Bidvest dividend for 2021 financial year up 113 percent on strong growth in divisions
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Bidvest Group is hoping for another good financial year after it lifted the total dividend for the year to June 30 by 113 percent to 600 cents, chief executive Mpumi Madisa said on Monday.
The group’s Services, Automotive, Commercial Products and Branded Products divisions delivered their best-ever performances, and headline earnings a share (heps) was up 114 percent to 1 183.3 cents. Trading profit rose 48 percent to R8 billion. Normalised Heps was up 26 percent to 1 292 cents.
Madisa said in a telephone interview that there were some factors which could boost prospects in the new financial year, including benefiting from the first full 12 months of operations of the new LPG (liquid petroleum gas) facility in Richards Bay, and the group would also benefit from the first full 12 months of the Noonan acquisitions in the UK.
Overall trading of the group during July and August had been “okay”, group facilities were not materially impacted by the rioting and looting in July, and other opportunities for organic growth were being pursued.
Mpumi said while there were acquisition opportunities, Bidvest only acquired businesses in transactions that would benefit both parties, and businesses that could integrate well into the group.
In the past year Bidvest advanced its strategy of carefully considered geographic diversification, with two sizeable and a few smaller bolt-on acquisitions in the UK.
Noonan acquired the Axis Group, a UK-based security and cleaning services provider in early February. Later, Noonan acquired Cordant Group, a leading cleaning and security company in the UK, for an enterprise value of 41.5m pounds.
Other bolt-on acquisitions included four offshore transactions with the combined value of 17.5m pounds to augment existing facilities management and hygiene offerings; and in South Africa, Compendium acquired Genesis Insurance Brokers and Adcock acquired a product portfolio from Aspen, and the remaining 51 percent in the Novatis Ophthalmic joint venture.
The LPG project was commissioned on October 22, 2020 and the volumes handled to date had exceeded expectations, with the facility helping to supply a gas-hungry local market due to oil refineries producing much less LPG, said Madisa.
Madisa said the demand for the majority of Bidvest products and services started normalising toward the end of the financial year, and in many instances, demand had exceeded expectations.
Both the Services and Commercial products division were impacted, in different ways, by mainly corporate office workers working from home through the Covid-19 pandemic.
Madisa said that while industrial office workers, for instance, were largely working in their offices, some 85 percent of South Africa’s corporate office workforce was working from home.
She said that while it was unlikely that 100 percent of these workers would ever return to the office due to global hybrid working trends, it was certainly likely to be more than the current 15 percent.
She said global supply chains remained “hugely disrupted”, sea and air freight costs had increased dramatically, and container volumes through South African ports were at a low level.
In the past year the group’s bulk freight volumes had remained strong due to a record local agricultural export season and high commodity prices, she said.
In the past year, group revenue grew 15.4 percent to R88.3bn. A full year of results from PHS, which was acquired in May 2020, and the acquisitions concluded by Noonan during the year, augmented the revenue performance. Expenses increased by only 3.2 percent, on a like-for-like basis.
Travel and related services, including hospitality, continued to operate at low levels.
The portfolio streamlining that started after the unbundling of the food services businesses was largely complete.
Bidvest shares closed 0.21 percent higher at R198.73 on the JSE on Monday.
BUSINESS REPORT ONLINE