SOUTH AFRICA – Premier Group, one of the oldest and most renowned food producers in South Africa, saw its shares surge by more than 11% after its successful listing on the stock market, the company has reported.
The company, owned by billionaire Christo Wiese’s private equity firm Brait, has a strong presence in the South African market with its top brands such as Blue-Ribbon bread and Snowflake baking products.
Earlier, the company had revealed that the initial public offering (IPO) was suspended owing to “South Africa’s capital markets were not “conducive to supporting a successful IPO” and hence resolved not to proceed with the offer
However, the brave decision has seen the company begin trading with 128.9 million shares issued despite recent market turmoil caused by fears of a banking crisis and Federal Reserve rate hikes.
Positively, investors showed their confidence in the company’s prospects by snapping up its shares, which were offered at 53.82 rands ($2.96), and trading at 60 rand in the afternoon, just hours after its debut on the stock market.
Shares in the group gained 11 percent to 60 rand, valuing the group at 7.8 billion rands while lifting the JSE market capitalization to R21.9 trillion, and the number of listed entities to 302
According to the company, this positive response to the Premier Group’s listing is a clear indication of the company’s strength and resilience in a challenging market environment.
Kobus Gertenbach, the company’s CEO during the listing ceremony said that the growth strategy executed over the past decade has resulted in sufficient scale whereby it is now more suitable to be publicly owned than stay private.
“Premier has set the foundation for success with double-digit growth for the last five years resulting in the scale to list so that we can more readily pursue our organic and acquisitive growth strategy”, he added. “We believe we can build on this foundation to embed our strong market position”.
Premier Group, which trades under the JSE share code PMR, reported revenue of R14.5 billion for the year ended 31 March 2022, representing a 16% growth over the prior year
The owner of South African brands such as Snowflake, Blue Ribbon, and Iwisa mealie-meal, Premier started as a bakery in 1824 in Cape Town and was first listed on the JSE in 1960.
In 2005, Private equity player Brait took it private and retains a 47 percent shareholding after the listing
Brait raised R3.6 billion after selling its shares to businessman Christo Wiese, who will own 31 percent as well as to South African institutional investors who will hold 21%. Management has 1 percent, according to a company press release
JSE Director of Capital Markets Valdene Reddy said Premier’s listing is a product of an effort to boost the number of companies listed on Africa’s biggest stock exchange after several de-listings over the years as the economy struggled