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LIBSTAR HOLDINGS LIMITED - Results for the Year Ended 31 December 2018 and Cash Dividend Declaration

Release Date: 13/03/2019 08:00
Code(s): LBR     PDF:  
 
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Results for the Year Ended 31 December 2018 and Cash Dividend Declaration

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")

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2018 AND CASH DIVIDEND DECLARATION

SALIENT FEATURES:

- Listed on the JSE Limited on 9 May 2018, raising R3 billion primary and secondary capital;
- Revenue increased 12.5% to R9 892 million from R8 796 million, with organic revenue increasing by 5.1%;
- Normalised Earnings before interest and taxation (EBIT) increased by 1.4% to R819 million from R807 million;
- Normalised Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 4.6% to R984 million. This was in line with Libstar's historic seasonal trend of an
  approximate 40:60 ratio between H1 and H2. Libstar reminds investors that certain once-off and non-operating items should be taken into account when calculating
  normalised earnings for the group. These impacts are outlined below:
  - Impairment of goodwill and intangible assets of R42 million (F2017: R50 million), as discussed in the segmental review below;
  - Unrealised foreign exchange translation losses of R46 million (F2017: gain of R40 million);
  - Amortisation of customer relationships of R141 million (F2017: R132 million); and
  - A reversal of the Share Appreciation Rights provision of R13 million (F2017: expense of R27 million).
- Profit after taxation increased by 1.1% to R236 million;
- As indicated to the market previously, Libstar has adopted new financial performance measures, namely normalised earnings per share (EPS) and headline earnings per
  share (HEPS), which will adjust basic and diluted earnings from continuing operations for the after-tax impact of the adjustments included in the group's existing
  accounting policy relating to Normalised EBITDA.
  - Normalised basic and diluted EPS decreased 11.8% from 76 cents to 67 cents; and
  - Normalised basic and diluted HEPS decreased 16.1% from 87 cents to 73 cents.
- R505.0 million cash flow generated from operating activities;
- Net indebtedness reduced from R1.9 billion to R1.2 billion; and
- Maiden cash dividend declaration of 22 cents per share.

INTRODUCTION

The retail and consumer environment were the toughest Libstar has experienced since its inception 14 years ago. The retail sector is experiencing structural pressures brought
about by economic uncertainty and lower levels of consumer spending. Against this backdrop, the group performed satisfactorily, with the positive volume growth experienced
during the first half of the year persisting and accelerating slightly into the second half of the year. Organic revenue was bolstered mainly by the successful launch of
Lancewood-branded dairy products.

The group continues to focus on the supply of innovative and value-added products, mainly to targeted markets, which have proven to be more resilient, as well as focusing on
low-cost manufacturing and procurement efficiencies. These are key to maintaining a competitive advantage in a challenging market.

However, as outlined in the segmental review, normalised EPS and HEPS were affected by the impairment in the Niche Beverages category.

OVERVIEW OF THE GROUP

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

The group operates a number of business units. Business units are supported from the central office with functional business activities, including human resources, finance,
sales, marketing and supply chain. Growth is driven from the central office both organically and through expansion projects, as well as acquisitions. Libstar's head office drives
the broad group strategy frameworks, guidelines and governance policies and procedures, and generally provides the platform benefits that assist new small to medium-sized
business units to grow exponentially. Key to this growth is the strategic allocation of capital by Libstar to fund investments in working capital and infrastructure development to
build manufacturing capability and operational efficiencies.

STRATEGY

Libstar focused on the following initiatives in F2018, all geared towards innovation to counter the impact of the tough retail and consumer environments:

- Category and channel development

  The detailed analysis of product categories, in-depth relationships with customers and knowledge of the market continued to highlight growth opportunities which, in turn,
  drive new product innovation to grow the group's market share and the overall size of selective markets;

- Investment

  The group invested R349 million in new technologies, efficiency improvements and capacity expansion in key categories to remain competitive;

- Systems

  Business unit information technology systems and processes are being standardised across the group. Significant upgrades to the group's information technology systems
  and processes were implemented in F2018;

- Exploiting trends

  The growth of new trends in the market provides diverse opportunities to innovate products. The current, fast-growing trends in Libstar's markets include:

  - On-the-go and convenience eating. The group is meeting the consumer requirement to dine out of home through a range of products to quick service restaurants, such as
    McDonald's, KFC and Nando's and to family restaurant chains, such as Panarotti's, Mugg & Bean and Spur Steak Ranches;
  - Health and wellness preferences. The group has introduced a range of healthy nut snacks in the Snacks and Confectionery category, as well as a range of yoghurts under
    the Lancewood brand within the Perishables category;
  - Private Label and Dealer Own Brands (DOB) products. The fast-growing, value-for-money private label and DOB markets constitute c.44% of group revenue.

This strategy, with a strong emphasis on innovation, allowed the group to achieve market share growth in a number of key businesses. In F2018 the group launched 387 new
stock-keeping units (SKUs) and renovated 336 SKUs.

FINANCIAL PERFORMANCE

In the challenging operating environment of F2018, Libstar was able to deliver total revenue growth of 12.5% on the prior year. Organic revenue increased by 5.1%, comprising
organic volume growth of 3.8% and organic price growth of 1.3%. The successful launch of new dairy products, such as the new branded, taste-differentiated yoghurt
products in Q3 F2018 especially bolstered H2 organic revenue growth. The acquisition of Sonnendal Dairies in F2017 provided the additional capacity required for Lancewood
to launch this new product range.

Although gross profit margins recovered strongly during the second half of the year, mainly due to lower input costs in the dairy and dry condiment product categories, they
were 0.6 percentage points lower than the prior year at 22.2% (F2017: 22.8%). This was driven by:

- the additional revenue from Sonnendal Dairies (acquired at the end of F2017) at lower full-year gross profit margins, despite H2 F2018 margins improving in line with
  expectation;
- prolonged promotional activity of value-added chicken products in retail and the under-utilisation of the newly-built Finlar chicken plant due to a delay in the launch of 
  fully-cooked chicken products; and
- lower realised foreign exchange translation gains of R56 million in F2018 compared to gains of R89 million in F2017.

Operating expenses were well controlled at 16.6% of net revenue (F2017: 17.7%).

