DURBAN – Bid Corporation's (Bidcorp's) share price rose more than 7 percent after the international food service business said it had seen the market rebound in June, with overall activity levels returning to 85 to 90 percent of pre-Covid-19 levels.
Bidcorp chief executive Bernard Berson said their current focus was to anticipate the likely “new normal” that would exist post the short-term effects of the Covid-19 crisis and to scale their activities accordingly.
“Overall activity levels have returned to 85 to 90 percent of pre-Covid-19 levels, with several businesses now achieving growth higher than the comparative period a year ago. There are, however, a few markets which are still lagging, those being the UK and some in emerging markets,” Berson said.
Its headline earnings per share from continuing operations, post the introduction of IFRS 16 leases, declined by 48.6 percent to 741.3 cents a share, down from last year’s 1 443.6c and on a like-for-like basis excluding the impacts of IFRS 16, headline earnings per share decreased by 50 percent.
Bidcorp share price climbed to an intraday high of R270.82 a share, up from Tuesday’s closing price of R249.68.
In the results, revenue from continuing operations declined by 6.3 percent to R121.1 billion and trading profit fell by 37.6 percent to R4.2bn, while basic earnings per share from continuing operations decreased by 68.1 percent to 463.5c.
Bidcorp did not declare a final dividend during the year.
The group saw the full impact of the Covid-19 economic crisis becoming evident from late March onwards.
It said group sales for the last quarter of the financial year declined by 27.6 percent compared to a year earlier.
“In the week to end April 5, sales reached a low of 37 percent compared to the same week last year and recovered to 71 percent in the last week to end June compared to last year.
"This improving trend has continued to date and is currently at approximately 90 percent,” the group said.
Berson added the performance across their business up until February remained pleasing and in line with expectations.
However, with the onset of Covid-19 in each operating geography, demand in the discretionary spend sectors, particularly across hotels, restaurants, pubs, leisure and travel-related segments initially plummeted as lockdowns and restrictions were implemented, but towards the beginning of June started improving, from a very low base.
Looking ahead, the group said its businesses were preparing to ride out the next phase of the economic recovery, mindful that activity levels would fluctuate as further waves of the Covid-19 pandemic arose.
“We believe there will not be any major long-term fundamental shift in consumer behaviour away from eating-out-of-home and early anecdotal evidence supports this.
"No significant acquisition opportunities in the food service space have yet become evident and we believe it is premature to be exploring these in the current environment,” Berson said.