Reviewed Interim Results Six Months ended 30 June 2019

Libstar Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 2014/032444/06)
(JSE share code: LBR)
(ISIN: ZAE000250239)
("Libstar" or the "company" or the "group")

Reviewed Interim Results Six Months ended 30 June 2019

Salient Features

Against the backdrop of a weak retail and consumer environment, Libstar delivered a resilient performance. The key contributors were the group's core categories of Perishables,
Ambient Groceries, Snacks and Confectionery and Baking and Baking Aids.

The Group uses normalised EBITDA, normalised EPS and normalised HEPS, which exclude non-recurring, non-trading & non-cash items, as key measures to indicate its true
operating performance:

Normalised EBITDA increased by 5.9%
Normalised EPS increased by 13.2%
Normalised HEPS increased by 12.4%

Rm                                                                                   H1 2019         % change          H1 2018

Revenue                                                                                4 617            +4.6%            4 415
Gross Profit margin                                                                     23.2%                             20.9%
Normalised operating profit                                                              339            +5.0%              323
(margin)                                                                                 7.3%                              7.3%
Normalised EBITDA                                                                        425            +5.9%              401
(margin)                                                                                 9.2%                              9.1%
Normalised EPS (cents)                                                                  30.9           +13.2%             27.3
Normalised HEPS (cents)                                                                 30.9           +12.4%             27.5
Reported total basic and diluted EPS (cents)*                                            8.7           -28.7%             12.2
Reported total basic and diluted HEPS (cents)**                                         18.6           +50.0%             12.4

* Mainly due to the exit and R59.4 million impairment of the non-core dairy blend and fruit concentrate business held-for-sale
** Mainly due to the significant reduction in net interest expense

About Libstar

Libstar is a leading producer and supplier of high-quality products in the consumer packaged goods ("CPG") industry. It markets a wide range of products in South Africa and
globally. The Group provides a multi-product offering in several categories across a range of channels. Libstar is strategically positioned within the food and beverage and
household and personal care ("HPC") sectors to maintain the flexibility to capitalise on growth areas in the CPG industry.

Group Trading and Financial Performance

To facilitate comparison with the operating performance of the Group for H1 2018 ('the comparative period'), H1 2019 numbers in the commentary section of this announcement
have been presented on a like-for-like basis, which excludes the impact of the first-time adoption of IFRS 9 (hedge accounting) and IFRS 16 (leases), unless otherwise indicated.

As indicated at year-end, the Group has structured its businesses around core and non-core categories. The core categories include Perishables, Ambient Groceries,
Snacks and Confectionery and Baking and Baking Aids whilst the non-core categories are Household and Personal Care, Niche Beverages and Specialised Food Packaging. The
dairy blend and fruit concentrate business of Elvin, in the non-core category, is currently held for sale and the comparative period has been restated to reflect this.

Revenue

Group revenue for the period was up 4.6%. Organic revenue growth from our core categories, which constitute 88% of the Group's revenue base, was 5.3%. This was mainly as a
result of increased volume sales of baked goods, as well as a significant increase in dry condiment exports.

Revenue from non-core categories, which represent 12% of revenue, declined by 1.5%. Despite the improvement in sales mix, significant volume declines in the outsourced and
export markets impacted the results.

Gross profit margins

Gross profit margins for the Group improved from 20.9% to 23.2%, mainly as a result of favourable changes in the sales mix of value-added dairy products and lower input costs of
dry condiments. The Group's continued focus on procurement practices and production efficiencies, is also reflected in the improved gross profit margin.

Operating profit and EBITDA

Normalised operating profit increased by 5.0%, with margins remaining constant at 7.3%.

Group normalised EBITDA increased by 5.9% and normalised EBITDA margins remained constant (9.1% in H1 2018 vs 9.2% in H1 2019). Normalised EBITDA from the Group's core
categories increased by 8.5%, contributing 95.5% of Group EBITDA. The remaining 4.5% of normalised EBITDA was contributed by the non-core categories and showed a decline
of 17.6% on the comparative period.

Net interest expenses

The Group's net interest expense declined by 40.7% to R78.3 million. This is due to the R700 million reduction in net debt levels after Libstar's JSE listing in May 2018 and the
November 2018 renegotiation of Group debt facilities on more favourable terms.

Earnings and headline earnings

Normalised earnings increased by 29.8% to R185.4 million (30.9 cents per share), mainly as a result of a significant reduction in the group's net interest expense.

Normalised headline earnings increased by 28.7% to R185.2 million.

Cash flows and working capital

Cash generated from operating activities increased by 49.3% to R120 million, largely as a result of the reduced net interest expense. Net working capital as a percentage of revenue
(13.8%) remains within the group's target of 13-15%. The Group continues to invest in capacity-enhancing projects in identified growth areas, with capital expenditure of R162
million (H1 2018: R152 million), representing 3.5% of net revenue. This was slightly above the Group's normal range of 2.5-3.0% and included R43 million in plant upgrades at
Lancewood and R23 million in respect of the new par-bake frozen facility at Amaro Foods.

Other material cash outflows during the six months under review include the settlement of the Group's annual dividend of R132 million, declared on 13 March 2019, and the
repurchase of shares of R92 million.

Category Results

                                                                                  6 months         6 months
                                                                                     ended            ended
                                                                                   30 June          30 June
                                                                                      2019             2018         Change
Revenue                                                                              R'000            R'000              %

Perishables                                                                      2 205 332        2 172 598            1,5
Ambient Groceries                                                                1 311 823        1 218 946            7,6
Snacks and Confectionery                                                           239 167          212 322           12,6
Baking and Baking Aids                                                             313 925          255 766           22,7
Niche Beverages                                                                     53 509           71 112          (24,8)
Household and Personal Care                                                        373 076          377 519           (1,2)
Specialised Food Packaging                                                         120 044          106 537           12,7


                                                                                  6 months         6 months
                                                                                     ended            ended
                                                                                   30 June          30 June
                                                                                      2019             2018         Change
Normalised EBITDA                                                                    R'000            R'000              %

Perishables                                                                        200 717          189 388            6,0
Ambient Groceries                                                                  178 923          157 633           13,5
Snacks and Confectionery                                                            35 917           34 977            2,7
Baking and Baking Aids                                                              41 859           39 758            5,3
Niche Beverages                                                                      1 232            6 047          (79,6)
Household and Personal Care                                                         16 803           15 922            5,5
Specialised Food Packaging                                                           3 467            4 139          (16,2)

Core Categories

A pleasing performance was achieved by all of the core categories. A favourable change in the sales mix of dairy products and lower dry condiment input costs resulted in an
improvement in core category gross profit margins from 21.5% to 23.9%. Normalised operating profit margins increased from 9.2% to 9.4% and normalised EBITDA margins
increased from 10.9% to 11.2%.

Perishables

48% of group revenue
42% of group normalised EBITDA

Revenue from Perishables, the group's single largest contributor to revenue and profit, increased 1.5%. A 3.2% decline in volumes was more than compensated for by a 4.7%
positive price/mix change. The decline in volumes was mainly as a result of significantly lower sales of value-added chicken products due to lower demand from customers in the
food service channel. Fresh mushrooms delivered positive volume and price growth off the low H1 2018 base.

A significant improvement in the sales mix of dairy products following the launch of a range of eating yoghurts in Q3 2018 was the main contributor to the improvement in category
gross profit margins from 17.9% to 20.9% and also contributed to the increase in normalised operating profit and normalised EBITDA which grew by 2.4% and 6.0% respectively.

The normalised EBITDA margin for the category improved from 8.7% to 9.1%.

Ambient Groceries

28% of group revenue
37% of group normalised EBITDA

Revenue from Ambient Groceries, the group's second largest contributor to revenue and profit, was buoyed by strong double-digit revenue growth in local market private label
spices and seasonings and a significant recovery in dry condiment export markets.