The impact of unrealised foreign exchange translation losses of R46 million on profit before taxation was significant, relative to the gain of R40 million for the year to
31 December 2017. This resulted in net realised and unrealised foreign exchange translation gains in the current period of R10 million relative to R129 million during F2017.

Finance costs decreased from the comparative period, despite additional finance charges related to working capital facilities. This was mainly due to the repayment of facilities
from capital raised in the initial public offering and the renegotiation of group facilities. This reduced the group average weighted cost of debt to 8.97% from November 2018
(F2017: 9.77%).

The group's tax rate was 32.6% (F2017: 36.5%), mainly impacted by the impairment in F2017 and the reversal of deferred tax assets on assessed losses related to historic
subsidiaries of the group in F2018.

In terms of cashflow, the group generated R505.0 million from operating activities (F2017: R572.6 million). Net working capital at the close of the period remained at 45 days
(F2017: 45 days). This resulted in a net investment in working capital of R92 million (F2017: net reduction of R71 million). Net indebtedness following the initial public offering
reduced to R1.2 billion from R1.9 billion at 31 December 2017. R1.1 billion of the R1.5 billion proceeds from the initial public offering was utilised to repay term loans. During
the year under review, the group invested R346 million in capital expenditure, representing 3.5% of net revenue. The group also made a capital distribution of R800 million to its
pre-IPO shareholders on 28 February 2018.

SEGMENTAL RESULTS

                                                                                                  Revenue:                                  Normalised EBITDA:
                                                                                             Audited year ended                             Audited year ended
                                                                                               31 December                                     31 December

R'000                                                                                2018            2017         % change         2018             2017         % change

Perishables                                                                     4 569 593       3 729 670             22,5      454 652          446 280              1,9
Ambient Groceries                                                               2 471 896       2 614 824             (5,5)     338 425          350 263             (3,4)
Snacks and Confectionery                                                          477 391         428 505             11,4       73 051           71 551              2,1
Baking and
Baking Aids                                                                       627 839         515 406             21,8       92 635           77 124             20,1
Niche Beverages                                                                   650 353         428 278             51,9       54 776            3 125            17,5x
Household and Personal Care (HPC)                                                 846 313         826 887              2,3       36 358           43 730            (16,9)
Specialised Food Packaging                                                        248 909         252 879             (1,6)      13 914           17 220            (19,2)
Corporate                                                                                                                       (80 147)         (68 928)           (16,3)

Total                                                                           9 892 294       8 796 449             12,5      983 665          940 365              4,6

Perishables - 46% of group revenue, 43% of group normalised EBITDA

Perishables revenue increased by 22.5% to R4 570 million (F2017: R3 730 million), driven by a very strong performance in the dairy sub-category which was bolstered by new
product launches and the acquisition of Sonnendal Dairies. The acquisition has grown the group's footprint in the Perishables category and complemented the existing dairy
offering.

Lancewood and Finlar Fine Foods (Finlar) contribute 73% of Perishables' revenue and 88% of the category's normalised EBITDA.

Lancewood had an outstanding year. As committed, Sonnendal Dairies' margins are steadily improving due to product diversification. As indicated previously, Sonnendal Dairies
and Lancewood now operate as a single operation and will no longer be separately reported from F2019. Libstar continues to drive growth through innovation, including the
introduction of higher-margin, new products, such as Lancewood's launch of new branded, taste-differentiated yoghurt products. Yoghurt sales are increasing, and market
share growth was substantially ahead of initial expectations. The full benefits of the launch will flow through in the first half of F2019.

Higher value sales of meat products contributed to Finlar's revenue growth, including the development of a Cajun chicken burger patty for McDonald's, which was also introduced to 
several regions elsewhere in the world. However, gross profit margins were adversely impacted by prolonged promotional activity of value-added chicken products in retail and the 
under-utilisation of the newly-built chicken plant due to a delay in the launch of fully-cooked chicken products.

H2 F2018 showed an improvement in fresh mushroom production volumes, yields and sales mix in Denny. F2019 initiatives include a new sales channel strategy, a focus on
value-added and differentiated products and the continued implementation of international industry best practice.

Cheese and butter revenues were up year-on-year despite a very competitive market. Successful margin control initiatives and reduced input costs have bolstered gross profit
margins.

The above performance resulted in normalised EBITDA for Perishables increasing by 1.9% to R455 million (F2017: R446 million). Normalised EBIT decreased by 4.0% to
R395 million (F2017: R412 million).

Ambient Groceries - 25% of group revenue, 32% of group normalised EBITDA

Cape Herb and Spice, Rialto Foods and Dickon Hall contribute 75% of revenue and 86% of normalised EBITDA in this category.

Ambient Groceries revenue decreased 5.5% to R2 472 million (F2017: R2 615 million), impacted by weak international demand for dry condiments, as well as integration
delays and industrial action experienced within the wet condiment sub-category during the first half of the year. The industrial action at Dickon Hall Foods in H1 was fully
resolved and international demand for herbs and spices improved during H2. However, integration challenges, involving the combination of a number of non-fresh Denny
production lines into the Montagu facility and the Ambient Groceries category, continued through to year-end. This business excludes fresh mushrooms and represents only 1%
of group revenue. A revised sales demand planning programme will address these issues during F2019.

The Ambient Groceries gross profit margin exceeded that of the prior year, mainly due to lower input costs of dry condiments. Normalised EBITDA decreased by 3.4%
to R338 million (F2017: R350 million) and normalised EBIT by 6.5% to R292 million (F2017: R312 million) respectively.

Snacks and Confectionery - 5% of group revenue, 7% of group normalised EBITDA

Ambassador Foods contributes 100% of revenue and normalised EBITDA in this category.
Snacks and Confectionery revenue increased 11.4% to R477 million (F2017: R429 million), driven mainly by the introduction of new products, as well as significant bulk
volume sales of peanuts and raisins. Ambassador Foods' production of healthy nut snacks is a good example of how Libstar is exploiting the trend towards health and wellness
preferences amongst consumers.

Gross profit margins were held constant in the face of slower than expected Q3 2018 sales in some grocery products and significant promotional activity in granolas.
Normalised EBITDA therefore increased by 2.1% to R73 million (F2017: R72 million) and normalised EBIT by 2.0% to R63 million (F2017: R62 million).

