Libstar’s mushroom disposal triggers pre-tax loss of up to R55m

Libstar Holdings Limited has finalised the disposal of its fresh mushroom operations, effective 1 December 2025, a move projected to result in a pre-tax loss on sale of between R45 million and R55 million.

This loss will be included in the group’s earnings per share but excluded from its headline earnings per share.

The group stated that the disposal represents a further decisive step in simplifying its portfolio by sharpening its focus on priority food categories with sustainable growth potential.

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The sale of the fresh mushroom business included the properties in Gauteng (Deodar) and KwaZulu-Natal (Shongweni) as a going concern.

Importantly, the popular Denny brand was retained by Libstar and merely licensed to the purchaser for exclusive use in the fresh mushroom category. Libstar will continue to produce Denny-branded products in other core segments like wet condiments.

Libstar share price

Trading momentum remains strong

Despite taking the loss on the mushroom disposal, the group’s continuing operations demonstrated a resilient performance, reporting year-to-date revenue growth of 6.7% for the 47-week period ended 21 November 2025 (on a like-for-like basis, excluding the mushroom business).

Total group volume growth was 3.1%, supported by a 3.6% contribution from price/mix changes. This performance outpaced the group’s total defined market (excluding staples).

Highlights within the food portfolio include:

• Perishable products category revenue increased by 8.1%. Volumes increased 1.4% (excluding raw milk sales), driven by value-added chicken products.
• Volume sales of core dairy items increased by 4.7%, reflecting Lancewood’s continued market leadership.
• Ambient products category revenue increased by 5.6%, buoyed by strong performance in the wet condiments sub-category.

The group’s gross profit margins tracked ahead of the prior year.

The balance sheet shows improved efficiency, with the net interest-bearing debt to normalised earnings before interest, tax, depreciation and amortisation (Ebitda) ratio reducing from 1.3 times in H1 2025, positioning the group to meet year-end gearing guidance.

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