Our opinion on the current state of PMR

Premier, a prominent food producer, marked its entry into the public market through an initial public offering (IPO) on 24th March 2023, successfully raising R3.6 billion at a share price of 5382c per share. This strategic move, which saw it spun out from Brait (BAT), positioned Premier as an independent entity on the stock exchange, with Brait retaining a 47.1% stake in the company. Premier's successful management of loadshedding's impacts on its operations, without significant financial repercussions, demonstrates its operational resilience and efficient crisis management capabilities.

For the fiscal year ending 30th September 2023, Premier reported a 7.1% increase in revenue alongside a modest 0.8% rise in headline earnings per share (HEPS). These figures underscore the challenging trading environment characterized by currency fluctuations, soft commodity volatility, extensive infrastructural constraints, and high interest rates. The consumer sector's significant stress, exacerbated by a low-growth economy, has posed additional challenges to Premier's operational context.

In a trading update for the year ending 31st March 2024, Premier reiterated its revenue growth of 7.1% and an identical 0.8% increase in HEPS, highlighting a strategic focus on margin maintenance amid moderated revenue growth to low single-digit figures. This approach reflects Premier's commitment to operational efficiency and financial stability in a challenging market.

Since its listing in March 2023, Premier's share price has shown a trend of sideways to slight upward movement, though it remains too early for extensive technical analysis or definitive market performance assessments. The expectation that Premier will establish itself as a blue-chip operation, attracting institutional investors, suggests a positive outlook for private investors considering this stock. Premier's operational resilience, strategic market positioning, and focused management approach position it as a potentially solid investment in the South African food production sector, despite the prevailing economic and operational challenges.