Baking and Baking Aids - 6% of group revenue, 9% of group normalised EBITDA

Amaro Foods and Retailer Brands contribute 92% of revenue and 93% of normalised EBITDA in this category. Baking and Baking Aids experienced strong growth in revenue
and EBITDA in F2018.

Revenue increased 21.8% to R628 million (F2017: R515 million). Revenue growth was driven by the incorporation of NCP Yeast and Cook 'n Bake into the Retailer Brands
business unit from April 2018, as well as growth in the baking aids sub-category. Rolls and speciality breads performed strongly. This was driven by new product development
within the retail channel, whilst some recovery was experienced in sales to the quick-service retail industry. Amaro Foods' production of gluten-free baked goods is another
example of the group exploiting the trend towards health and wellness preferences amongst consumers. Amaro's flour tortilla wraps are also now supplied on a national scale
to, amongst others, KFC, to capitalise on the consumer requirement for greater convenience.

Normalised EBITDA and normalised EBIT increased by 20.1% and 23.9% to R93 million (F2017: R77 million) and R74 million (F2017: R60 million) respectively.

The launch of new private label baking aids in the retail channel and the commissioning of a par-bake speciality bread facility during Q1 2019, with production to start from
April 2019, are expected to support the category's growth trajectory in F2019.

Niche Beverages - 7% of group revenue, 5% of group normalised EBITDA

Elvin and Khoisan contribute 88% of revenue and 94% of normalised EBITDA in this category.

Niche Beverages revenue increased 51.9% to R650 million (F2017: R428 million), driven by a strong full-year performance from the newly-acquired Khoisan Gourmet range.
Whilst dairy blends and related products remain under pricing pressure, this sub-category showed an improved full-year performance.

Normalised EBITDA and normalised EBIT increased more than 17-fold to R55 million (F2017: R3 million) and R46 million (F2017: -R3 million) respectively.
The dairy-blend and fruit concentrate beverage operations of the group remained under significant competitive pressure during F2018, which is likely to persist for some time
to come. To address this, a restructuring exercise was undertaken during H2 F2018, resulting in the decision to relocate the marketing and sales functions of non-beverage
products into certain of the group's wet condiments facilities. This will yield future cost rationalisation benefits for the group. An impairment loss in the amount of R42 million
was recorded in respect of the residual dairy-blend and fruit concentrate beverage operations, as the group deliberates its strategic options regarding this component of the
business.

Household and Personal Care - 9% of group revenue, 3% of group normalised EBITDA.

Contactim and Chet Chemicals contribute 91% of category revenue and 82% of normalised EBITDA in this category.

Household and Personal Care revenue increased 2.3% to R846 million (F2017: R827 million). Normalised EBITDA decreased by 16.9% to R36 million (F2017: R44 million) and
normalised EBIT by 3.4% to R21 million (F2017: R22 million). This was a disappointing performance due to competitive pressures and an adverse change in product mix
towards lower-margin products.

Specialised Food Packaging - 2% of group revenue, 1% of group normalised EBITDA.

Multicup contributes 100% of revenue and normalised EBITDA in this category.

The margin pressure from unfavourable exchange rates had a negative effect on performance in F2018. Specialised Food Packaging revenue decreased 1.6% to R249 million
(F2017: R253 million) and normalised EBIT decreased 20.9% to R13 million (F2017: R16 million). Normalised EBITDA decreased 19.2% to R14 million (F2017: R17 million).

As expected, the launch of new eco-friendly products during H2 F2018 resulted in an improved second half of the year. This is expected to bolster F2019 performance.

GROUP MATTERS

During H2 F2018 Libstar made significant progress in establishing group-wide visibility of open foreign exchange contracts (FECs) and the formalisation of hedging policies
across key business units. To continue lowering the cost of manufacturing, the group invested in a logistics tracking IT system, which is being piloted at Rialto Foods, and is set
to improve import and export product costing abilities during F2019. These measures are set to culminate in the adoption of hedge accounting as an accounting policy during
H1 F2019. This will ultimately assist to better match the volatility in FEC re-measurements to the transactions which they hedge. Until such time as hedge accounting is fully
implemented for an entire year of trading, and all FECs entered into prior to the adoption of the hedge accounting policy have matured, the group may remain subject to more
significant fluctuations in profitability caused by unrealised foreign exchange translation re-measurements.

In relation to the broad-based black economic empowerment (B-BBEE) transaction set out in the Libstar pre-listing statement of 24 April 2018, the group did not incur any
costs in terms of IFRS 2 share-based payments during F2018.

OUTLOOK

The economy is expected to remain sluggish for the foreseeable future, with a particularly difficult first half expected.

These extremely difficult economic conditions are expected to continue impacting results.

However, the group has a very clear growth strategy in the anticipated operating environment, focusing management's efforts on organic, capacity and acquisitive growth.

Organic growth

In the coming year, the group's primary focus will remain on expanding its existing businesses, improving efficiencies, and leveraging off the existing base to expand its
product offering.

Going forward, food inflation is likely to range between 0% to 2%, with growth therefore to be more volume-related.

In a difficult market environment, the group will continue to focus on its strategy of supplying innovative products and will ensure that it remains a low-cost manufacturer of
quality, value-added products. The group aims, with product innovation, to grow its market share and the overall size of the market in terms of new products and new
utilisation of products.

The management team will concentrate on the development of key channels and markets, supported by investment in group manufacturing capabilities and systems.
It will also focus on new technologies and efficiencies to maintain and improve margins.

Libstar is set to increase its penetration of independent retailers, wholesalers and exports, where the group has scope to grow.

Capacity growth

Libstar will increase the production capabilities and capacities of its business units by strategically investing further capital in plant and equipment and on specific earnings-
enhancing capital projects. This increases output and allows it to produce products for customers in a more efficient and cost-effective manner. The group targets total capital
expenditure as a percentage of group revenue to range between 2.5% to 3%, with the broad guideline of 35-40% on replacement capital expenditure and 60-65% on
expansion capital expenditure.

In the coming year, the benefits of new manufacturing facilities and added capacity is expected to positively impact F2019 trading results.

