Bidcorp’s chief executive, Bernard Berson. Photo: Supplied
Bidcorp’s chief executive, Bernard Berson. Photo: Supplied
DURBAN - International food services business, Bid Corporation (Bidcorp) is hunting for two to three acquisitions a year as it expands its footprint.

Chief executive Bernard Berson said the benefits of these investments would be evident in the medium-term as they bolstered systems and infrastructure and extracted synergies and efficiencies.

“We plan to make two or three acquisitions a year and despite our appetite for acquisitions, we remain disciplined in our approach to accessing the ‘right’ opportunities,” Berson said.

The group said yesterday that for the year to end June total investments amounted to R965.6million, with new geography expansion to include Pier 7, a small food-service business based in Germany and a niche Horeca (the term is a syllabic abbreviation of the words hotel/restaurant/café) business in Portugal, which had been integrated under Bidfood Iberia.

The group has made bolt-on acquisitions in Australia, the Netherlands, Spain, New Zealand, South Africa, China and Turkey. It operates in 37 countries and it has recently gained footprints in countries such as Portugal, Germany and Malaysia.

Bidcorp’s net revenue rose by 8percent to R119.4billion, up from R110.5bn. In constant currencies, revenue was up 8.5 percent.

Group trading profit rose 8.7percent to R6bn, up from R5.5bn and the trading margin was maintained at 5percent.

Headline earnings per share from continuing operations increased by 9.1percent to 1286.3cents a share.

Cash generated by operations before working capital absorption was R6.9bn, an increase of 10.6percent compared to last year.

The group said there had been greater utilisation of working capital in the year, reflecting higher activity levels, tighter supplier terms, some excess stocking due to the listeria crisis in South Africa and impacts from recent acquisitions.

 Free cash flow, excluding dividends paid, was positive at R1bn after investment activities absorbed R3.1bn.

Bidcorp declared a final cash dividend of 280c a share, up by 12percent, taking the total dividend to 560c.

Well capitalised

Berson said Bidcorp remained well capitalised, with trading profit interest cover at 25.8 times compared to last year’s 25.4 times.

“We retain adequate headroom for further organic and acquisitive growth, while remaining conscious of the need to balance debt capacity and shareholder returns. 

Our financial position remains strong. Total fixed assets have grown, reflecting replacement and expansionary capital expenditure,” he said.

Overall Berson said most businesses improved their performance in home currencies against a backdrop of low food inflation and moderate economic growth.

“Europe recorded stand-out results and UK Foodservice did well. Australia finished strongly, while New Zealand again delivered a great performance. Asia was impacted by the world dairy crisis, supplier dislocation and volatile currencies. South Africa performed well in tough economic conditions,” he said. He added that the listeria outbreak in several parts of the world heightened food safety risks.

South Africa’s listeriosis crisis had material effects on its Crown Food Group and to a lesser extent on Bidfood, Berson said.

Bidcorp share price closed 2.19 percent lower on the JSE at R290 yesterday.