Wet condiment sales improved following the consolidation of the Montagu and Denny wet condiment manufacturing facilities in the prior year and improved sales from Dickon Hall
Foods following the strike in H1 2018. Plant integration costs at Montagu and a lower demand from customers within the outsourced manufacturing channel at Dickon Hall Foods,
however negatively impacted on the category EBITDA performance.

Khoisan Gourmet, the Group's main contributor to the tea sub-category, was transferred from Niche Beverages to the Ambient Groceries category to better align the disclosure of
the segment.

The Ambient Groceries category gross profit margin improved from 25.7% to 28.6%, mainly as a result of lower dry condiment input prices.

Normalised operating profit and normalised EBITDA increased by 16.9% and 13.5% to R156 million and R179 million respectively, whilst normalised EBITDA margins improved from
12.9% to 13.6%.

Snacks and Confectionery

5% of group revenue
7% of group normalised EBITDA

Revenue from the Snacks and Confectionery category grew 12.6% to R239 million. The new Pringle potato snack facility was commissioned during June 2019 and is expected to
contribute to a stronger H2 normalised EBITDA performance within the category.

Gross profit margins in the category declined from 26.1% in the prior period to 24.8%, largely due to increased promotional activity in nut tubs and peanut snacks.

Normalised operating profit declined by 2.9% to R29 million, while normalised EBITDA increased 2.7% to R36 million. The planned snack bar launch in September 2019 is
expected to bolster H2 normalised EBITDA performance.

Baking and Baking Aids

7% of group revenue
9% of group normalised EBITDA

Revenue from Baking and Baking Aids increased by 22.7% to R314 million as a result of strong double-digit volume growth from the sales of rolls, buns, flat breads and wraps due
to increased innovation in the category. This was slightly offset by lower private label revenue from soups and jellies within the Baking Aids sub-category.

An adverse change in the baked goods sales mix resulted in a decline of the category gross profit margin from 27.6% to 24.2%.

Normalised operating profit and normalised EBITDA increased by 0.9% and 5.3% to R31 million and R42 million respectively.

Non-Core Categories

The performance from the group's non-core categories was disappointing. Normalised operating profit declined by 19.5% to R12 million, mainly due to a weaker performance in
Niche Beverages (off a high H1 2018 base). Normalised EBITDA declined by 17.6% to R22 million.

Niche Beverages

1% of group revenue
0% of group normalised EBITDA

During H1 2019, the group entered into a binding sales agreement to exit the non-core dairy-blend and fruit concentrate beverage operations. This agreement is subject to
customary conditions precedent, including approval by The Competition Commission of South Africa. The transaction is not categorised in terms of the JSE Listings Requirements.
On classification of this operation as held for sale, a pre-tax impairment loss of R73.0 million (R59.4 million post-tax) was recognised mainly in respect of the brands and goodwill
attributable to the asset to align the carrying value of the assets held for sale to the purchase consideration in accordance with the transaction.

Revenue from the remaining Niche Beverages businesses, which comprise Chamonix Springwater and the non-beverage Elvin operations (which will in future be reported under
the Ambient Groceries category following the operational integration with the group's wet condiment facilities) declined by 24.8%. This was mainly due to a decline in water sales
compared to the high base set in the prior period as a result of the drought experienced in the Western Cape.

Normalised operating profit and normalised EBITDA for the period were breakeven and R1 million respectively compared to respective profits of R5 million and R6 million.

Household and Personal Care

8% of group revenue
4% of group normalised EBITDA

Revenue from Household and Personal Care products decreased by 1.2% to R373 million. Gross profit margins improved from 15.9% to 18.1% due to an improved sales mix,
resulting in a R3 million (38.6%) increase in normalised operating profit and a R1 million (5.5%) increase in normalised EBITDA to R10 million and R17 million respectively.

An operational amalgamation of the businesses within the HPC cluster will be implemented during H2 2019. This is expected to yield further cost rationalisation benefits and
improve the group's sales, marketing, distribution and logistics capabilities within the category.

Specialised Food Packaging

3% of group revenue
1% of group normalised EBITDA

Revenue from Specialised Food Packaging increased 12.7% to R120 million. Although gross profit margins were maintained at 22.9% compared to 23.0% in H1 2018, normalised
operating profit and normalised EBITDA decreased R0.9 million and R0.7 million respectively due to increased operating costs.

Outlook

Revenue from dealer-own brands and private label contributed 46% of Libstar's Group gross revenue during H1 2019, up from 45% in the comparative period as revenue from
private label products within the broader South African market continues to outstrip the growth in named brands.

Libstar is well positioned through its ability to innovate and differentiate products and its ability to develop category plans for retail customers. The Group should therefore continue
to grow its share of the relevant markets by its dealer-own brand and private label offerings.

Innovation, as a means of growth, remains a core pillar of organic growth for Libstar, with over 350 new or renovated products launched during H1 2019.

During H2 2019, Libstar will continue its efforts to:

- develop categories and channels especially within the food service, retail, wholesale, independent and export channels;
- standardise IT platforms, invest in logistics tracking and improve its overall manufacturing efficiency measures;
- reduce operating costs through improved productivity, target costing and product re-engineering, and
- invest in new technologies and capacity-expanding projects within core categories, with a further R57 million, R26 million and R15 million earmarked for planned upgrades
  at Lancewood, Millennium Foods and Ambassador Foods respectively.

In H1 2019, Libstar recorded the benefits from capex projects completed in 2018, namely the new granola plant, the health bar capacity expansion (with additional expansion to
come through in the current year) and the new meat slicing plant. Benefits have not yet flowed from the new chicken plant with new markets being developed both locally and in
the export markets. The Montagu/Denny Foods integration was slow to come online with several equipment problems and has only settled down in early H2 2019.

H2 2019 is expected to reflect the benefits from the commissioning of the par-bake frozen plant (late May) and the Pringles manufacturing plant (June). Furthermore, the local
production of Kiri and Laughing Cow soft cheese is expected to commence in Q4 2019.

Libstar's approximate 40:60 H1:H2 normalised EBITDA ratio is expected to remain largely intact although aggressive competitor discounting and constrained demand within the
markets in which the Group operates, is expected to continue during H2 2019.

Shareholder Update

Shareholders are referred to an Actis media release dated 15 July 2019 wherein Actis advised that it has assumed management rights on Abraaj Private Equity Fund IV (APEF IV), a
global buyout fund, and Abraaj Africa Fund III (AAF III), a fund for investment in sub-Saharan Africa.

Libstar is a portfolio investment of APEF Pacific Mauritius Ltd (APEF Mauritius) which in turn is a portfolio investment of, inter alia, APEF IV and AAF III. APEF Mauritius holds
252,463,077 Libstar shares or 37.02% of the total voting rights of the company.

Actis is a leading investor in growth markets across Africa, Asia and Latin America. Founded in 2004, Actis has raised US$15bn since inception and employs over 200 people,
including a team of c.120 investment professionals, working across 16 offices globally.

Dividend

In line with Group policy, the Board will assess the declaration of a dividend once per annum, at publication of final results once full-year trading is concluded.

Changes To The Board And Committee Compositions

In light of the change in the management rights of the Abraaj shareholding as outlined above, Mr Wahid Hamid, who represented Abraaj on the Libstar board, has resigned as a
non-executive director of Libstar Holdings Limited, chairman of the Remuneration Committee and member of the Investment Committee with effect from 12 August 2019. The
Board wishes to thank Mr Hamid for his contributions to Libstar and wishes him well in his future endeavours. In accordance with its mandate, the Board has appointed Mr
Sandeep Khanna as chairman of the Remuneration Committee and Mr JP Landman as a member of the Remuneration Committee with effect from 03 September 2019.

The Nominations committee will continue its assessment of the structure and composition of the Board and its committees.

By order of the Board

Johannesburg
03 September 2019

WYN Luhabe
Chairman

AV van Rensburg
Chief Executive Officer

RW Smith
Financial and Commercial Director

SENS release

The announcement was released on the JSE's Stock Exchange News Service (SENS) on 04 September 2019 and can be found on the company's website at http://www.libstar.co.za or at
https://senspdf.jse.co.za/documents/2019/jse/isse/lbre/LBRH119.pdf.