The group has also continued to invest in technology to improve operational efficiencies and drive margin-enhancement through capacity expansion. As committed, Libstar has
delivered on various growth opportunities through the completion of several earnings-enhancing projects. These include:

- Commissioning of a new plant during H2 which adds in-house granola toasting capabilities. Similar in-house manufacturing initiatives are underway within the Perishables
  and Specialised Food Packaging categories;
- Investing in a new hard-cheese manufacturing facility which adds in-house manufacturing capabilities in the Perishables category;
- Commissioning of the par-bake frozen speciality bread facility in February 2019, with commercial production to commence in April 2019;
- Commissioning of an outsourced manufacturing plant to manufacture cheese snacks for a third party, which has shifted from the initial Q2 2019 estimate to Q4 2019 due
  to a longer than expected project planning phase.

F2019 initiatives include:
- A new tea plant for the local and export market;
- A new Pringles plant to manufacture this snack for a third party;
- The expansion of its prepared meal capacity to further tap into the growing convenience market; and
- New soft cheese value-adding and packing facility.

Acquisitive growth

The group's strategy is to acquire businesses that can add scale, provide additional capacity, new capabilities or new entry-points to high-growth categories.

However, Libstar is not acquisition-dependent. The group did not conclude any acquisitions in F2018, but focused on the integration and expansion of the three acquisitions 
made late in F2017, namely Sonnendal Dairies, Millennium Foods and Khoisan Tea.

DECLARATION OF CASH DIVIDEND

The board of Libstar has approved and declared a final cash dividend of 22 cents per ordinary share (gross) in respect of the year ended 31 December 2018.

In accordance with paragraphs 11.17 (a) (i) to (x) and 11.17 (c) of the JSE Listings Requirements the following additional information is disclosed:

- The dividend has been declared from income reserves;
- The local Dividends Tax rate is 20% (twenty percent);
- The gross local dividend amount is 22 cents per ordinary share for shareholders exempt from the Dividends Tax;
- The net local dividend amount is 17.6 cents per ordinary share for shareholders liable to pay the Dividends Tax
- Libstar has 681 921 408 ordinary shares in issue.
- Libstar's income tax reference number is 9526395174

Shareholders are advised of the following dates in respect of the final dividend:
- Last day to trade cum the final dividend                                             Tuesday, 2 April 2019
- Shares commence trading ex the final dividend                                        Wednesday, 3 April 2019
- Record date to determine those shareholders entitled to the final dividend           Friday, 5 April 2019
- Payment in respect of the final dividend                                             Monday, 8 April 2019

Share certificates may not be dematerialised or re-materialised between Wednesday, 3 April 2019 and Friday, 5 April 2019, both days inclusive.

CHANGES TO THE BOARD AND COMMITTEE COMPOSITIONS

With effect from 9 May 2018:

- Wendy Luhabe was appointed as Chairperson of the board and the Nominations Committee;
- Phumzile Langeni was appointed as Chairperson of the Audit and Risk Committee and the Social and Ethics Committee;
- JP Landman was appointed as Lead independent Director and Chairperson of the Investment and Strategy Committee; and
- Wahid Hamid was appointed as Chairperson of the Remuneration Committee.

With effect from 14 December 2018:

- Sibongile Masinga was appointed as an independent non-executive director. She replaced Phumzile Langeni as Chairperson of the Audit and Risk Committee and Social and
  Ethics Committee following Ms. Langeni's resignation as independent non-executive director with effect from 31 December 2018.

By order of the board
W.Y.N. Luhabe                 A.V. van Rensburg                 R.W. Smith
Chairperson                   Chief Executive Officer           Financial and Commercial Director

Johannesburg
13 March 2019

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.


AUDITED CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 31 December 2018

                                                                                 2018           2017
                                                                              Audited        Audited
                                                                  Notes         R'000          R'000
CONTINUING OPERATIONS
Revenue                                                                     9 892 294      8 796 450
Cost of sales                                                              (7 693 591)    (6 788 632)

Gross profit                                                                2 198 703      2 007 818
Other income                                                          5        18 538        146 653
Operating expenses                                                         (1 642 244)    (1 558 640)

Operating profit                                                      6       574 997        595 831
Investment income                                                              47 676         25 754
Finance costs                                                                (272 890)      (254 431)

Profit before tax                                                             349 783        367 154
Income tax expense                                                           (114 147)      (134 174)

Profit for the year from continuing operations                                235 636        232 980

DISCONTINUED OPERATIONS
Loss for the year from discontinued operations                                (12 623)       (43 283)

Profit for the year                                                           223 013        189 697

Other comprehensive income for the year, net of tax                              (417)          (459)
Items that will never be classified to profit or loss

Defined benefit plan actuarial losses                                            (417)          (459)

Total comprehensive profit for the year                                       222 596        189 238

Profit attributable to:
Equity holders of the parent                                                  222 224        188 354
Non-controlling interest                                                          789          1 343
                                                                              223 013        189 697
Total comprehensive income attributable to:
Equity holders of the parent                                                  221 807        187 895
Non-controlling interest                                                          789          1 343

                                                                              222 596        189 238

Basic and diluted earnings per share (cents)

From continuing operations                                            7            41             49


From continuing and discontinued operations                           7            39             40

Headline earnings per share (cents)

From continuing operations                                            8            47             60

From continuing and discontinued operations                           8            46             57


AUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
                                                                                             2018          2017
                                                                                          Audited       Audited
                                                                                Notes       R'000         R'000
ASSETS
Non-current assets                                                                      6 009 716     6 033 319

Property, plant and equipment                                                       9   1 205 921     1 041 225
Goodwill                                                                                2 521 058     2 521 058
Intangible assets                                                                       2 269 199     2 449 507
Other financial assets                                                                      8 018         9 600
Operating lease asset                                                                       5 418         5 439
Deferred tax assets                                                                           102         6 490

Current assets                                                                          3 784 159     3 459 378

Inventories                                                                             1 121 330     1 137 107
Trade and other receivables                                                             1 628 038     1 618 108
Biological assets                                                                          26 662        26 162
Other financial assets                                                                     17 921       115 647
Current tax receivable                                                                      2 796        11 646
Cash and bank balances                                                                    987 412       550 708

Total assets                                                                            9 793 875     9 492 697

EQUITY AND LIABILITIES
Capital and reserves attributable to equity holders of the parent                       5 410 079     4 559 272

Share capital                                                                           4 818 884     4 187 177
Defined benefit plan reserve                                                               (1 757)       (1 340)
Retained earnings                                                                         668 120       445 895
Premium on acquisition of non-controlling interests                                       (75 168)      (63 624)
Put options exercisable by non-controlling interests and executive management                   -        (8 836)

