Iconic South African company sold for R55 million loss
Libstar has sold Denny Mushrooms at a loss of up to R55 million, with the company also looking to sell a separate business.
Libstar stated that it disposed of its mushroom operations on December 1, 2025, marking a decisive step in its focus on priority categories with sustainable growth potential.
The sale of the business, as a going concern, also includes the properties situated in Gauteng (Deodar) and KwaZulu-Natal (Shongweni).
However, the disposal does not include the property situated in the Western Cape (Phesantekraal), which remains subject to closure. The Phesantekraal will be divested by the group in due course.
The Denny brand has been licensed to the purchaser for exclusive use in the fresh mushroom category, and will continue to produce and market value-added Denny-branded products.
Libstar expects to report a loss on sale before tax on its fresh mushroom operations in the annual financial results for 2025 of between R45 million and R55 million.
The loss on sale will be included in Libstar’s earnings per share, but excluded from its headline earnings per share.
Denny Mushrooms has faced extreme challenges in recent years, which include its Shongweni plant in KZN closing due to a fire. The purchaser of the business has not been named.
In addition to the sale of Denny Mushrooms, the group noted that it is looking to exit non-food categories and focus exclusively on food manufacturing.
The group is thus evaluating the non-bidding expressions of interest with respect to the potential acquisition of its remaining Household and Personal Care business, Contactim.
Trading update
The group also provided a pre-close trading update for the 47 weeks ended November 21, 2025, with the sale of Denny Mushrooms excluded from both the current and prior periods.
Retail sales value growth for Libstar’s Total Defined Market (excluding staples) continued to decelerate in Q3. Wholesale channel sales growth also exceeded growth in the Retail channel.
“Consumers, therefore, continue to face financial pressure, notwithstanding moderating inflation and interest rates,” it said.
“Against this background, Libstar’s portfolio delivered growth ahead of its Total Defined Market, thereby sustaining the resilient trading momentum of H1.”
Libstar’s year-to-date revenue increased by 6.7%, with group volumes rising by 3.1%, with a price/mix contribution of 3.6%.
As previously communicated, the group said that extraordinary events increased sales volumes, with the year-to-date effects including
- A 9.0% increase in group volumes as a result of the on-sale of unprocessed raw milk to Industrial channel customers in the Dairy sub-category, which facilitated the balancing of raw material and finished goods inventory levels, offset by
- A 1.2% decrease in group volumes as a result of the closure of the Chamonix Springwater business in the prior year; and
- A 1.5% decrease in group volumes as a result of lower Industrial channel bulk vinegar sales due to Q1 2025 capacity constraints.
The group’s Ambient Products category revenue increased by 5.6%,, while the Perishable Products category revenue increased by 8.1%.
The official financial results for 2025 are expected on 17 March 2026.
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