The full announcement is available for inspection at the Company's registered office and copies may also be requested at the company's registered office and at the offices of the
sponsor, at no charge, during office hours.

Pro Forma Financial Information

As the half-year comparative period normalised earnings and normalised headline earnings have not been previously reported, this information constitutes pro-forma financial
information in terms of the JSE Listings Requirements. The pro forma financial information presented in this announcement, which is the responsibility of the group's directors, has
been prepared for illustrative purposes only, and may not fairly present the group's financial position, changes in equity, results of operations or cash flows.

Forward-Looking Statements

Any forward-looking statements included in this results announcement involve known and unknown risks, uncertainties and other factors, which may cause the actual results,
performance or achievements of the group to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Any
reference to forward-looking information included in this results announcement does not constitute an earnings forecast and has not been reviewed or reported on by the Group's
external auditors.

Condensed Consolidated Statement of Comprehensive Income

                                                                                                   6 months         6 months
                                                                                                      ended            ended      Year ended
                                                                                                    30 June          30 June     31 December
                                                                                                       2019          2018(1)         2018(1)
                                                                                                   Reviewed         Reviewed         Audited
                                                                                      Notes           R'000            R'000           R'000
CONTINUING OPERATIONS
Revenue                                                                                           4 616 876        4 414 800       9 659 597
Cost of sales                                                                                    (3 544 339)      (3 490 711)     (7 493 654)

Gross profit                                                                                      1 072 537          924 089       2 165 943
Other income                                                                              5          14 255            6 629          17 995
Operating expenses                                                                        6        (816 224)        (701 758)     (1 562 419)

Operating profit                                                                                    270 568          228 960         621 519
Investment income                                                                                    25 219           21 027          47 617
Finance costs                                                                                      (128 158)        (153 052)       (269 310)

Profit before tax                                                                                   167 629           96 935         399 826
Income tax expense                                                                                  (48 985)         (24 883)       (125 907)

Profit for the period from continuing operations                                                    118 644           72 052         273 919

DISCONTINUED OPERATIONS
Loss for the period from discontinued operations and operations held for sale             7         (65 807)          (9 760)        (50 906)

Profit for the period                                                                                52 837           62 292         223 013

Other comprehensive income for the period, net of tax                                                 8 752             (247)           (417)

Defined benefit plan actuarial losses                                                                     -             (247)           (417)
Gains on hedging reserves                                                                             8 752                -               -

Total comprehensive profit for the period                                                            61 589           62 045         222 596

Profit/(loss) attributable to:
Equity holders of the parent                                                                         52 232           63 820         222 224
Non-controlling interest                                                                                605           (1 528)            789
                                                                                                     52 837           62 292         223 013

Total comprehensive income/(loss) attributable to:
Equity holders of the parent                                                                         60 984           63 573         221 807
Non-controlling interest                                                                                605           (1 528)            789
                                                                                                     61 589           62 045         222 596

Basic and diluted earnings per share (cents)

From continuing operations                                                                8            19,7             14,1            48,2
From continuing and discontinued operations                                               8             8,7             12,2            39,2

Headline earnings per share (cents)

From continuing operations                                                                8            19,7             14,3            48,7
From continuing and discontinued operations                                               8            18,6             12,4            45,9

1. The comparatives have been restated to reflect dairy blend and fruit concentrate operations as a discontinued operation.


Condensed Consolidated Statement of Financial Position

                                                                                                                       At
                                                                                  At 30 June   At 30 June     31 December
                                                                                        2019         2018            2018
                                                                                    Reviewed     Reviewed         Audited
                                                                     Notes             R'000        R'000           R'000
ASSETS
Non-current assets                                                                 6 388 407    6 031 717       6 009 716

Property, plant and equipment                                                      1 263 716    1 103 649       1 205 921
Lease asset                                                             10           464 430            -               -
Goodwill                                                                           2 496 058    2 521 058       2 521 058
Intangible assets                                                                  2 144 357    2 376 992       2 269 199
Other financial assets                                                                 6 608        8 860           8 018
Operating lease asset                                                                      -        4 248           5 418
Deferred tax assets                                                                   13 238       16 910             102

Current assets                                                                     3 764 554    3 667 931       3 784 159

Inventories                                                                        1 192 812    1 188 231       1 121 330
Trade and other receivables                                                        1 557 825    1 482 091       1 628 038
Biological assets                                                                     27 635       26 990          26 662
Other financial assets                                                                30 268       24 562          17 921
Current tax receivable                                                                29 738       61 031           2 796
Cash and bank balances                                                               926 276      885 026         987 412

Assets classified as held for sale                                                    36 444       21 834               -

Total assets                                                                      10 189 405    9 721 482       9 793 875

EQUITY AND LIABILITIES
Capital and reserves attributable to
equity holders of the parent                                                       5 197 244    5 260 384       5 410 079

Share capital                                                                      4 727 314    4 829 235       4 818 884
Defined benefit plan reserve                                                          (1 757)      (1 587)         (1 757)
Retained earnings                                                                    538 103      509 716         668 120
Premium on acquisition of non-controlling interests                                  (75 168)     (67 484)        (75 168)
Hedging reserves                                                                       8 752            -               -
Put options exercisable by non-controlling interests and executive
management                                                                                 -       (9 496)              -

Non-controlling interests                                                              9 266       10 028           8 661

Total equity                                                                       5 206 510    5 270 412       5 418 740
Non-current liabilities                                                            3 178 001    2 439 078       2 722 450

Other financial liabilities                                                        1 923 382    1 604 677       1 921 591
Lease liability                                                         10           515 903            -               -
Deferred tax liabilities                                                             725 185      805 761         769 960
Employee benefits                                                                      5 565        8 197           8 919
Share appreciation rights                                                              7 966       12 342           8 860
Operating lease liability                                                                  -        8 101          13 120

Current liabilities                                                                1 803 600    2 001 834       1 652 685

Trade and other payables                                                           1 324 561    1 388 058       1 401 337
Other financial liabilities                                                          120 980      372 077          77 086
Lease liability                                                         10            38 977            -               -
Current tax payable                                                                        -        3 442           4 239
Share appreciation rights                                                              3 123            -          11 951
Bank overdraft                                                                       315 959      238 257         158 072

Liabilities directly associated with assets
classified as held for sale                                                            1 294       10 158               -

Total liabilities                                                                  4 982 895    4 451 070       4 375 135

Total equity and liabilities                                                      10 189 405    9 721 482       9 793 875


Condensed Consolidated Statement of Changes in Equity

                                                                                                                                                             Put options
                                                                                                                     Premium on                           exercisable by
                                                                                                                    acquisition                          non-controlling
                                                                                                       Defined          of non-                            interests and                               Non-
                                                                                       Share      benefit plan      controlling         Retained               executive          Hedging       controlling
                                                                                     capital        reserve(1)     interests(2)         earnings           management(3)      reserves(4)         interests            Total
                                                                                       R'000             R'000            R'000            R'000                   R'000            R'000             R'000            R'000

Balance at 01 January 2018                                                         4 187 177            (1 340)         (63 624)         445 896                  (8 836)               -             7 696        4 566 969
Total comprehensive income for the period                                                  -              (247)               -           63 820                       -                             (1 528)          62 045

Profit or loss for the period                                                              -                 -                -           63 820                       -                -            (1 528)          62 292
Other comprehensive income for the period                                                  -              (247)               -                -                       -                -                 -             (247)

Transactions with owners of the Company
Contributions and distributions                                                      642 058                 -                -                -                       -                -                 -          642 058

Capital distribution                                                                (800 000)                -                -                -                       -                -                 -         (800 000)
Issue of shares                                                                    1 500 730                 -                -                -                       -                -                 -        1 500 730
Held as treasury shares                                                                 (730)                -                -                -                       -                -                 -             (730)
Capitalisation of costs directly attributable to issue of shares                     (57 942)                -                -                -                       -                -                 -          (57 942)