Non-controlling interests                                                                   8 661         7 696

Total equity                                                                            5 418 740     4 566 968
Non-current liabilities                                                                 2 734 401     2 878 889

Other financial liabilities                                                             1 921 591     2 014 548
Deferred tax liabilities                                                                  769 960       815 948
Employee benefits                                                                           8 919         8 372
Share appreciation rights                                                                  20 811        34 019
Operating lease liability                                                                  13 120         6 002

Current liabilities                                                                     1 640 734     2 046 840

Trade and other payables                                                                1 401 337     1 498 818
Other financial liabilities                                                                77 086       348 146
Current tax payable                                                                         4 239           495
Bank overdraft                                                                            158 072       199 381

Total liabilities                                                                       4 375 135     4 925 729

Total equity and liabilities                                                            9 793 875     9 492 697


AUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018

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

Balance at 1 January 2017                                                                              3 886 410               (881)           (18 390)           264 052            (55 129)             9 523            4 085 585
Total comprehensive income
for the year                                                                                                   -               (459)                 -            188 354                  -              1 343              189 238

Profit or loss for the year                                                                                    -                  -                  -            188 354                  -              1 343              189 697
Other comprehensive income
for the year                                                                                                   -               (459)                 -                  -                  -                  -                 (459)

Transactions with owners
of the Company
Contributions and distributions                                                                          300 767                  -                  -            (33 816)                 -                  -              266 951

Share buy back                                                                                           (25 530)                 -                  -            (33 816)                 -                  -              (59 346)
Issue of shares                                                                                          326 297                  -                                     -                  -                  -              326 297

Changes in ownership interests                                                                                 -                  -            (45 234)                 -                  -             (3 170)             (48 404)

Purchase of non-controlling interest in subsidiary                                                             -                  -            (45 234)                 -                  -             (3 170)             (48 404)

Movement in put options                                                                                        -                  -                  -             27 306             46 293                  -               73 599

Put options exercised                                                                                          -                  -                  -                  -             97 458                  -               97 458
Fair value adjustment taken through equity                                                                     -                  -                  -                  -            (18 049)                 -              (18 049)
Transfer from retained earnings on exercise of put options by executive management                             -                  -                  -             27 306            (33 116)                 -               (5 810)

Balance at 1 January 2018                                                                              4 187 177             (1 340)           (63 624)           445 896             (8 836)             7 696            4 566 969

Total comprehensive income
for the year                                                                                                   -               (417)                 -            222 224                  -                789              222 596

Profit or loss for the year                                                                                    -                  -                  -            222 224                  -                789              223 013
Other comprehensive income
for the year                                                                                                   -               (417)                 -                  -                  -                  -                 (417)

Transactions with owners
of the Company

Contributions and distributions                                                                          631 707                  -                  -                  -                  -                  -              631 707

Capital distribution                                                                                    (800 000)                 -                  -                  -                  -                  -             (800 000)
Issue of shares                                                                                        1 500 730                  -                  -                  -                  -                  -            1 500 730
Held as treasury shares                                                                                     (730)                 -                  -                  -                  -                  -                 (730)
Share by back                                                                                             (7 964)                 -                  -                  -                  -                  -               (7 964)
Capitalisation of costs directly attributable to issue of shares                                         (60 329)                 -                                     -                  -                  -              (60 329)

Changes in ownership interests                                                                                 -                  -            (11 544)                 -                  -                176              (11 368)

Purchase of non-controlling interest in subsidiary                                                             -                  -            (11 544)                 -                  -                176              (11 368)

Movement in put options                                                                                        -                  -                  -                  -              8 863                  -                8 863

Fair value adjustment taken through equity                                                                     -                  -                  -                  -              8 863                  -                8 863

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

Notes
1. Defined benefit plan reserve: Reserves comprise 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.


AUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2018

                                                                                      2018              2017
                                                                                   Audited           Audited
                                                                                     R'000             R'000

NET CASH FLOW FROM OPERATING ACTIVITIES                                            505 044           572 614

Cash generated from continuing operations                                          875 396           955 204
Finance income received                                                             47 676            25 754
Finance costs paid                                                                (272 890)         (254 431)
Taxation paid                                                                     (139 341)         (145 191)
Cash utilised by discontinued operations                                            (5 797)           (8 722)

NET CASH FLOW FROM INVESTMENT ACTIVITIES                                          (345 979)         (605 779)

Purchase of property, plant and equipment and computer software                   (348 745)         (315 115)
Sale of property, plant and equipment and computer software                          3 505            (6 914)
Proceeds from sale of discontinued operations                                        1 000                 -
Other financial assets advanced                                                     (1 739)                -
Acquisition of businesses (net of cash acquired)                                         -          (283 750)

NET CASH FLOW FROM FINANCING ACTIVITIES                                            318 948           266 608

Proceeds from issue of equity shares                                             1 500 000           132 151
Capital distribution                                                              (800 000)                -
Share issue costs                                                                  (60 329)                -
Share buyback                                                                       (7 964)          (39 961)
Loans (repaid to)/advanced by shareholders                                         (17 267)           19 384
Loans repaid by/(advanced to) shareholders                                          39 648           (43 059)
Proceeds from other financial liabilities                                          (34 462)           35 040
Repayment of loans from non-controlling interests                                  (28 592)           (6 518)

Purchase of non-controlling interests                                              (11 368)                -
Proceeds from term loans and asset-based financing                               2 584 364           300 274
Repayment of term loans and asset-based financing                               (2 845 082)         (130 703)

Net increase in cash and cash equivalents                                          478 013           233 444
Cash and cash equivalents at the beginning of the year                             351 327           117 883

Cash and cash equivalents at the end of the year                                   829 340           351 327

Continuing operations                                                              829 340           351 327


AUDITED 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 refrigerated.

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.

