Bidvest delivers ‘hat-trick’ of 20% growth for 3 years in succession, creates 6000 jobs

Bidvest CEO Mpumi Madisa. File Picture: Masi Losi

Bidvest CEO Mpumi Madisa. File Picture: Masi Losi

Published Oct 30, 2023


Bidvest delivered a “hat-trick“ of 20% growth for three years in succession and created 6 000 jobs in 2023, chief executive Mpumi Madisa said in the group’s 2023 annual report, posted last week.

Bidvest, valued at R88.5 billion, is a leading South African services, trading and distribution group.

Madisa said that for three years in succession, Bidvest had delivered growth in headline earnings per share in excess of 20%, which, when considering the current market environment, was an exemplary achievement. Over the past year, each of the group’s seven divisions delivered double-digit percentage growth in trading profit.

Six of the seven divisions generated a ROFE (return on funds employed) in excess of 30%, again demonstrating the group’s focus on maximising shareholder returns, she said.

“Our strategic focus on scale, innovation and geographic expansion, together with an obsession for achieving real growth and increasing market share in key operating areas, have again demonstrated the robustness of the Bidvest Group.”

Further, the group created more than 6 000 new jobs during the period under review, bringing its total employee complement to just under 130 000 people.

In South Africa, the energy and infrastructure crisis had not improved and remained Bidvest’s single biggest risk, Madisa said.

To manage this risk, Bidvest had internally reduced its emissions and water usage by 31.8% and 38.3%, respectively. Across group companies, approximately 2.7% of electricity used was now coming from “green“ sources and it had generated 3.2GwH of power from its own solar systems.

“Other material risks include increasing inflation and input costs, as well as impaired infrastructure in SA, which is debilitating many sectors, particularly transport and logistics. Globally, consumer spending is constrained and is expected to deepen as concerns continue with regard to economic growth in key trading markets.”

She said South Africa found itself at an interesting juncture, with economic growth extremely low, exacerbated by the power interruptions, leading to low levels of investor confidence.

Bidvest was standing with many other corporates, and with their respective chief executives, voicing commitment and support to remove certain obstacles hindering growth. The ultimate aim was to chart a critical path to recovery, foster societal and business confidence, and provide support to the government in effectively implementing selected interventions.

Meanwhile, chairperson Bonang Mohale said he was more optimistic than ever that the Bidvest strategy remained firmly intact and on course to ensure competitive advantage and create stakeholder value for many years to come.

“We continue to encourage a performance-driven business model that continuously seeks scale and growth, grounded on product, service and geographic diversification.

“The portfolio is aligned to our financial strength, ultimately leading to an ability to ensure responsible stewardship. This strategy is working. The 2023 result demonstrated the group’s operating and leadership strength, together with robust liquidity,” Mohale said.

In its annual results, the group had delivered a 25% increase in headline earnings per share to 1 794.8 cents, and a total dividend per share of 876 cents, up 18%.

Mark Steyn, the chief financial officer, said: “ The Bidvest business model continues to demonstrate its resilience, considering the pressures from a number of the broader macros.

“The ability of our decentralised businesses to pivot and reprioritise growth opportunities has been key to this good result. We continue to focus on sectors showing structural growth to lessen the impact of the weak GDP (gross domestic product) environment. Margin management and expense control will remain top of mind over the next six months.”