Premier Group reports strong profit growth, allocates US$60.91 million for strategic acquisitions

SOUTH AFRICA – Premier Group, a prominent South African food producer has announced a 32.4% increase in its interim profit for the six months ending September 30.

The company has attributed this growth to effective cost-saving measures and improved operational efficiency in a challenging market environment. 

The group, which operates well-known brands like Mister Sweet and Manhattan confectionery, reported a rise in operating profit of 17.3%, reaching 945 million rand (US$51.7M), aided by the suspension of load-shedding in South Africa. This, in turn, enhanced operations within the company’s key product categories.

Despite a turbulent economic backdrop, marked by high interest rates and volatile commodity prices, Premier saw a modest 3.7% increase in revenue, which reached 9.7 billion rand (US$531.29 million). 

The company’s commitment to investing in its manufacturing capabilities also played a role in driving efficiency, including the construction of high-volume bakeries and the introduction of modern equipment that cut production costs while improving product quality.

Diversification focus and strategic acquisitions

In addition to its robust financial performance, Premier revealed that it has set aside 1.1 billion rand (US$60.25 million) for potential acquisitions as part of its strategy for further expansion. 

The company has already made strategic moves, such as acquiring a 30% stake in rice importer Goldkeys International in June. 

This investment aims to tap into the rice market, complementing the company’s existing portfolio. 

Premier’s CEO, Kobus Gertenbach, explained that while the company is already a notable player in many of its categories, it must focus on diversification, as further acquisitions in its established markets could lead to competitive challenges.

Premier’s acquisition efforts extend beyond its domestic market. Since 2011, the group has invested over R6 billion to enhance its facilities, expand its product offerings, and diversify its operations. 

This includes a broad portfolio that now spans sugar confectionery (Super C, Mister Sweet, and Manhattan), home and personal care products (Lil-Lets, Dove Cottons, and Vulco), and additional bakery operations.

Regional growth and expanding footprint

In terms of regional expansion, Premier has grown its presence across southern Africa. The group’s operations now include 13 bakeries, 7 wheat mills, 3 maize mills, and various manufacturing plants spread across South Africa, Eswatini, Mozambique, and Lesotho. 

In Mozambique, Premier operates in milling, biscuits, animal feeds, and pasta, while its operations in Eswatini have extended to bakery, milling, and beverage production. 

Additionally, Premier’s portfolio includes a sales office for its Lil-Lets brand in the UK, which services markets in the Middle East, Ireland, the US, and the EU.