Changes in ownership interests                                                             -                 -           (3 860)               -                       -                -             3 860                -

Purchase of non-controlling interest in subsidiary                                         -                 -           (3 860)               -                       -                -             3 860                -

Movement in put options                                                                    -                 -                -                -                    (660)               -                 -             (660)

Fair value adjustment through equity                                                       -                 -                -                -                    (660)               -                 -             (660)

Balance at 30 June 2018                                                            4 829 235            (1 587)         (67 484)         509 716                  (9 496)               -            10 028        5 270 412

Total comprehensive income for the period                                                  -              (170)               -          158 404                       -                -             2 317          160 551

Profit or loss for the period                                                              -              (170)               -          158 404                       -                -             2 317          160 551

Transactions with owners of the Company
Contributions and distributions                                                      (10 351)                -                -                -                       -                -                 -          (10 351)

Share buy back                                                                        (7 964)                -                -                -                       -                -                 -           (7 964)
Capitalisation of costs directly attributable to issue of shares                      (2 387)                -                -                -                       -                -                 -           (2 387)

Changes in ownership interests                                                             -                 -           (7 684)               -                       -                -            (3 684)         (11 368)

Purchase of non-controlling interest in subsidiary                                         -                 -           (7 684)               -                       -                -            (3 684)         (11 368)

Movement in put options                                                                    -                 -                -                -                   9 496                -                 -            9 496

Fair value adjustment through equity                                                       -                 -                -                -                   9 496                -                 -            9 496

Balance at 31 December 2018                                                        4 818 884            (1 757)         (75 168)         668 120                       -                -             8 661        5 418 740

Total comprehensive income for the period                                                  -                 -                -           52 232                       -            8 752               605           61 589

Profit or loss for the period                                                              -                 -                -           52 232                       -                -               605           52 837
Other comprehensive income for the period                                                  -                 -                -                -                       -            8 752                 -            8 752

Transactions with owners of the Company
Contributions and distributions                                                      (91 570)                -                -         (131 689)                      -                -                 -         (223 259)

Share buy back                                                                       (91 570)                -                -                -                       -                -                 -          (91 570)
Dividends paid                                                                             -                 -                -         (131 689)                      -                -                 -         (131 689)

Adoption of new accounting standard                                                        -                 -                -          (50 560)                      -                -                 -          (50 560)

IFRS 16 adoption                                                                           -                 -                -          (50 560)                      -                -                 -          (50 560)


Balance at 30 June 2019                                                            4 727 314            (1 757)         (75 168)         538 103                       -            8 752             9 266        5 206 510

Notes
1. Defined benefit plan reserve: Reserves comprises actuarial gains or losses in respect of defined benefit obligations that are recognised in other comprehensive income.
2. Premium on non-controlling interests: Represents the difference between the carrying amount of the non-controlling interests and the fair value of the consideration given on acquisition of non-controlling interests.
3. Put options exercisable by non-controlling interest and executive management relates to the liability raised in respect of put options exercisable by non-controlling interests and executive management.
4. Hedging reserves: Represents the gains relating to foreign currency transactions recognised in other comprehensive income.


Condensed Consolidated Statement of Cash Flows

                                                                                                    6 months      6 months
                                                                                                       ended         ended       Year ended
                                                                                                     30 June       30 June      31 December
                                                                                                        2019          2018             2018
                                                                                                    Reviewed      Reviewed          Audited
                                                                                        Notes          R'000         R'000            R'000

NET CASH FLOW FROM OPERATING ACTIVITIES                                                              119 617        80 104          505 044

Cash generated from continuing operations                                                  12        310 169       311 833          876 187
Investment income received                                                                            25 219        21 027           47 617
Finance costs paid                                                                                  (103 557)     (153 052)        (269 310)
Taxation paid                                                                                       (107 951)      (91 646)        (139 341)
Cash utilised by discontinued operations                                                              (4 263)       (8 058)         (10 109)

NET CASH FLOW FROM INVESTMENT ACTIVITIES                                                            (160 304)     (150 845)        (345 979)

Purchase of property, plant and equipment and computer software                                     (161 525)     (151 582)        (348 745)
Sale of property, plant and equipment and computer software                                                -           737            3 505
Other financial assets (repaid)/advanced                                                               1 221             -           (1 739)
Proceeds from sale of discontinued operations                                                              -             -            1 000

NET CASH FLOW FROM FINANCING ACTIVITIES                                                             (178 336)      362 533          318 948

Proceeds from issue of equity shares                                                                       -     1 500 000        1 500 000
Capital distribution                                                                                       -      (800 000)        (800 000)
Dividends paid                                                                                      (131 689)            -                -
Share issue costs                                                                                          -        (5 483)         (60 329)
Share buyback                                                                                        (91 570)            -           (7 964)
Loans repaid to shareholders                                                                               -       (19 384)         (17 267)
Loans repaid by shareholders                                                                               -        41 767           39 648
Repayments of other financial liabilities                                                             (1 047)      (35 040)         (34 462)
Repayment of loans from non controlling interests                                                          -       (28 880)         (28 592)
Purchase of non-controlling interests                                                                      -             -          (11 368)
Proceeds from term loans and asset based financing                                                    86 094       846 206        2 584 364
Repayment of term loans and asset based financing                                                    (40 124)   (1 136 653)      (2 845 082)

Net (decrease)/increase in cash and cash equivalents                                                (219 023)      291 792          478 013
Cash and cash equivalents at the beginning of the period                                             829 340       351 327          351 327

Cash and cash equivalents at the end of the period                                                   610 317       643 119          829 340

Continuing operations                                                                                610 317       646 769          829 340

Discontinued operations                                                                                    -        (3 650)               -

Condensed Consolidated Segmental Information



BASIS OF SEGMENTATION

The executive management team of the Group has chosen to organise the Group into categories and manage the operations in that manner. The information reported to the chief
operating decision maker for the purposes of resource allocation and assessment of segment performance is based on seven categories.

The following summary describes each segment:

Perishables
Perishable products are products that are likely to decay or spoil within a short period of time.

Ambient Groceries
Ambient groceries (also known as "shelf-stable" groceries) is a category of foods that can be stored and preserved at room temperature.

Snacks and Confectionery
Premium snacks and confectionery products.

Baking and Baking Aids
Baked goods, specialised gluten free offering and baking aids.

Niche Beverages
The niche beverages product category consists of beverages that do not fall within the mainstream beverage market.

Household and Personal Care
Detergents and household cleaning products.

Specialised Food Packaging
The specialised food packaging product category is made up of custom-made packaging solutions for various food and drink products sold largely in the food services industry.

Reclassifications between segments

During the period under review, management reclassified the tea operations of Khoisan Gourmet from the niche beverages segment to the ambient groceries segment. This aligns
the financial disclosure to the manner in which the tea category is managed.



                                                                                 6 months      6 months
                                                                                    ended         ended                     Year ended
                                                                                  30 June       30 June                    31 December
                                                                                     2019         2018*                          2018*
                                                                                 Reviewed      Reviewed         Change         Audited
                                                                                    R'000         R'000              %           R'000
INFORMATION ABOUT REPORTABLE SEGMENTS
Revenue
Perishables                                                                     2 205 332     2 172 598            1,5       4 569 592
Ambient Groceries*                                                              1 311 823     1 218 946            7,6       2 751 397
Snacks and Confectionery                                                          239 167       212 322           12,6         477 391
Baking and Baking Aids                                                            313 925       255 766           22,7         627 839
Niche Beverages*                                                                   53 509        71 112          (24,8)        138 156
Household and Personal Care                                                       373 076       377 519           (1,2)        846 313
Specialised Food Packaging                                                        120 044       106 537           12,7         248 909
                                                                                4 616 876     4 414 800            4,6       9 659 597
Operating profit (EBIT)
Perishables                                                                       142 444       137 810            3,4         338 942
Ambient Groceries                                                                 129 359        64 514          100,5         222 081
Snacks and Confectionery                                                           26 597        30 221          (12,0)         58 723
Baking and Baking Aids                                                             28 896        25 893           11,6          64 731
Niche Beverages                                                                       219         2 559          (91,4)          6 918
Household and Personal Care                                                        (2 642)          489         (640,4)          5 492
Specialised Food Packaging                                                          1 470         2 399          (38,7)         10 402
Corporate                                                                         (55 775)      (34 925)         (59,7)        (85 770)
                                                                                  270 568       228 960           18,2         621 519
Reconciliation of operating profit per segment to profit before tax
Operating profit                                                                  270 568       228 960           18,2         621 519
Investment income                                                                  25 219        21 027           19,9          47 617
Finance costs                                                                    (128 158)     (153 052)         (16,3)       (269 310)

Profit before tax                                                                 167 629        96 935           72,9         399 826

The chief operating decision maker reviews the revenue and operating profit on a regular basis. The chief operating decision maker does not evaluate any of the Group's assets or
liabilities on a segmental basis for decision making purposes.

