Bread being bakes at a Premier Group-owned Blue Ribbon bakery. The group said a global soft commodity price cycle appears to have bottomed.
Image: Simphiwe Mbokazi/Independent Newspapers
JSE-listed Premier Group has warned it will likely need to increase the prices of its 52 mainly food-branded products by 5% due to increases in fuel, packaging, and other fuel-related input costs.
The warnings of food price increases follows that of another South African major food manufacturer Tiger Brands, which said two weeks ago the ripple effects of geopolitical uncertainty would not only impact their supply chain, but also consumer disposable income, and additional efficiency improvements and "select price increases" would be necessary to minimise adverse impacts to profitability.
The 202-year-old Premier Group said Wednesday in results for the year to end March that the forecasted El Niño is also expected to impact grain supply and prices negatively going forward. A global soft commodity price cycle appears to have bottomed, the group said.
Ongoing tariff uncertainty will impact its Culinary International division’s sales, but the current 10%/12.5% versus a prior 30% US tariff rate is likely to provide a more favourable trading environment during the key marketing season, than in the previous year.
“The inflationary conditions are further expected to increase the cost of capital and maintain our focus on debt reduction to support sustained earnings per share growth,” said CEO Kobus Gertenbach.
The warnings about food price increases follows that of another South African major food producer Tiger Brands, which said two weeks ago that the ripple effects of geopolitical uncertainty are expected to be felt more acutely in the second half of its 2026 financial year, not only impacting the supply chain, but also consumer disposable income, and additional efficiency improvement and "select price increases" would be necessary to minimise adverse impacts to profitability.
Despite the cloudy outlook, the group has ended its 2026 financial year with record profits, a landmark acquisition, and a brand-new bakery.
Headline earnings per share (HEPS) were up 27.7% to 1,204 cents, operating profit increased 23.2% to R2.4 billion, while revenue ended 6.6% higher at R21.2bn. Cash generated from operations was up 39.5% to R3.3bn.
“It’s the quality of these earnings that gives us the most confidence. Everything is driven by volume growth and operational efficiency rather than price. This really does speak to the underlying strength of our business model,” said Gertenbach.
The engine behind the numbers is Millbake, Premier's bread, maize, and flour division, which accounts for 81% of group revenue. A collapse in white maize prices—down 31% since March 2025—drove a surge in consumer demand, with savings passed onto consumers already under pressure.
Meanwhile, Premier's bread brand equity score climbed by 10 percentage points over three years, a figure that reflects years of quiet, consistent investment.
The Aeroton bakery was commissioned in the second half, with both baking lines running by March 2026. Volumes are ramping up steadily towards full capacity.
The three-year capital project enhances Premier's bread-making capability in the inland region, and it also enables the decommissioning of old bakeries. The new bakery will replace the capacity of three small-scale, older-generation bakeries in the region, the first, in Hermanstad, was mothballed in April 2026.
The Groceries and International division had a more mixed year, though headline numbers were strong. Sugar Confectionery performed well, following a strong Easter and new Woolworths products.
Personal Care faced headwinds in South Africa and the UK, where shifts in consumer behaviour impacted the tampon segment. Gertenbach says this was offset through new channels and export markets.
Premier's acquisition of RFG Holdings, completed at a value of R6,5bn, brought Rhodes Quality, Bull Brand, Hinds, Pakco, Mama's Pies, and other brands into Premier, alongside an extensive private label range.
Premier now operates 52 brands across 44 sites and employs approximately 15,500 people. The acquisition closed in March, so RFG is expected to contribute meaningfully to profits going forward.
"This acquisition is a defining moment in Premier's two-century history. We have built a broader, stronger platform with complementary brands, greater scale, and a significantly enlarged manufacturing footprint,” said Gertenbach.
A final dividend of 182 cents per share was declared, bringing the total for the year to 341 cents, up 25.8% from 271 cents in 2025.
Gertenbach said the new 2027 financial year would be one defined by integration at the group. The Groceries division, now housing Culinary, was expected to grow to about one-third of group earnings as the expansion unfolds.
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