South African food producer Premier Group has R1.1bn available for acquisitions, it said on Tuesday, 12 November 2024, after reporting a 32.4% rise in interim profit.

Already, the group, which vies for market share with rivals such as Tiger Brands, Pioneer Food and RCL Foods, in June acquired a 30% stake in rice importer Goldkeys International, to gain exposure to the market in the staple.

Chief executive officer, Kobus Gertenbach told Reuters on Tuesday, the focus was on diversification as the company was already "a big enough player" in most of the categories it is present in. That means it "can't really buy someone else (in those categories) without creating some competitive issues," he said.

The 200-year-old company, which listed last year, said its headline earnings per share grew to 438cents for the six months ended 30 September from 331cents a year ago.

Group revenue and operating profit grew by 3.7% and 17.3% respectively, boosted by the suspension of electricity load shedding in South Africa and cost-saving initiatives in a challenging operating environment, the company said.

Gertenbach said high maize prices were likely to result in substitution that underpins the logic of the Goldkeys deal.

"I would expect there to be quite a significant substitution, where consumers consume more rice and eat less maize" he said.

Premier Group's acquisition of Goldkeys coincided with a decision by India, the world's No.1 exporter of the grain to allow rice exports, after a ban of more than a year, leading to lower prices.

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