Business

200-year-old company in South Africa shooting the lights out

Luke Fraser

 ·20 Mar 2026

Premier is expecting an over 20% rise in its earnings, with the group anticipating major efficiency gains following the opening of its Aeroton mega-bakery.

In a trading statement for the year ending 31 March 2026, Premier said it expects its basic earnings per share to increase by between 20% and 30%, to a range of 1,123 to 1,217 cents per share.

Headline earnings per share are also expected to increase by between 20% and 30% to a range between 1,131 and 1,226 cents per share.

The group added that it expects mid-single-digit revenue growth for the year, notwithstanding deflation in global grain prices.

“Recent crop estimates and global stock levels indicate ample grain availability, which is expected to result in continued subdued pricing in the near term,” the group founded in 1824 said.

“Volume growth has translated into a meaningful uplift in operational earnings, supported by improved efficiencies and consistent operational execution.”

The group added that it has sustained capital investment across its diverse asset base, with a focus on manufacturing excellence, people development, and supply chain optimisation.

This capital investment led to continued tangible growth for the group.

It added that the commissioning of the Aeroton mega-bakery represents a key milestone and is expected to further enhance operational efficiencies.

The Aeroton mega-bakery should also drive economies of scale and improve the quality of Premier’s bread in the inland region.

Since November, the company has been on a general share repurchase agreement. The aim was to optimise the group’s capital structure ahead of the implementation of the RFG Transaction.

The group is looking to acquire its competitor, RFG, through a share-swap deal. The deal has received the Competition Tribunal’s go-ahead.

By March 2026, the group repurchased 1,811,992 shares for an aggregate consideration of circa R323 million.

The group will release its results for the 2026 financial year on 17 June 2026.

Battle of the breads

Premier is engaged in one of the most heated battles in South Africa – bread. The sector is facing intense competition, two decades after a bread cartel was uncovered.

The main milling and baking players are Premier (Blue Ribbon), RCL Foods (Sunbake), Pioneer Foods (Sasko), and Tiger Brands (Albany).

Sean Culverwell, Investment Analyst at Anchor Capital, said that a major advantage for Premier is its vertical integration, as around 60% of its wheat flour is supplied internally from co-located mills.

This makes Premier the lowest-cost producer in the market and provides a natural hedge against the volatility in wheat pricing and supply.

The group owns 13 bakeries and invested heavily in highly automated “mega-bakeries,” including a Pretoria facility, commissioned in 2023, and the Aeroton bakery, commissioned in 2025.

These bakeries can produce 8,000 loaves per hour compared to the traditional 5,000-6,000.

“Historically, Premier’s inland bakeries generated materially lower margins than coastal operations due to outdated technology,” said Culverwell.

“The commissioning of Pretoria and Aeroton marks a structural shift. Management expects several older inland bakeries to be mothballed, resulting in a sustained uplift in operating margins.”

Premier’s inland expansion is attractive, with Gauteng accounting for one-third of all bread consumption, and Blue Ribbon overtaking Sasko to become the number two player in the province.

If Premier were able to lift Gauteng market share to the national average, Anchor Capital thinks inland volumes could increase 20% over the medium term.

“Premier’s exposure to the informal channel is another advantage, with roughly 75% of its bread volumes sold through this channel, supporting both mix and operating margins,” said the expert.