Lancewood owner Libstar to buy Cape Foods herb and spice company

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Libstar will release its interim results in September
Libstar will release its interim results in September
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  • Cape Foods produces a variety of branded private label herb, spice and seasoning blends.  
  • The value of the acquisition has not been disclosed and it is expected to be finalised in November.
  • The group, which also owns the Lancewood brand, made the acquisition announcement in its trading update for the six months to end-June.
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Libstar, the JSE-listed owner of Lancewood and Denny is acquiring herb and spice manufacturer Cape Foods.

The Cape Town based company was founded by Gerhard Martin 20 years ago and produces a variety of branded private label herb, spice and seasoning blends. 

The value of the acquisition has not been disclosed and it is expected to be finalised in November, once its conditions are met.

"The acquisition provides access to new markets and value-added products in the dry condiments category," Libstar, which currently owns the Cape Herb & Spice brand, said in its announcement on Wednesday. 

The group announced the acquisition in its trading update for the six months to end June on Wednesday. Its share price jumped 12% earlier on Wednesday, before settling at around 6% by late afternoon. 

Libstar is trading at over 560 cents, after falling to a year-low of around 502 cents in July.

The group, which will release its interim results next month, has predicted that its normalised headline earnings per share will increase by between 11.5% and 16.7%.

Earnings before interest, taxes, depreciation, and amortisation is expected to increase by 3.6% to 5.6% (to between R488 481 and R497 909), while total revenue increased by 9.6%.

Libstar's volume sales grew by 6.9%, aided by increased volumes of Lancewood hard cheese and sauces, vinegars, and other condiments. The volume growth came despite lower export volumes of value-added herbs and spices due to ongoing shipping delays.

The group's results were also impacted by foreign currency losses of R12.6 million, from a forex translation gain of more than R1 million in the previous year.

Libstar's household and personal care divisions made up of Chet Chemicals and Contactim continue to be held for sale, while the company evaluates the division.

The group also exited its Glenmor Soap business.

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