Johannesburg - BidCorp shares shot up more than 6 percent in early trade yesterday after the company reported a 32.5 percent increase in headline earnings per share for the year to end June with major contributions from the UK, and Europe contributing significantly to the results.
Headline earnings per share rose to 1 080 cents up from 815.2c recorded during the the previous reporting period, while trading profit gained 20.1 percent to R5.2 billion.
BidCorp released its first set of results since the unbundling of the internationally diversified food service business from Bidvest at the end of May.
Group performance
The group said as a result of the separate JSE listing on May 30, it has provided shareholders with pro forma financial information to provide insights into the group performance.
Chief executive Bernard Berson said: “BidCorp’s businesses continue to perform well across the world, with solid organic growth in home currencies in very low inflation environments. Our financial position remains strong, cash generation is robust and we retain significant headroom to accommodate expansion opportunities, both acquisitive and organic,” he said.
Pro forma basic earnings per share rose 26.1 percent to 1 034c as compared with pro forma of 819.8c per share in 2015. The group said rand-translated results were boosted by the weakened local currency in the second half.
It said revenue grew 20.8 percent to R140.5bn, up from R116.3bn reported in 2015, with the major contributors being the UK and Europe, reflecting organic growth and currency effects.
Berson said revenue growth was dampened by the deliberate exit of large contract business in various geographies.
The company’s net debt fell to R1.7bn as compared with R3.3bn to 2015.
BidCorp made small acquisitions during the period. These included MPD in the Czech Republic for R162 million and Caterfood and Cimandis in UK for R464m. The group disposed Patleys Food Africa for R171.3m and a minority share in the associate VCN in the Netherlands for R51.6m.
Balancing exposure
Looking ahead Berson said the company’s food service distribution segments remained focused on balancing the exposure between contracts, national and independent customers. BidCorp declared a final gross cash dividend of 241c per share.
Ian Cruickshanks, an independent analyst, said: “The company has come up with very impressive numbers with profits up by 32 percent in this hostile global environment. They are focusing on growing areas in Europe, UK and South America and they are doing well in those areas.”
Cruickshanks said Bidcorp had focused on their area of expertise, which was the food servicing industry. “They have managed to keep the costs down and they are looking at growing the company organically and have an eye for potential acquisitions as well,” he said.
“The unbundling from Bidvest was a great deal for Bidcorp shareholders post unbundling and it is a great stock to hold for long-term investment,” he said.
Bidcorp shares rose 4.82 percent on the JSE yesterday to close at R265.
BUSINESS REPORT