                                                                             Year ended      Year ended
                                                                            31 December     31 December
                                                                                   2018            2017
                                                                                  R'000           R'000

INFORMATION ABOUT REPORTABLE SEGMENTS
Revenue
Perishables                                                                   4 569 593       3 729 670
Ambient Groceries                                                             2 471 896       2 614 824
Snacks and Confectionery                                                        477 391         428 505
Baking and Baking Aids                                                          627 839         515 406
Niche Beverages                                                                 650 353         428 278
Household and Personal Care                                                     846 313         826 887
Specialised Food Packaging                                                      248 909         252 879

                                                                              9 892 294       8 796 450
Revenue comprised as follows:
Total revenue for reportable segments                                         9 956 788       8 823 656
Elimination of inter segment revenue                                            (64 494)        (27 206)

Perishables                                                                      (5 663)         (2 215)
Ambient Groceries                                                               (36 694)        (15 156)
Snacks and Confectionery                                                            (94)           (214)
Baking and Baking Aids                                                          (11 599)         (4 360)
Niche Beverages                                                                  (8 598)         (2 413)
Household and Personal Care                                                        (284)         (2 592)
Specialised Food Packaging                                                       (1 562)           (256)

                                                                              9 892 293       8 796 450
Operating profit (EBIT)
Perishables                                                                     338 942         371 759
Ambient Groceries                                                               184 788         284 270
Snacks and Confectionery                                                         58 723          51 569
Baking and Baking Aids                                                           64 731          52 383
Niche Beverages                                                                  (2 312)        (57 057)
Household and Personal Care                                                       5 492           4 847
Specialised Food Packaging                                                       10 402          13 872
Corporate                                                                       (85 770)       (125 812)

                                                                                574 997         595 831
Reconciliation of operating profit per segment to profit before tax
Operating profit                                                                574 997         595 831
Investment income                                                                47 676          25 754
Finance costs                                                                  (272 890)       (254 431)

Profit before tax                                                               349 783         367 154

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.


                                                              Year ended     Year ended
                                                             31 December    31 December
                                                                    2018           2017
                                                                   R'000          R'000
Normalised EBIT and EBITDA
Group - continuing operations
Operating profit                                                 574 997        595 831
Amortisation of customer contracts                               140 841        131 486
Due diligence costs                                                3 319          4 428
Expenses relating to share appreciation rights granted           (13 208)        26 660
Fair value adjustment to put options                                   -         (1 436)
Government grants                                                    (46)          (256)
Impairment losses                                                 42 556         50 000
Gain on disposal of property, plant and equipment                  3 121            959
Costs and fees attributable to the Initial Public Offering         5 007         22 583
Retrenchment and settlement costs                                  7 050         15 193
Securities transfer tax                                               66            275
Straight-lining of operating leases                                3 694           (459)
Strategic advisory fees                                               43          2 291
Unrealised loss/(gain) on foreign exchange                        45 494        (40 211)
Donation                                                           6 000              -

Normalised EBIT                                                  818 933        807 344
Amortisation of software                                           8 017          8 120
Depreciation of property, plant and equipment                    156 714        124 901

Normalised EBITDA                                                983 665        940 365

Perishables
Operating profit                                                 338 942        371 759
Amortisation of customer contracts                                44 676         37 873
Due diligence costs                                                    -             17
Impairment losses                                                    243              -
Loss/(gain) on disposal of property, plant and equipment             365           (425)
Retrenchment and settlement costs                                  2 024          3 807
Straight-lining of operating leases                                3 530            511
Unrealised loss/(gain) on foreign exchange                         5 455         (1 633)

Normalised EBIT                                                  395 237        411 909
Amortisation of software                                             306             87
Depreciation of property, plant and equipment                     59 109         34 284

Normalised EBITDA                                                454 652        446 280

Ambient Groceries
Operating profit                                                 184 788        284 270
Amortisation of customer contracts                                61 151         60 408
Government grants                                                      -           (137)
Impairment losses                                                    313              -
Loss on disposal of property, plant and equipment                  2 144          1 102
Retrenchment and settlement costs                                  2 201          7 704
Straight-lining of operating leases                                  257             72
Strategic advisory fees                                                -          1 716
Unrealised loss/(gain) on foreign exchange                        40 818        (43 217)

Normalised EBIT                                                  291 672        311 918
Amortisation of software                                           4 286            582
Depreciation of property, plant and equipment                     42 467         37 763

Normalised EBITDA                                                338 425        350 263


                                                             Year ended     Year ended
                                                            31 December    31 December
                                                                   2018           2017
                                                                  R'000          R'000

Snacks and Confectionery
Operating profit                                                 58 723         51 569
Amortisation of customer contracts                                4 402          4 402
Government grants                                                     -            (24)
Loss on disposal of property, plant and equipment                    44            124
Retrenchment and settlement costs                                     -            354
Straight-lining of operating leases                                (112)           448
Strategic advisory fees                                               -              -
Unrealised (gain)/loss on foreign exchange                         (116)         4 831

Normalised EBIT                                                  62 941         61 704
Amortisation of software                                            809            257
Depreciation of property, plant and equipment                     9 301          9 590

Normalised EBITDA                                                73 051         71 551

Baking and Baking Aids
Operating profit                                                 64 731         52 383
Amortisation of customer contracts                                9 406          9 406
Loss/ (gain) on disposal of property, plant and equipment            59            (51)
Retrenchment and settlement costs                                   280            306
Straight-lining of operating leases                                (666)        (2 268)
Unrealised loss on foreign exchange                                 258             21

Normalised EBIT                                                  74 067         59 797
Amortisation of software                                            794            669
Depreciation of property, plant and equipment                    17 774         16 659

Normalised EBITDA                                                92 635         77 125

Specialised Food Packaging
Operating profit                                                 10 402         13 872
Amortisation of customer contracts                                2 267          2 267
Government grants                                                   (46)           (95)
Gain on disposal of property, plant and equipment                   (65)          (141)
Unrealised loss on foreign exchange                                  23              -

Normalised EBIT                                                  12 581         15 903
Amortisation of software                                            108            155
Depreciation of property, plant and equipment                     1 225          1 162

Normalised EBITDA                                                13 914         17 220

Household and Personal Care
Operating profit                                                  5 492          4 847
Amortisation of customer contracts                               12 183         12 183
Loss on disposal of property, plant and equipment                   407            994
Retrenchment and settlement costs                                 1 946          2 118
Straight-lining of operating leases                                 685            653
Strategic advisory fees                                              42            212
Unrealised (gain)/ loss on foreign exchange                          (8)           468

Normalised EBIT                                                  20 748         21 475
Amortisation of software                                           (569)         4 052
Depreciation of property, plant and equipment                    16 179         18 202

Normalised EBITDA                                                36 358         43 729


