Libstar hikes dividend as earnings rebound

Libstar Holdings Limited has reported a materially improved financial performance for the year ended 31 December 2025, buoyed by robust momentum in its core categories and the successful execution of its “Simplification, Growth and Sustainability” strategy.

The consumer goods giant signaled its confidence in future cash generation by declaring a final gross dividend of 28 cents per share, a sharp 86.7% increase over the previous year.

Libstar share price

Core performance and margin recovery

Despite subdued retail conditions, Libstar achieved 8.2% revenue growth, reaching R12.3 billion for continuing operations. This growth was underpinned by a 3.2% increase in volumes and a 5.0% improvement in price mix.

The group successfully expanded its gross profit margin to 22.0%, driven by disciplined raw material procurement and improved capacity utilisation.

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The perishable products category was a primary engine of growth, with revenue rising 9.2% and normalised Ebitda climbing 12.5%. The ambient products segment also proved resilient, delivering a 7.4% revenue increase despite sustained volume pressure in certain sub-categories.

Strategic simplification: The Denny Mushrooms exit

A cornerstone of Libstar’s simplification strategy was the disposal of its Denny Mushrooms business unit. The deal, which became effective on 1 December 2025 for a consideration of R30 million, allowed the group to exit a non-core, loss-making operation.

While the exit resulted in a R61.5 million loss on sale after tax, it significantly improved the group’s overall earnings quality by removing the drag from discontinued operations.

Read: Libstar’s mushroom disposal triggers pre-tax loss of up to R55m

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Strengthened balance sheet and shareholder returns

Libstar’s financial position has strengthened considerably, with its gearing ratio improving to 0.9x normalised Ebitda, down from 1.5x in 2024. This balance sheet flexibility has prompted the board to adjust its dividend policy and intend to implement a general share repurchase programme of up to 5% of issued shares.

Looking ahead to 2026, CEO Charl de Villiers noted that capital will remain focused on efficiency-enhancing projects, including the integration of Dickon Hall Foods into Montagu Foods.

While this project may cause temporary downtime in the second quarter, management remains confident that disciplined capital allocation positions the group for sustainable medium-term returns.

Read:
Potential takeover bid sees Libstar shares surge
Libstar retains dividend despite slip in profit

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