* Comparative figures have been reclassified to show the tea operations within the ambient groceries segment.


 
                                                                                6 months        6 months
                                                                                   ended           ended                    Year ended
                                                                                 30 June         30 June                   31 December
                                                                                    2019            2018        Change            2018
                                                                                   R'000           R'000             %           R'000
Normalised EBIT and EBITDA
GROUP - CONTINUING OPERATIONS
Operating profit                                                                 270 568         228 960           18,2        621 519
Amortisation of customer contracts and brands                                     75 086          70 420                       140 841
Due diligence costs                                                                  264             738                         3 319
Expenses relating to share appreciation rights granted                                 -         (21 677)                      (13 208)
Government grants                                                                      -               -                           (46)
Impairment losses on goodwill, customer relationships and brands                       -               -                           556
(Gain)/loss on disposal of property, plant and equipment                            (320)          1 399                         3 190
Costs and fees attributable to the Initial Public Offering                             -           7 303                         5 007
Retrenchment and settlement costs                                                  4 545           1 459                         7 050
Securities transfer tax                                                              221               -                            66
Straight lining of operating leases                                                    -           2 181                         3 694
Strategic advisory fees                                                                -              77                            43
Unrealised loss/(gain) on foreign exchange                                           787          32 173                        45 494
Donations                                                                              -               -                         6 000

Normalised EBIT                                                                  351 151         323 033            8,7        823 525
Amortisation of software                                                           3 560           2 816                         8 017
Depreciation of property, plant and equipment                                    128 146          75 472                       152 914

Normalised EBITDA                                                                482 857         401 321           20,3        984 456
Impact of IFRS 16                                                                (57 951)              -                             -

Normalised EBITDA excluding adoption
of IFRS 16                                                                       424 906         401 321            5,9        984 456

PERISHABLES
Operating profit                                                                 142 444         137 810            3,4        338 942
Amortisation of customer contracts                                                24 496          22 338                        44 676
Due diligence costs                                                                    -              81                             -
Loss on disposal of non-current assets held for sale                                   -               -                           243
(Gain)/loss on disposal of property, plant and equipment                             (68)           (177)                          365
Retrenchment and settlement costs                                                  1 861             747                         2 024
Straight lining of operating leases                                                    -           1 765                         3 530
Strategic advisory fees                                                                -               3                             -
Unrealised loss/(gain) on foreign exchange                                           543            (619)                        5 455

Normalised EBIT                                                                  169 276         161 948            4,5        395 236
Amortisation of software                                                             740             293                           306
Depreciation of property, plant and equipment                                     45 177          27 147                        59 109

Normalised EBITDA                                                                215 193         189 388           13,6        454 652
Impact of IFRS 16                                                                (14 476)              -                             -

Normalised EBITDA excluding adoption of IFRS 16                                  200 717         189 388            6,0        454 652



                                                           6 months     6 months
                                                              ended        ended                  Year ended
                                                            30 June      30 June                 31 December
                                                               2019         2018      Change            2018
                                                              R'000        R'000           %           R'000

AMBIENT GROCERIES
Operating profit                                            129 359       64 513       100,5         222 081
Amortisation of customer contracts                           31 547       31 781                      63 561
Loss on disposal of non-current assets held for sale              -            -                         313
(Gain)/loss on disposal of property, plant and equipment       (208)       1 781                       2 324
Retrenchment and settlement costs                                78          491                       2 201
Straight lining of operating leases                               -          (79)                        257
Unrealised (gain)/loss on foreign exchange                     (332)      35 043                      39 881

Normalised EBIT                                             160 444      133 529        20,2         330 618
Amortisation of software                                      1 247          453                       4 372
Depreciation of property, plant and equipment                38 004       23 651                      44 945

Normalised EBITDA                                           199 695      157 633        26,7         379 935
Impact of IFRS 16                                           (20 772)           -                           -

Normalised EBITDA excluding adoption of IFRS 16             178 923      157 633        13,5         379 935

SNACKS AND CONFECTIONERY
Operating profit                                             26 597       30 221       (12,0)         58 723
Amortisation of customer contracts                            2 201        2 201                       4 402
(Gain)/loss on disposal of property, plant and equipment        (48)          24                          44
Retrenchment and settlement costs                               447            -                           -
Straight lining of operating leases                               -            -                        (112)
Strategic advisory fees                                           -           74                           -
Unrealised loss/(gain) on foreign exchange                      739       (2 353)                       (116)

Normalised EBIT                                              29 936       30 168        (0,8)         62 941
Amortisation of software                                        488          365                         809
Depreciation of property, plant and equipment                 6 907        4 444                       9 301

Normalised EBITDA                                            37 331       34 977         6,7          73 051
Impact of IFRS 16                                            (1 414)           -                           -

Normalised EBITDA excluding adoption of IFRS 16              35 917       34 977         2,7          73 051

BAKING AND BAKING AIDS
Operating profit                                             28 896       25 893        11,6          64 731
Amortisation of customer contracts                            3 435        4 703                       9 406
Loss on disposal of property, plant and equipment                 -            -                          59
Retrenchment and settlement costs                                 -          117                         280
Straight lining of operating leases                               -          (51)                       (666)
Unrealised (gain)/loss on foreign exchange                     (137)         (67)                        258

Normalised EBIT                                              32 194       30 594         5,2          74 067
Amortisation of software                                        421          397                         794
Depreciation of property, plant and equipment                17 175        8 766                      17 774

Normalised EBITDA                                            49 790       39 758        25,2          92 635
Impact of IFRS 16                                            (7 931)           -                           -

Normalised EBITDA excluding adoption of IFRS 16              41 859       39 758         5,3          92 635

SPECIALISED FOOD PACKAGING
Operating profit                                              1 470        2 399       (38,7)         10 402
Amortisation of customer contracts                            1 133        1 133                       2 267
Government grants                                                 -            -                        (46)
Loss/(gain) on disposal of property, plant and equipment          5          (45)                       (65)
Unrealised (gain)/loss on foreign exchange                      (26)           9                         23

Normalised EBIT                                               2 582        3 496       (26,1)        12 581
Amortisation of software                                         50           54                        108
Depreciation of property, plant and equipment                 1 135          588                      1 225

Normalised EBITDA                                             3 767        4 139        (9,0)        13 914
Impact of IFRS 16                                              (300)           -                          -

Normalised EBITDA excluding adoption of IFRS 16               3 467        4 139       (16,2)        13 914

HOUSEHOLD AND PERSONAL CARE
Operating profit                                             (2 642)         489      (640,4)         5 492
Amortisation of customer contracts and brands                12 025        6 092                     12 183
(Gain)/loss on disposal of property, plant and equipment          -         (192)                       407
Retrenchment and settlement costs                             2 159            -                      1 946
Straight lining of operating leases                               -          546                        685
Strategic advisory fees                                           -            -                         42
Unrealised loss/(gain) on foreign exchange                        -          160                         (8)

Normalised EBIT                                              11 542        7 095        62,7         20 748
Amortisation of software                                         12            -                       (569)
Depreciation of property, plant and equipment                13 706        8 827                     16 179