                                                                             Year ended     Year ended
                                                                            31 December    31 December
                                                                                   2018           2017
                                                                                  R'000          R'000

Niche Beverages
Operating profit                                                                 (2 312)       (57 057)
Amortisation of customer contracts                                                6 755          4 948
Impairment losses                                                                42 000         50 000
Loss/(gain) on disposal of property, plant and equipment                            128           (651)
Retrenchment and settlement costs                                                   105            527
Straight-lining of operating leases                                                   -            125
Unrealised gain on foreign exchange                                                (937)          (681)

Normalised EBIT                                                                  45 739         (2 789)
Amortisation of software                                                             91             21
Depreciation of property, plant and equipment                                     8 946          5 894

Normalised EBITDA                                                                54 776          3 126

Corporate
Operating profit                                                                (85 770)      (125 812)
Due diligence costs                                                               3 319          4 411
Expenses relating to share appreciation rights granted                          (13 208)        26 660
Fair value adjustment to put options                                                  -         (1 436)
Loss on disposal of property, plant and equipment                                    40              7
Costs and fees attributable to the Initial Public Offering                        5 007         22 583
Retrenchment and settlement costs                                                   494            377
Straight-lining of operating leases                                                   -              -
Securities transfer tax                                                              66            275
Strategic advisory fees                                                               -            363
Unrealised gain on foreign exchange                                                   -              -
Donation                                                                          6 000              -

Normalised EBIT                                                                 (84 053)       (72 572)
Amortisation of software                                                          2 193          2 297
Depreciation of property, plant and equipment                                     1 712          1 347

Normalised EBITDA                                                               (80 147)       (68 928)

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                                                   1 270 480      1 004 528

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


NOTES TO THE AUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Reporting entity
     Libstar is a leading producer and supplier of high-quality products in the CPG industry and markets 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 and
     maintaining the flexibility to capitalise on growth areas in the CPG industry.

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

     These financial statements have been prepared by P Makate CA(SA) under the supervision of R Smith CA(SA), the Group Financial and Commercial Director, and 
     CB de Villiers CA(SA). The results were approved by the board of directors on 12 March 2019 and the Directors take full responsibility for the preparation thereof.

     The financial results presented have been audited by the group's independent external auditors, Moore Stephens, which expressed an unmodified audit conclusion. The
     auditor also expressed an unmodified opinion on the annual consolidated financial statements from which these condensed consolidated financial statements were
     derived.

     The auditor's report on the condensed consolidated financial statements does not necessarily report on all of the information contained in this announcement.
     Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor's engagement they should obtain a copy of the auditor's report
     on the abridged summarised consolidated financial statements and of the auditor's report on the annual consolidated financial statements which are available for
     inspection at the company registered office, together with the accompanying financial statements identified in the respective auditor's report.

3.   Accounting policies
     The accounting policies applied by the group in these financial statements are consistent with those applied in the consolidated annual financial statements for the year
     ended 31 December 2017 except as detailed below:

     IFRS 15 Revenue from contracts with customers

     The new standard features a contract-based five step analysis of transactions to determine whether, how much and when revenue is recognised. The new standard has
     not had any effect on the timing or quantum of revenue recognition for the group. The group predominantly and materially generates revenue by selling goods in
     accordance with terms which contain no material element of accrued or deferred revenue.

     IFRS 9 Financial Instruments

     In the current year, the group applied IFRS 9 Financial Instruments and the related consequential amendments to other IFRS standards that are effective for the annual
     period that begins on or after 1 January 2018. The transitional provisions of IFRS 9 allow an entity to not restate comparatives. Accordingly, no comparatives have been
     restated for purposes of these consolidated financial statements.

     The amendments introduced by IFRS 9 have not materially impacted the consolidate financial statements as presented.

     Normalised EPS and Normalised HEPS

     To arrive at normalised EPS, the after-tax earnings from continuing operations (as disclosed in the financial statements), is adjusted for the after-tax impact of the
     normalised EBIT adjustments shown above, excluding the after-tax impact of separately identifiable re-measurements as defined in accordance with IAS 33 Earnings Per
     Share read with circular 4 of 2018 Headline Earnings ("Headline Earnings Re-measurements").

     To arrive at Normalised HEPS, the normalised EPS is adjusted for the after-tax impact of the Headline Earnings Re-measurements, the most common examples of which
     are (i) impairment losses on property, plant and equipment, goodwill and intangible assets and (ii) gains and losses on disposal of property, plant and equipment.

     The following standards, amendments and interpretations are not yet effective and have not been early adopted by the group (the effective dates stated below refer to
     periods beginning on or after the stated dates):

     IFRS 16 - Leases (effective from 1 January 2019)

     IFRS 16 was published in January 2016. It sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, i.e.
     the customer ("lessee") and the supplier ("lessor"). IFRS 16 replaces the previous leases Standard, IAS 17 Leases, and related Interpretations. IFRS 16 includes a single
     model for lessees which will result in almost all leases being included in the Statement of Financial Position. No significant changes have been included for lessors. IFRS
     16 also includes extensive new disclosure requirements for both lessees and lessors.

     This new standard will most likely have a significant impact on the group. Had the new standard been implemented in the current financial year a lease asset and lease
     liability of approximately R301 million would have been recognised in the statement of financial position. The group has started a detailed assessment to determine the extent of
     the impact of IFRS 16 and will disclose more detailed information in future financial statements.

     The standard is effective for annual periods beginning on or after 1 January 2019, with early adoption permitted. The group will apply IFRS 16 for the first time in its
     financial statements for the year ending 31 December 2019.

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. 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 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 2017, save as
     noted above.

