Premier Group's share price surges 7.5% after solid interim earnings and improving prospects

THE share price of Premier Group surged 7.5% on Tuesday after it reported strong half-year earnings and outlined the path ahead with the acquisition of food maker RFG Holdings.

- EDWARD WEST

PREMIER Group's Blue Ribbon bread production line. The group recently announced plans to acquire RFG Holdings which will make Premier the second biggest food producer on the JSE. SUPPLIED

The fast-moving consumer goods company behind brands such as Blue Ribbon, Snowflake, and Iwisa reported revenue up 6.4% to R10.3 billion in the six months to September 30. The share traded at R171.71 cents on the JSE on Tuesday morning, bringing the price growth to an equally robust 51.9% this year.

A once-off cash dividend of 159 cents a share was declared the final dividend will be adjusted downwards to maintain the group 30% of diluted HEPS payout ratio. Headline earnings a share increased 27.9% to 560 cents. Earnings before interest, tax, depreciation, and amortisation (EBITDA) was up 13.6% to R1.3bn.

"This is a transformational transaction for Premier. RFG's complementary portfolio and strong customer relationships align perfectly with our strategy to build a diversified, best-in-class food and consumer-goods business. Together we'll have greater scale, stronger brand presence, and an exciting platform for sustainable growth," CEO Kobus Gertenbach said.