South Africa - Johannesburg - Bidcrop Bernard Larry Berson is Chief Executive Officer & Executive Director at Bid Corp during the Bidcorp results presentation Bhekikhaya Mabaso African News Agency (ANA)
CAPE TOWN – Bid Corporation (Bid Corp), which lifted headline earnings per share (Heps) a healthy 12.5percent in the year to June 30, had adjusted to the volatile “new normal” in the global markets where it operated and was budgeting for growth in 2020, chief executive Bernard Berson said on Wednesday.

The international food service and technology group's share price closed 2.89 percent higher at R311 on the JSE on Wednesday. Demographics and industry drivers of the group's food service markets remain positive, Berson said.

And while forecasting earnings growth would entail making a call on the rand, which Berson said he was not prepared to do, he said they were targeting growth in the high single digits.

Some 95 percent of turnover, which rose 9.8 percent to R129.3 billion in the year - was now derived offshore, he said in a telephone interview. Trading since year-end, generally, was in line with expectations, he said.

Trading profit increased 11.8 percent to R6.7bn the past year, with good trading profit growth in Australasia, Europe and the UK. Cash generation before working capital was up 15.4 percent to R8bn.

The final dividend increased 17.9 percent to 330 cents per share. He said the group was focusing on organic growth. There might be smaller bolt-on acquisitions, while the opportunities for large acquisitions remained “few and far between,” he said.

He said it was a strong performance in the past year, considering the volatile conditions of many of the group's operating geographies.

Heps came to 1 443.6c per share. In constant currency terms, Heps grew 7.7 percent.

Trading in most of their geographies remained positive, despite persistent low food inflation and moderate economic growth, and in spite of cost pressures in wages, fuel and energy. Food inflation also remained flat in South Africa.

Good revenue growth and better gross margins helped offset cost pressures, particularly labour, energy and fuel.

“We are pleased with the performances from the UK Foodservice unit, which produced an excellent result. Europe continued to deliver, particularly Eastern Europe, and Australasia's results, where New Zealand achieved both top-line and margin growth, was satisfactory,” he said.

In emerging markets, South Africa had a stronger second half, despite tough economic conditions. Greater China's performance lagged, but a recovery was evident in the latter part of the financial year.

The overall cost of doing business increased to 18.7 percent compared to 18.3 percent last year on higher sales and distribution activity, a larger invested operational capacity base and greater focus on smaller, often individual-owned business customers.

Lower acquisition costs reflected focus on bedding down investments made in previous periods.

The group was well capitalised for further organic and acquisitive growth. “We like to retain good fire-power,” Berson said.

“We remain conscious of the need to balance gearing and shareholder returns, but we believe a strong financial position is a positive attribute in today's volatile global markets.”

The most significant acquisitions entailed the acquisition of the remaining minority of the D&D bolt-on acquisition in Italy, 100 percent of Igartza in Spain and Punjab Kitchen (rebranded as Simply Food Solutions) in the UK.

Meat, value-add processing and supply chain procurement initiatives all remain areas of further potential across all businesses, Berson said.

BUSINESS REPORT