‘There’s a lot of opportunity to drive costs out’ – Premier CEO

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JIMMY MOYAHA: Premier Group, the business responsible for bringing us brands like Snowflake, Blue Ribbon and Rhodes Quality among others, released their full-year results for the financial year ended the 31st of March 2026.

We’re going to look at these numbers with the company’s group chief executive officer, Kobus Gertenbach. He joins me on the line now to see what we make of their performance.

Kobus, lovely having you on the show, as always. Thanks so much for taking the time.

Revenue is strong – more than 5% growth in that respect. Earnings before interest and tax up as well. Operating profit up north of 20%. How did you and the team feel about the year that was? It seemed a good year by all accounts.

KOBUS GERTENBACH: Yes. I think, we benefitted from a cheaper maize price, but I think wheat prices pretty much went sideways. Not too much change there, but it enabled us to really have zero inflation in our portfolio for most of the year.

So most of our revenue growth was driven by increases in volume – a very pleasing result for us that we managed to do that in difficult market conditions.

JIMMY MOYAHA: Kobus, let’s look at some of those difficult market conditions, the business operating largely in the consumer space.

But as a producer, as a retailer, as a wholesaler across many, many aspects of the business, take us through the Millbake business, take us through the groceries business. How did each of the divisions perform and where were those challenges that you alluded to?

KOBUS GERTENBACH: From our side, bread is the biggest business unit within our portfolio.

We have continued to benefit significantly from the enormous investments that we made over the past few years.

I think over the last four years, we’ve invested almost R3 billion across our various manufacturing facilities, with the biggest portion of that going into our bakeries.

Read: Premier lifts earnings, declares special dividend [Nov 2025]

That culminated in us opening up our new Aeroton bakery in in January, after we shut it down in 2023. So it’s taken us the better part of two-and-a-half years to complete and get that project off the ground.

On the wheat-milling side, Snowflake continues to be a powerhouse brand, and we certainly have the best-selling cake flour on the market.

On the maize meal side, we saw a nice downward trend in raw maize prices that came through. We pushed most of that through to the end consumer, and so the consumer really benefitted from much cheaper maize meal for the latter part of our financial year towards the end of March.

On the sweet side, we’ve grown our portfolio in products that we’ve manufactured under private label for some of the larger retailers quite significantly, and have benefitted from the increasing scale of that.

And on the feminine hygiene side, we put a lot of new factory capability into our factory in KZN, and started to manufacture a lot of the products that we used to import from outside the country – to manufacture that ourselves for the local market.

These cost advantages and the scale of that manufacturing operation are really what we will also continue to benefit from going forward.

So I think all in all across the various business units we’ve continued to try to identify the right projects, make the right investments, and to drive our scale and our efficiency.

JIMMY MOYAHA: Kobus, can we look at the obvious big news out of the Premier Group for this particular financial year? That is, finally getting the R6.5 billion RFG [Rhodes Food Group] Holdings deal over the line?

This is something that you and the team have been working on for quite some time. It is something that has been quite the priority since Premier’s listing in bolstering the business in what you have. Take me through that acquisition, that transaction, and being able to conclude it within the financial year?

KOBUS GERTENBACH: Yes. I think the whole idea of combining their business into ours really sprung from the fact that they have a very well-established portfolio of extremely well-known brands. It has also been around for a very long time. They command a very strong market share in the different categories they play in.

But, importantly, we didn’t have a single product in our portfolio on which we were competing with each other. So that was 100% complementary.

And the economies of scale from merchandising, distribution and the combination of the businesses really made sense for us to go through the transaction.

As you say, it took us quite a while to get through the various approvals. We received Competition Commission approval on the 11th of March. That was the final condition of the transaction.

And so, in our numbers, we have consolidated 21 days’ worth of trading results from the RFG portfolio. It didn’t really have any material impact on our performance for the year.

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But we are well underway and the integration is going extremely well. We’ve made good progress and we have multiple projects underway to start looking at driving the synergies through a combination of suppliers and combining different banking facilities, running one insurance portfolio, et cetera.

So there is a lot of opportunity for us to continue to drive costs out between the two businesses.

JIMMY MOYAHA: Kobus, before I let you go, I want to look at that opportunity set, and perhaps what it looks like for the Premier Group going forward.

The business is able to provide a cash dividend to shareholders this year, even though the acquisitions and the challenging environment going into the new financial year – which were already in the process.

How is the business approaching this? Are we still looking for complementary acquisitions, or are we looking to finalise integration and make sure that the business is streamlined where possible? How are you seeing your business, but also your environment?

KOBUS GERTENBACH: I think that our primary focus is on completing the integration of the two businesses. It’s going to take another couple of months.

On the 1st of July we’re combining merchandising structures. On the 1st of October we will look to integrate some of the logistical sides of things. So there’s a lot of focus on that. I think that as we learn more about the business and as we look at opportunities together there are lots of further opportunities for organic capital investment.

And so we’ve got a number of streams underway to look at those projects and identify the best and optimal way of continuing to invest for our growth.

We did a share buyback in March. it’s a general buyback; one is not allowed to buy back any shares during a closed period. Obviously we are out of that again now, so if we do have some further free cash coming available over the coming months, we’d probably look to continue on our share buyback programme as well.

And then, just given the growth in our earnings, we have a 30% of diluted earnings per share payout ratio on dividends. So if one continues to grow one’s headline earnings per share, then there’s quite a nice tick-up in the dividend payout as well.

I think that’s sort of the order of focus for us from a capital investment perspective.

JIMMY MOYAHA: A focus on growth, a focus on integration, and a focus on bringing all of this together in a single business. That’s where the Premier Group Limited business is focused following its successful financial year.

We’ll leave the conversation on that note. Kobus Gertenbach, chief executive officer at Premier Group joined us to look at the year that was and what lies ahead.