Normalised EBITDA                                            25 260       15 922        58,7         36 357
Impact of IFRS 16                                            (8 457)           -                          -

Normalised EBITDA excluding adoption of IFRS 16              16 803       15 922         5,5         36 357

NICHE BEVERAGES
Operating profit                                                219        2 559       (91,4)         6 918
Amortisation of customer contracts                              249        2 172                      4 345
(Gain)/loss on disposal of property, plant and equipment         (1)         (18)                        17
Retrenchment and settlement costs                                 -          105                        105

Normalised EBIT                                                 467        4 818       (90,3)        11 384
Amortisation of software                                          -            -                          5
Depreciation of property, plant and equipment                 3 620        1 229                      2 669

Normalised EBITDA                                             4 087        6 047       (32,4)        14 058
Impact of IFRS 16                                            (2 855)           -                          -

Normalised EBITDA excluding adoption of IFRS 16               1 232        6 047       (79,6)        14 058



                                                                            6 months     6 months
                                                                               ended        ended                 Year ended
                                                                             30 June      30 June                31 December
                                                                                2019         2018      Change           2018
                                                                               R'000        R'000           %          R'000
CORPORATE
Operating profit                                                             (55 775)     (34 925)      (59,7)       (85 770)
Due diligence costs                                                              264          656                      3 319
Expenses relating to share appreciation rights granted                             -      (21 677)                   (13 208)
Loss on disposal of property, plant and equipment                                  -           28                         40
Costs and fees attributable to the Initial Public Offering                         -        7 303                      5 007
Retrenchment and settlement costs                                                  -            -                        494
Securities transfer tax                                                          221            -                         66
Donation                                                                           -            -                      6 000

Normalised EBIT                                                              (55 290)     (48 615)      (13,7)       (84 052)
Amortisation of software                                                         603        1 253                      2 193
Depreciation of property, plant and equipment                                  2 421          820                      1 712

Normalised EBITDA                                                            (52 266)     (46 542)      (12,3)       (80 147)
Impact of IFRS 16                                                             (1 748)           -                          -

Normalised EBITDA excluding adoption of IFRS 16                              (54 014)     (46 542)      (16,1)       (80 147)

Export revenue
The Group mainly operates in South Africa. Revenue derived from
customers domiciled within South Africa is classified as revenue from
South Africa. Revenue from customers domiciled outside of South Africa is
classified as export revenue.

Export revenue for the year                                                  568 583      584 560        (2,7)     1 270 480

Major customers
During the period under review, revenue from certain customers exceeded
10% of total revenue.
Customer A                                                                       19%          19%                        18%
Customer B                                                                       16%          14%                        14%
Customer C                                                                       11%          12%                        11%


Notes to the Reviewed Condensed Consolidated Financial Statements

1.    Reporting entity

      Libstar is a leading producer and supplier of high quality products in the CPG industry and sells a wide range of products in South Africa and globally. The Group provides a
      multi-product offering in multiple categories across multiple channels, while strategically positioning itself within the food and beverage and HPC sectors.

      The Group currently operates across a number of business units, each of which has its own infrastructure, employees and products. The Group operates a decentralised
      business model, with each business unit being responsible for its own procurement, production, distribution and logistics, sales and marketing and customer relationships.
      Libstar demonstrates a strong management drive and provides a platform for these business units to grow through provision of working capital and investment in
      infrastructure that builds manufacturing capability and capacity.

2.    Basis of accounting

      These reviewed condensed consolidated interim financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS),
      including disclosure requirements of IAS 34 Interim Financial Reporting Standard and comply with the Financial Reporting Guides as issued by the Accounting Practices
      Committee and Financial Reporting Pronouncements as issued by the SAICA Financial Reporting Standards Council, as well as the JSE Listings Requirements and the
      Companies Act, No 71 of 2008.

      This is the first set of the condensed consolidated Group's financial statements in which IFRS 16 (Leases) and hedge accounting have been applied. Changes to significant
      accounting policies are described in Note 3.

      These condensed consolidated interim financial statements have been reviewed in terms of the Companies Act, No 71 of 2008. These condensed consolidated interim
      financial statements have been prepared by P Makate CA(SA) under the supervision of CB de Villiers CA(SA) and R Smith CA(SA) .

      The financial results presented have been reviewed by the Group's independent external auditors, Moore Stephens, who expressed an unmodified review conclusion. A copy
      of the auditor's review report is available for inspection at the Company's registered office.

      The auditor's report does not necessarily report on all of the information contained in this announcement. Shareholders are therefore advised that in order to obtain full
      understanding of the nature of the auditor's engagement they should obtain a copy of that report together with the accompanying financial information from the Company's
      registered office.

3.    Accounting policies

      The accounting policies applied by the Group in these reviewed condensed consolidated interim financial statements are consistent with those applied in the consolidated
      annual financial statements for the year ended 31 December 2018 with the exception of the adoption of the following accounting standards:

      - IFRS 16 - Leases (effective from 1 January 2019).
      - IFRS 9 - Financial Instruments (the group has implemented hedge accounting for the first time from 1 January 2019).

3.1   Leases

      The Group has applied IFRS 16 using the modified retrospective approach, under which the cumulative effect of initial application is recognised in retained earnings at 01
      January 2019. Accordingly, the comparative information presented for financial year 2018 has not been changed. IFRS 16 introduced a single, on-balance sheet accounting
      model for lessees. As a result, the Group, as a lessee, has recognised a right-of-use asset representing its right to use the underlying assets and lease liabilities representing
      its obligation to make lease payments.

      The Group previously classified leases as operating or financing leases based on its assessment of whether the lease transferred substantially all of the risks and rewards of
      ownership. Under IFRS 16, the Group recognises right-of-use asset and lease liabilities for most leases.

      The Group has elected not to recognise right-of-use asset and lease liabilities for some leases of low-value assets. The Group recognise the lease payments associated with
      these leases as an expense on a straight-line basis over the lease term.

3.2   Hedge accounting

      The Group has applied hedge accounting to all forward and swap contracts entered into from 01 January 2019.

      The Group hedges the majority of its foreign currency exposures. Import-related exposures are hedged to the value of 6 to 9 months' forecast imports and export-related
      exposures are hedged to the value of 9 to 12 months' forecast exports, or within 48 hours of receipt of a firm order, whichever date is earlier. Hedging instruments are limited
      to standard foreign exchange contract (FEC's) only.

      A foreign currency transaction is recognised, on initial recognition in South African Rands, by applying to the foreign currency amount the spot exchange rate between the
      functional currency and the foreign currency at the date of the transaction.

      At the end of the reporting period, the foreign currency monetary items are translated using the closing rate of exchange.

      Derivative financial instruments are initially and subsequently recognised at fair value, with changes in fair value being included in profit or loss other than derivatives
      designated as cash flow hedges.

      The Group designates certain derivatives as cash flow hedges. If these cash flow hedges meet the conditions for hedge accounting, the portion of the gain or loss on the
      hedging instrument that is determined to be an effective hedge is recognised in other comprehensive income and the ineffective portion is recognised in profit or loss. A
      hedge of the foreign currency risk of a firm commitment is designated and accounted for as a cash flow hedge.

      Amounts deferred to the hedging reserves are recognised through profit and loss in the same period in which the hedged item affects profit and loss. Hedge accounting is
      discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, for forecast transactions, any
      cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer
      expected to occur, the net cumulative gain or loss recognised in equity is transferred to profit or loss for the period.

4.    Accounting judgements and estimates

      Management is required to make estimates and assumptions that affect the amounts presented in the financial statements and related disclosures. The use of available
      information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates.

      In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group's accounting policies and
      the key sources of estimation uncertainty were the same as those that applied to the consolidated annual financial statements for the year ended 31 December 2018.


