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Business|Efficiency|Energy|Products|Environmental|Operations
Business|Efficiency|Energy|Products|Environmental|Operations
business|efficiency|energy|products|environmental|operations

Bidcorp delivers 4% rise in interim HEPS despite headwinds

Bernard Berson

Bernard Berson

19th February 2020

     

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JSE-listed Bid Corporation (Bidcorp) achieved “a resilient performance” in the six months to December 31, despite “volatile social, political and environmental circumstances in some operating geographies and despite underperformance in a number of operations,” CE Bernard Berson said on Wednesday.

For the period, headline earnings per share (HEPS) increased by 4% to 728.3c, while basic earnings per share (EPS) were 3.8% higher year-on-year at 725.4c.

Berson indicated that the overall picture was one of steady growth by a resilient, well-run business that successfully channelled the efforts of 27 000 employees worldwide.

“Despite challenges and unpredictable geopolitical circumstances, we remain greatly enthused by the positives that exist and the growth opportunities that abound,” he said.

Extraneous impacts were difficult to measure, but included protests in Hong Kong, riots in Chile, Brexit- and election-related uncertainty, and bush fires in Australia.

Berson acknowledged underperformance in Bidfresh UK, Spain and Germany, but noted that remedial action was being taken.

He cite good asset management and strong cash generation during the period, which will continue to be pursued.  

Currency volatility had a limited impact on rand-translated results for the interim period.

Net revenue of R68.2-billion grew by 3.2% year-on-year.

Berson said good volume growth in the independent sector had been offset by Bidcorp’s multiyear journey to transition away from larger, low-margin logistic-type activities.

The overall cost of doing business increased to 18.8%, influenced by a greater focus on free trade customers.

“Significant investments into operational capacity contributed to overhead growth, [but] the efficiency benefits have yet to fully manifest themselves,” said Berson.

Cost pressures continue in wages, fuel and energy; however, the rate of growth appeared to be moderating.

Trading profit rose 9.2% to R3.6-billion.

“Bidcorp remains well-capitalised and retains adequate headroom for further organic and acquisitive growth,” averred Berson.

Bidcorp declared an interim cash dividend of 330c a share, a 6.5% increase on the prior year’s interim dividend.

PROSPECTS

Berson said Bidcorp remains focused on organic growth opportunities in the wholesaling of food and allied products to the eating-out-of-home market, through achieving the appropriate customer mix, by selling more products and by gaining new customers.

Acquisitions – as opportunities arise – would take the form of in-territory bolt-ons to expand geographic reach or product ranges and via strategic acquisitions in new markets.

Efforts to realise the potential of underperforming assets in Spain and Germany will be pursued.

“Management changes within Bidfresh UK should see this business return to growth in the medium term,” posited Berson.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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