Bidvest increases interim trading profit
“We are pleased with this six-month result, especially the increased trading profit, improved gross and operating margins as well as excellent cash generation,” chief executive Lindsay Ralphs said yesterday.
The group had made a timeous R10bn acquisition in PHS, the number one hygiene provider in the UK and in Spain, said Ralphs.
Bidvest said that it saw the outbreak of the coronavirus as an opportunity to expand its hygiene-services business globally.
“Even though the coronavirus has been devastating in many cases, it has highlighted the need for better hygiene across the world,” Ralphs said.
“You could look for us to expand internationally into hygiene services.”
He said the firm was not expecting any problems with inventory in the short term on the back of the impact of the virus on China’s manufacturing industry, but Bidvest was putting contingency plans in place, Ralphs said.
In the six months to December 31 cash generated was up 32.7percent to R5.5bn. Normalised headline earnings per share increased by 24.8percent to 610.9 cents. The interim dividend was held at 282c per share.
The business-to-business trading, distribution and services group’s trading profit, which was enhanced by the consolidation of Adcock Ingram, was off revenue growth of 9.2percent..
“Our Services, Automotive, Financial Services divisions and Properties delivered a pleasing performance. Branded products delivered a resilient result, while Freight and Commercial Products fell short of expectation,” he said. Bidvest’s services businesses, comprising the Services, Freight and Financial Services divisions, grew trading profit 6.5percent.
A good result was delivered by the South African businesses.
The Freight division handled increased bulk and liquid commodity volumes, but this was offset by lower agricultural exports, specifically yellow maize, and reduced cargo volumes.
Bidvest closed 0.72 percent higher at R181.29 on the JSE yesterday. Additional reporting by Bloomberg