                                                                                     6 months      6 months
                                                                                        ended         ended      Year ended
                                                                                      30 June       30 June     31 December
                                                                                         2019          2018            2018
                                                                                     Reviewed      Reviewed         Audited
                                                                                        R'000         R'000           R'000

5.    Other income
      Bad debts recovered                                                                  51            13              23
      Commissions received                                                                 19            16              35
      Gain on disposal of property, plant and equipment                                   320             -               -
      Gain on foreign exchange                                                          8 728         2 851          10 337
 
       Realised gain on foreign exchange                                                9 515        35 024          55 831
       Unrealised loss on foreign exchange                                               (787)      (32 173)        (45 494)

      Insurance claims received                                                           194           159           2 020
      Sundry income                                                                     4 943         3 590           5 580
                                                                                       14 255         6 629          17 995

6.    Operating profit
      Operating profit from continuing operations is calculated after taking into
      account the following:

      Operating expenditure
      Depreciation of property, plant and equipment                                    82 271        76 017         152 915
      Depreciation of right-of-use assets                                              45 874             -               -
      Amortisation of computer software and brands                                      3 560         2 842           8 017
      Amortisation of customer relationships                                           75 086        70 784         140 841
      Loss on disposal of property, plant and equipment                                     -         1 383           3 190
      Employee benefits                                                               615 220       560 810       1 092 185

       Salaries and wages                                                             610 675       559 351       1 085 963
       Retrenchment and settlement costs                                                4 545         1 459           6 222

      Strategic advisory fees                                                               -            78              43
      Due diligence costs                                                                 264           738           8 326
      Charges relating to/(reversal of) share appreciation
      rights granted                                                                        -       (21 677)         13 203
      Securities transfer tax                                                               -             -              66
      Operating lease charges                                                               -        38 240         140 451

       Premises                                                                             -        30 812         110 364
       Straight-lining of operating leases                                                  -         2 181           3 694
       Motor vehicles & equipment                                                           -         5 247          26 393


                                                                                     6 months      6 months
                                                                                        ended         ended      Year ended
                                                                                      30 June       30 June     31 December
                                                                                         2019          2018            2018
                                                                                        R'000         R'000           R'000

7.    Loss from discontinued operations and operations held for sale
      Loss from discontinued operations/operations held for sale                      (65 807)       (9 760)        (50 906)
      Loss from discontinued operations recognised in the Statement of Profit or
      Loss and Other Comprehensive Income consists of the following:

7.1   Current year loss from operations held for sale - Elvin
      The Group has entered into a sale of business agreement in respect of the
      dairy blend and fruit concentrate beverages. The agreement is subject to
      customary conditions precedent including approval by The Competition
      Commission of South Africa. The transaction is not categorised in terms of
      the JSE Listings Requirements.

      The results of the lines classified as a held for sale included in the
      Condensed Consolidated Statement of Comprehensive Income are set out
      below:
       Revenue                                                                        122 455       113 938         232 698
       Cost of sales                                                                 (112 210)      (93 461)       (199 870)

       Gross profit                                                                    10 245        20 477          32 828
       Other income                                                                        55           423             545
       Operating expenses                                                             (87 909)      (26 371)        (79 894)

       Operating loss                                                                 (77 609)       (5 471)        (46 521)
       Investment income                                                                    -             -              58
       Finance costs                                                                   (1 581)       (1 440)         (3 580)

       Loss before tax                                                                (79 190)       (6 911)        (50 043)
       Income tax                                                                      13 383             -          11 760

       Loss for the period from operations held for sale                              (65 807)       (6 911)        (38 283)

       Loss from discontinued operation attributable to:
       Equity holders of the parent                                                   (65 807)       (6 911)        (38 283)
       Non-controlling interest                                                             -             -               -
                                                                                      (65 807)       (6 911)        (38 283)

7.2   Prior year loss from discontinued operations - Pasta Nova
      During the previous financial year, the Group resolved to discontinue the
      operations of Pasta Nova - a division of Libstar Operations Proprietary
      Limited.
      The Pasta Nova operation was classified as a discontinued operation and
      the divisions results included in the Condensed Consolidated Statement of
      Comprehensive income are set out below:
      Revenue                                                                               -       15 746        26 000
      Cost of sales                                                                         -      (12 318)       (21 028)

      Gross profit                                                                          -        3 428          4 972
      Other income                                                                          -           35             91
      Operating expenses                                                                    -       (6 189)       (19 202)

      Operating loss                                                                        -       (2 726)       (14 139)
      Finance costs                                                                         -         (123)         (409)

      Loss before tax                                                                       -      (2 849)        (14 548)
      Income tax                                                                            -           -           1 925

      Loss for the period from discontinued operation                                       -      (2 849)        (12 623)

      Loss from discontinued operation attributable to:
       Equity holders of the parent                                                         -      (2 849)        (12 623)
       Non-controlling interest                                                             -           -               -
                                                                                            -      (2 849)        (12 623)



                                                                                         6 months       6 months
                                                                                            ended          ended       Year ended
                                                                                          30 June        30 June      31 December
                                                                                             2019           2018             2018
                                                                                            R'000          R'000            R'000

8     Earnings per share

8.1   Basic and diluted earnings per share
      The earnings and weighted average number of ordinary shares used in the
      calculation of basic earnings per share are as follows:
      Earnings used in the calculation of basic earnings per share                         52 232         63 820          222 224

      From continuing operations                                                          118 039         73 580          273 130
      From discontinued operations                                                        (65 807)        (9 760)         (50 906)

      Weighted average number of ordinary shares for the purposes of basic
      earnings per share ('000)                                                           599 255        523 347          566 445

      Basic earnings per share in cents

      From continuing operations                                                             19,7           14,1             48,2
      From discontinued operations                                                          (11,0)          (1,9)            (9,0)

      From continuing and discontinued operations                                             8,7           12,2             39,2

8.2   Normalised earnings per share
      To arrive at normalised EPS, the after-tax earnings from continuing
      operations is adjusted for the after-tax impact of the following:

      Profit for the year from continuing operations                                      118 039         73 580          273 130
      normalised for:                                                                      58 386         69 260          146 775

       Amortisation of customer contracts and brands                                       54 062         50 964          101 406
       Due diligence costs                                                                    264            738            3 319
       Provision for share appreciation rights                                                  -        (15 608)          (9 510)
       Government grants                                                                        -              -              (46)
       IPO costs                                                                                -          7 303            5 007
       Retrenchment costs                                                                   3 273          1 051            5 076
       Securities transfer tax                                                                221              -               66
       Straight lining of operating leases                                                      -          1 570            2 659
       Strategic advisory fees                                                                  -             77               43
       Donation                                                                                 -              -            6 000
       Unrealised forex losses                                                                566         23 165           32 755

      Normalised earnings used in the calculation of basic earnings per share             176 425        142 840          419 905

      Weighted average number of ordinary shares for the purposes of basic
      earnings per share ('000)                                                           599 255        523 347          566 445

      Normalised basic earnings per share in cents                                           29,4           27,3             74,1


8.3   Diluted earnings per share

      There are no convertible shares, share options, warrants or any other instruments in issue that have a potential dilutive
      effect on the earnings per share.
                                                                                          Gross             Net

8.4   Headline earnings per share
      Headline earnings is calculated based on HEPS Circular 4 of 2018 -
      Headline Earnings issued by the South African Institute of Chartered
      Accountants.