5.   Other income

                                                                                  Year ended     Year ended
                                                                                 31 December    31 December
                                                                                        2018           2017
                                                                                       R'000          R'000

     Bad debts recovered                                                                  23            173
     Commissions received                                                                 35             39
     Gain on foreign exchange                                                         10 337        129 337

      Realised gain on foreign exchange                                               55 831         89 126
      Unrealised (loss)/gain on foreign exchange                                     (45 494)        40 211

     Fair value adjustment to put options exercisable by executive management              -          1 436
     Government grants(1)                                                                137            684
     Insurance claims received                                                         2 020            552
     Rebates received                                                                     67              -
      Recoveries                                                                           -             11
     Rental income                                                                       454          4 311
     Sundry income                                                                     5 465         10 110
                                                                                      18 538        146 653

     1   Income from government grants includes income received under the Manufacturing Competitiveness
         Enhancement Programme, Skills Development Programme and the Employer Tax Incentive programme

6.   Operating profit

                                                                                  Year ended     Year ended
                                                                                 31 December    31 December
                                                                                        2018           2017
                                                                                       R'000          R'000

     Depreciation of property, plant and equipment                                   156 715        125 400
     Amortisation of computer software                                                 8 017          8 120
     Amortisation of customer relationships                                          140 841        132 462
     Impairment loss on goodwill                                                           -         50 000
     Impairment loss on intangible assets                                             42 000              -
     Loss on disposal of property, plant and equipment                                 3 121            959
     Employee benefits                                                             1 139 027      1 038 333

      Salaries and wages                                                           1 132 805      1 022 457
      Retrenchment and settlement costs                                                6 222         15 876

     Strategic advisory fees                                                              43          2 291
     Due diligence costs                                                               8 326          4 428
     Charges relating to share appreciation rights granted                            13 203         26 660
     Securities transfer tax                                                              66            275
     Operating lease charges                                                         143 912         91 479

      Premises                                                                       113 823         80 534
      Straight-lining of operating leases                                              3 694           (459)
      Motor vehicles & equipment                                                      26 393         11 403

     Research and development costs expensed as incurred                                 430            832
     Auditors remuneration                                                             7 874          6 007

7.   Earnings per share
                                                                                     Year ended      Year ended
                                                                                    31 December     31 December
                                                                                           2018            2017
                                                                                          R'000           R'000

     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                       222 224         188 354

     From continuing operations                                                         234 847         231 637
     From discontinued operations                                                       (12 623)        (43 283)

     Weighted average number of ordinary shares for the purposes of basic
     earnings per share ('000)                                                          566 445         468 189

     Basic earnings per share in cents

     From continuing operations                                                              41              49

     From discontinued operations                                                            (2)             (9)

     From continuing and discontinued operations                                             39              40

     To arrive at Normalised EPS, the after-tax earnings from continuing
     operations is adjusted for the after-tax impact the following:
     Profit for the year from continuing operations                                     234 847         231 637
     Normalised for:                                                                    147 176         123 407

      Amortisation of customer contracts                                                101 406          94 670
      Due diligence costs                                                                 3 319           4 428
      Provision for share appreciation rights                                            (9 510)         19 195
      Fair value adjustments to put options                                                              (1 436)
      Government Grants                                                                     (46)           (256)
      IPO costs                                                                           5 007          22 583
      Retrenchment costs                                                                  5 076          10 939
      Securities transfer tax                                                                66             275
      Straight lining of operating leases                                                 2 659            (330)
      Strategic advisory fees                                                                43           2 291
      Impairment                                                                            401
      Donation                                                                            6 000
      Unrealised forex gains/losses                                                      32 755         (28 952)

     Normalised earnings used in the calculation of basic earnings per share            382 023         355 044

     Weighted average number of ordinary shares for the purposes of basic
     earnings per share ('000)                                                          566 445         468 189

     Normalised basic earnings per share in cents                                            67              76

     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.

8.   Headline earnings per share

                                                                                     Year ended      Year ended
                                                                                    31 December     31 December
                                                                                           2018            2017
                                                                                          R'000           R'000

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

     2018                                                                                 Gross      Net of tax

     Basic earnings from continuing operations                                          234 847         234 847
      Adjustments                                                                        45 121          32 662

      Impairment of brands                                                               42 000          30 240
      Loss on disposal of property, plant and equipment                                   3 121           2 422

     Headline earnings from continuing operations                                       279 968         267 509

     2017                                                                                 Gross      Net of tax

     Basic earnings from continuing operations                                          231 637         231 637
      Adjustments                                                                        50 959          50 744

      Impairment of goodwill                                                             50 000          50 000
      Gain on disposal of property, plant and equipment                                     959             744

     Headline earnings from continuing operations                                       282 596         282 381

     Basic earnings from discontinued operations                                        (12 623)        (43 283)
     Adjustments (net of tax)                                                             5 064          28 659

      Loss on disposal of property, plant and equipment and customer contracts            5 064           5 825
      Impairment of customer contracts                                                        -           5 990
      Impairment of goodwill                                                                  -          16 844

     Headline earnings from discontinued operations                                      (7 559)        (14 624)

     Headline earnings from continuing and discontinued operations                      259 950         267 757

     Headline earnings per share in cents

     From continuing operations                                                              47              60

     From discontinued operations                                                            (1)             (3)

     From continuing and discontinued operations                                             46              57


                                                                                      Year ended      Year ended
                                                                                     31 December     31 December
                                                                                            2018            2017
                                                                                           R'000           R'000

     To arrive at normalised HEPS, the Normalised EPS is adjusted for the
     after-tax impact of the below:

     Normalised basic earnings from continuing operations                                382 023         355 044
      Adjusted for:                                                                       32 674          50 744

      Impairment losses on goodwill and customer relationships                            30 240          50 000
      Loss on disposal of PPE                                                              2 434             744

     Normalised headline earnings from continuing operations                             414 697         405 787
     Normalised headline earnings per share from continuing operations (cents)                73              87

9.   Property, plant and equipment

     During the year ended 31 December 2018, the group acquired plant, equipment and computer software in the amount of R346 million (2017: R315 million). These include
     major capex of R64 million in respect of capacity enhancing equipment and leasehold improvements at Lancewood, R37 million in respect of a new par bake frozen
     facility at Amaro, R54 million in respect of capital enhancing projects which include a new granola facility at Ambassador, R33 million in respect of leasehold
     improvements at Denny, R25 million relating to a chicken plant upgrade and other replacement capacity at Finlar.

     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 2017.

10.  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.

11.  Subsequent events

     The board of Libstar has approved and declared a final cash dividend of 22 cents per ordinary share (gross) in respect of the year ended 31 December 2018.



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 Yvonne Luhabe (Chairperson)
Johannes Petrus (JP) Landman (Lead independent non-executive director)
Sibongile Masinga (Independent non-executive director)
Wahid Suleiman Hamid (Non-executive director)
Sandeep Khanna (Independent non-executive director)
Andries Vlok van Rensburg (CEO)
Robin Walter 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: 13/03/2019 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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