The group operates in 37 countries and it has recently gained footprints in countries like Portugal, Germany and Malaysia.
Chief executive Bernard Berson said the group’s strategic focus called for the balancing of exposure between contract, national and independent customers.
“Rebalancing had driven gross and trading margin improvements, despite generally low inflation environments and subdued economic growth. Every business improved its performance in home currencies, with the exception of Aktaes Turkey and Logistics UK,” Berson said.
Bidcorp was unbundled from Bidvest Group in May last year and it said in view of last year’s separation, Bidcorp provided pro forma information as well as audited results to allow truer comparison with prior performance.
In the results for the year to end June, Bidcorp reported revenue of R130.9 billion, down from the pro forma of R140.5bn reported a year ago. Net revenue fell 6.8%, largely due to currency impacts and deliberate exit in various geographies of some low-margin business.
The group said constant currency net revenue growth of 4.6% was delivered, reflecting the focus on core food service markets in all geographies.
Operating expenses fell by 4.9% during the period, despite wage pressures in growing economies and higher sales and distribution costs.
Trading profit rose 6.9% to R5.5bn, up from R5.1bn and trading margin improved to 4.2%.
Headline earnings per share rose 9.4% to 1181 cents, while basic earnings per share jumped 16.7% to 1207,1c.
The net debt remained flat at R1.7bn, same as last year, despite significant expansion and acquisitions.
Berson added that Bidcorp remained well capitalised, with trading profit interest cover at 25.1 times. “We remain conservative in our approach to gearing and retain adequate headroom for further organic and acquisitive growth,” he said. The group declared a final cash dividend of 250c a share.
Bright Khumalo, an analyst at Vestact, said the Bidcorp results were good, notwithstanding, the stronger rand in the period. “Overall operations in Australasia, Europe, emerging markets performed well, showing growth and healthy profits on the back of cheaper oil prices, lowering operating costs and dining out being the favoured option amongst millennial,” Khumalo said.
However, he cautioned: “As you know, the UK market had a shocker of a year with revenues down 18% and profits down 9.6% and this had to do with Brexit. Lots of routes are not as profitable and fewer people are eating out. Management did well to control costs to manage the bleeding,” Khumalo said. He gave the business his thumbs-up.
“We like the business, it is in a league of its own and it is well diversified throughout the world by manufacturing and distributing food in different types and form. Nothing is more addictive than food,” he said.
Bidcorp shares dropped 2.26% to close at R300.05 on the JSE yesterday.