      The headline earnings used in the calculation of headline earnings per
      share are as follows:

      Six months ended 30 June 2019
      Basic earnings from continuing operations                                         118 039         118 039
      Adjustments                                                                          (320)           (248)

       Profit on disposal of property, plant and equipment                                 (320)           (248)

      Headline earnings from continuing operations                                      117 719         117 791
      Six months ended 30 June 2018
      Basic earnings from continuing operations                                          73 580          73 580
      Adjustments                                                                         1 383           1 073

       Loss on disposal of property, plant and equipment                                  1 383           1 073

      Headline earnings from continuing operations                                       74 963          74 653

      Year ended 31 December 2018
      Basic earnings from continuing operations                                         273 130         273 130
      Adjustments                                                                         3 190           2 475

       Loss on disposal of property, plant and equipment                                  3 190           2 475

      Headline earnings from continuing operations                                      276 320         275 605



                                                                     6 months          6 months
                                                                        ended             ended     Year ended
                                                                      30 June           30 June    31 December
                                                                         2019              2018           2018
                                                                        R'000             R'000          R'000

8.    Earnings per share continued
8.4   Headline earnings per share continued
      Basic earnings from discontinued operations                     (65 807)          (9 760)        (50 906)
      Adjustments (net of tax)                                         59 412                -          35 304

       Impairment of brands                                            34 412                -          30 240
       Impairment of goodwill                                          25 000                -               -
       Loss on disposal of property, plant and equipment and
       customer contracts                                                   -                -           5 064

      Headline earnings from discontinued operations                   (6 395)          (9 760)        (15 602)

      Headline earnings from continuing and
      discontinued operations                                         111 396           64 893         260 003

      Headline earnings per share in cents

      From continuing operations                                         19,7             14,3            48,7
      From discontinued operations                                       (1,1)            (1,9)           (2,8)

      From continuing and discontinued operations                        18,6             12,4            45,9

8.5   Normalised headline earnings per share

      To arrive at normalised HEPS, the normalised EPS is
      adjusted for the after-tax impact of the below:
                                                                                                           Net
      Six months ended 30 June 2019
      Normalised basic earnings from continuing operations                                             176 425
      Adjustments                                                                                         (248)

       Profit on disposal of property, plant and equipment                                                (248)

      Normalised headline earnings from continuing operations                                          176 177

      Normalised headline earnings per share from continuing
      operations (cents)                                                                                  29,4

      Six months ended 30 June 2018
      Normalised basic earnings from continuing operations                                             142 840
      Adjustments                                                                                        1 073

       Loss on disposal of property, plant and equipment                                                 1 073

      Normalised headline earnings from continuing operations                                          143 913

      Normalised headline earnings per share from continuing
      operations (cents)                                                                                  27,5

      Year ended 31 December 2018
      Normalised basic earnings from continuing operations                                             419 905
      Adjustments                                                                                        2 475

       Loss on disposal of property, plant and equipment                                                 2 475

      Normalised headline earnings from continuing operations                                          422 380

      Normalised headline earnings per share from continuing
      operations (cents)                                                                                  74,6


9.    Property, plant and equipment

      During the six-month period ended 30 June 2019, the Group acquired plant, equipment and computer software in the amount of R162 million (2018: R152 million).

      There has been no major change in the nature of property, plant and equipment, the policy regarding the use thereof, or the encumbrances over the property, plant and
      equipment as disclosed in the audited financial statements for the year ended 31 December 2018.


                                                                                       6 months       6 months
                                                                                          ended          ended      Year ended
                                                                                        30 June        30 June     31 December
                                                                                           2019           2018            2018
                                                                                          R'000          R'000           R'000

10    Leases
      Non-current right-of-use asset                                                    464 430              -               -
      Non-current lease liabilities                                                    (515 904)             -               -
      Current lease liabilities                                                         (38 976)             -               -

      The Group has applied IFRS 16 using the modified retrospective approach,
      under which the cumulative effect of initial application is recognised in
      retained earnings at 01 January 2019. Accordingly, the comparative
      information presented for financial year 2018 has not been changed.

      The impact of the adoption of IFRS 16 (Leases) on the consolidated financial
      statements of the Group is as follows:

      Consolidated Statement of Comprehensive Income
      Reduction of lease rental expense                                                  57 951              -               -
      Depreciation of right-of-use asset                                                (45 874)             -               -
      Finance costs in respect of lease liability                                       (24 601)             -               -

      Reduction in profit before tax                                                    (12 524)             -               -

      Consolidated Statement of Financial Position
      Right-of-use asset
      Right-of-use asset recognised on 01 January 2019                                  510 304              -               -
      Depreciation for the period                                                       (45 874)             -               -

      Increase in assets                                                                464 430              -               -

      Equity
      Retrospective adjustment to opening retained earnings at 01 January 2019          (50 560)             -               -
      Movement for the period                                                            (9 017)             -               -

      Decrease in retained earnings                                                     (59 577)             -               -

      Deferred tax asset
      Retrospective adjustment to deferred tax asset at 01 January 2019                  19 662              -               -
      Movement for the period                                                             3 507              -               -

      Increase in deferred tax asset                                                     23 169              -               -

      Finance Lease Liability
      Lease liability recognised as at 01 January 2019                                  588 230              -               -
      Add: finance costs                                                                 24 601              -               -
      Less: lease payments                                                              (57 951)             -               -

      Increase in financial liabilities                                                 554 880              -               -

11.   Financial instruments

      At the reporting dates, the financial assets and liabilities of the Group that
      are classified at fair value through profit and loss comprise forward
      exchange contracts. These are classified at a Level 2 in terms of the fair
      value hierarchy.


                                                                                       6 months      6 months
                                                                                          ended         ended      Year ended
                                                                                        30 June       30 June     31 December
                                                                                           2019          2018            2018
                                                                                          R'000         R'000           R'000

12.   Cash generated from continuing operations
      Profit before taxation from continuing operations                                 167 629        96 935         399 826
      Adjustments for:                                                                  239 141       301 283         568 391

       Depreciation, amortisation and impairments                                       160 917       149 643         301 773
       Depreciation of right-of-use assets                                               45 874             -               -
       Loss/(gain) on disposal of property, plant and equipment                            (320)        1 383           3 190
       Lease payments                                                                   (57 951)            -               -
       Investment income                                                                (25 219)      (21 027)        (47 617)
       Finance costs                                                                    128 158       153 052         269 310
       Fair value adjustment on forward exchange contracts                              (11 398)       36 794          47 257
       Foreign exchange losses                                                           12 156             -               -
       Movements in employee benefits                                                      (231)         (175)            547
       Movements in operating lease assets and accruals                                       -         3 290           7 139
       Movements in share appreciation rights                                           (12 845)      (21 677)        (13 208)

      Changes in working capital:                                                       (96 601)      (86 385)        (92 030)

       Inventories                                                                      (90 518)      (54 517)         15 777
       Trade and other receivables                                                       70 213       126 781          (9 930)
       Biological assets                                                                   (973)         (828)           (500)
       Trade and other payables                                                         (75 323)     (157 821)        (97 377)

                                                                                        310 169       311 833         876 187

13.   Subsequent events

      The following events occurred during the period subsequent to 30 June 2019 but prior to the date of issue of this announcement:
      - The Board appointed Mr Sandeep Khanna as chairman of the Remuneration Committee with effect from 03 September 2019
      - The Board appointed Mr JP Landman as a member of the Remuneration Committee with effect from 03 September 2019.

Date of publication
04 September 2019

Corporate information

Address

1st Floor, 62 Hume Road, Dunkeld, Johannesburg, 2196, South Africa
(PO Box 630, Northlands, 2116)

Website

http://www.libstar.co.za

Directors

Wendy Luhabe (Chairman)
JP Landman (Lead-independent)
Sandeep Khanna
Sibongile Masinga
Andries van Rensburg (CEO)
Robin Smith (CFO)

Company Secretary

Solach Pather
1st Floor, 62 Hume Road, Dunkeld, Johannesburg, 2196, South Africa
(PO Box 630, Northlands, 2116)

Sponsor

The Standard Bank of South Africa Limited
30 Baker Street, Rosebank, Johannesburg, 2196, South Africa
(PO Box 61344, Marshalltown, 2107)

Auditors

Moore Stephens Cape Town Inc
Block 2, Northgate Park, Corner Section Street and Koeberg Road, Paarden Eiland, Cape Town, 7405, South Africa
(PO Box 1955 Cape Town, 8000)

Transfer secretaries

Computershare Investor Services Proprietary Limited
Rosebank Towers, 15 Biermann Avenue, Rosebank, Johannesburg, 2196, South Africa
(PO Box 61051, Marshalltown, Johannesburg, 2107)

Date: 04/09/2019 07:05:00
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