Libstar Holdings (LBR) H2 2025 earnings summary

Executive summary

• Revenue grew 8.2% year-over-year to R12.3bn, with strong cash generation and improved gross profit margins amid subdued retail market conditions and moderating inflation.

• Achieved materially improved results for FY2025, reflecting consistent execution of simplification, growth, and sustainability strategy.

• Market share was maintained and expanded, supported by innovation and extension of own-brand and private label ranges.

• Normalized EBIT rose 11% to ZAR 726 million; normalized EBITDA up 6.6% to ZAR 1.07 billion.

• Strategic review concluded that non-binding acquisition offers did not reflect fair value, with focus remaining on sustainable, profitable growth and stakeholder value.

Financial highlights

• Group revenue up 8.2% year-over-year; ambient products up 7.4%, perishables up 9.2%.

• Normalized EPS increased 21.7% to ZAR 0.706; basic EPS up 22.7% to ZAR 0.545.

• Gross profit margin improved to 22% (up 0.4pp year-over-year).

• Cash conversion ratio reached 95% (from 80.1% in 2024); gearing ratio reduced to 0.9x (from 1.5x).

• Dividend increased to 28cps (from 15cps in 2024); capital expenditure rose 24.2% to R241.1m, representing 2% of revenue.

Outlook and guidance

• Consumer environment expected to remain constrained with moderate inflation and persistent cost-of-living pressures.

• Earnings expected to be more weighted to H2 due to integration activities.

• Focus on further simplification, margin protection, disciplined capital deployment, and accelerated growth.

• CapEx for 2026 anticipated at upper end of target range, mainly for site consolidations in H2.

• Short-term targets: gearing <1.2x, ROIC >WACC, cash conversion >80%, group EBITDA margin 8.5–9.5%.