Premier Group: A well-oiled machine that continues to compound earnings - Reiterate OW

研报英文原文证据摘录

Premier Group: A well-oiled machine that continues to compound earnings - Reiterate OW

ers above will consider reducing their combined holdings over Adj. EBIT - 27E (R mn) 3,770 3,863 2.5%

Adj. EBIT - 28E (R mn) 4,215 4,274 1.4%

time to improve free float. In our view, greater liquidity would broaden the

investable universe and could act as an additional catalyst for a meaningful re- Half Yearly Forecasts (FYE Mar)

rating (see also our UK and Europe feedback note). We increase our FY27-28 Adj. EPS (c)

DHEPS estimates by 2-3% and thus increase our Dec-27 PT to R235 (from R220) 2026A 2027E 2028E

and maintain our OW rating. H1 529.79 734.94 832.44

H2 616.03 799.82 879.96

FY 1,135.49 1,534.77 1,712.40

In our view, Premier’s management has increasingly addressed the levers

within its control. The RFG acquisition diversifies the earnings base, while the Style Exposure

continued investment in mega-bakeries and operational efficiencies underpins a

credible medium-term earnings growth trajectory. As a result, we think the next leg

of value creation is less about strategy and more about market structure –

specifically, whether the stock can absorb incremental institutional demand. This

is where the top three shareholders become pivotal. With more than 50% of the

register held by Titan, Brait, and CapitalWorks, liquidity remains a binding

constraint. In practical terms, limited free float can cap position sizing, reduce the

number of funds that can participate, and slow the transmission of improving

fundamentals into a higher market capitalisation. We therefore see the “doubling

the market cap” path as a function of two variables: fundamentals and investability.

The fundamentals, in our view, are on track and largely within management’s