JSE-listed Premier Group grew operating profit by more than 50% in the first half of its 2027 financial year, its first with Rhodes Quality and Bull Brand in the family, while maintaining a robust balance sheet and commissioning a new bakery in Middelburg.
Despite taking on RFG’s debt in the R6.5 billion acquisition completed in March 2026, Premier kept leverage at 0.7x, in line with pre-acquisition levels, as cash generated from operations rose 43% to R1.8 billion.
“This was our first half-year with RFG in the Group, and it shows what disciplined execution of our strategy can achieve,” says Premier Group CEO Kobus Gertenbach. “The integration is progressing to plan and years of investment in our bakeries and logistics are delivering efficiencies that keep us a low-cost producer of quality products.”
Unaudited results for the six months ended 30 September 2026 show growth across all key financial measures:
- Revenue up 38.8% to R14.3bn
- EBITDA up 51.4% to R2.0bn, margin up 120 basis points to 13.9%
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Premier_Aeroton Bakery Operating profit up 52.5% to R1.7bn, margin up 110 basis points to 11.8%
- EPS up 27.5% and HEPS up 27.1%, at 711 cents per share
- Cash generated from operations up 43% to R1.8bn
- Return on invested capital improved by 300 basis points to 20.6%, from 17.6% at the March 2026 financial year-end, following the RFG acquisition
- R207m returned to shareholders through share buybacks
Millbake, the Group’s bread, maize and flour division, remained the engine behind its earnings. Sales edged up 1.3% to R9.4bn, but EBITDA rose 23.7% to R1.6bn. Put simply, for every R100 of sales, the division now generates R16.80 in EBITDA, up from about R13.80 in the same period last year, helped by disciplined cost management and sustained investment in the business.
That investment is taking shape on the ground. Two new inland bakeries are now in place: Aeroton has reached full-scale production and is performing in line with expectations, while Middelburg, commissioned in September, is expected to deliver further efficiencies as it ramps up. Two older, smaller bakeries, Hermanstad and Potchefstroom, have been closed as planned.
In Mozambique, Premier’s subsidiary CIM, now part of Millbake, improved its operating performance in the last quarter, with the rollout of the Rhodes brand portfolio and further manufacturing upgrades expected to support momentum.
The Group, however, now has more than one major earnings driver. RFG, now operating as the Culinary business within Groceries, appeared in the results for the first time, lifting Groceries sales to R4.9bn and EBITDA to R513m, a 10.4% margin against 9.8% in the same period last year. Millbake’s share of Group sales fell to 66% from 81% at the March year-end, reflecting the broader base of the enlarged Group rather than any slowdown in the bakery business.
“Millbake remains the foundation of this Group, and its results show what years of investment in our plants and logistics can deliver,” says Gertenbach. “What has changed is that we now have a second platform in the Culinary brands, with a strong pipeline of new products and more ways to grow.”
Within Culinary, the fresh range continues to perform well, with a broader selection of pies and pastries and a strong pipeline of new products planned for the Woolworths offering. Long-life products also had a good six months overall.
Elsewhere in Groceries, the picture was more mixed. In Personal Care, trading in formal retail was subdued as consumers felt the financial pressure and retailers pushed low-priced own-label pads, though new production lines are improving efficiency. The UK business delivered a strong performance, with growth outside tampons offsetting the decline in that category. Sugar Confectionery underperformed, and corrective action is under way to restore volumes and improve service levels.
Premier has decided not to reopen its fruit processing site in Tulbagh, as a rapid decline in global canned fruit export prospects made it economically unviable. The Group has stood by affected employees and fruit producers and is now looking at new uses for the site and ways to support the Tulbagh community. Premier also continues to engage constructively with the Competition Commission.
Meanwhile, the work of bringing the two businesses together is paying off, with merger synergies already coming through in merchandising, distribution, procurement, sales and systems. Premier expects further benefits over the next six months as Culinary moves onto the Group’s merchandising platform and the two supply chains continue to come together.
Looking ahead, input costs will be the main watchpoint. Grain prices are expected to stay lower through to the end of the financial year, after which El Niño weather patterns are likely to push them higher, although a normalisation in global oil prices could help offset this. The Group is also hopeful that disruption to informal trade from political instability will ease after the local government elections.
As the two new inland bakeries reach full operating potential, Premier expects further returns from the combined infrastructure and logistics gains. Increased cash generation will go towards capital expenditure, further debt reduction and further share buyback opportunities.
“We are a bigger, more capable business, well positioned to deliver sustainable growth and value for our shareholders,” says Gertenbach. “We have a broader portfolio, a stronger platform and a team that has shown it can deliver, and we look forward to the second half with confidence.”
