DURBAN – Bidvest credited its diverse portfolio for its strong performance as it reported an 8.2 percent increase in trading profit for the year to end June.
Trading profit grew to R6.5 billion, up from R6bn compared to last year, with a trading margin of 8.5 percent.
“The value of a diversified portfolio and the quality of the underlying businesses continues to manifest in the performance of the South African trading operations. Five of Bidvest’s seven divisions, as well as Bidvest Properties, delivered growth in trading profit. Exceptional cost and capital disciplines, as well as good cash generation, were highlights against a volatile trading backdrop,” the group said.
Bidvest’s divisions include services, freight, commercial products, office and print, financial services, automotive and electrical.
Group revenue increased by 8.4 percent to R77bn, up from R71bn. The group attributed R5.2bn of the increase to the acquired international services businesses.
During the period Bidvest acquired 100 percent of the share capital and voting rights of Noonan Topco (UK), holding company of the Noonan Services Group for €175m (R2.98bn), with effect from September 1.
Noonan is based and operates throughout the Republic of Ireland and in the UK. Bidvest also acquired 100 percent of Ultimate Security Services, a building security company operating primarily in London.
Group's strategy
The group said yesterday that sufficient headroom existed to advance the group’s strategy of growth in its existing markets, as well as continuing to acquire divisional bolt-on businesses, and to pursue larger, value adding opportunities locally. “Internationally, we target expansion in the chosen niche areas of services and commercial products,” the group said.
Chief executive Lindsay Ralphs said several opportunities were assessed during the year, some of which were still being considered.
“We remain steadfast in our disciplines when evaluating and responding to opportunities. Buying into the wrong business and management team or the right business at the wrong price is not in the best interest of our stakeholders,” Ralphs said.
In the results, headline earnings per share (Heps) increased by 11.1 percent to 1 231.6 cents a share, up from 1 108.2c.
Normalised Heps increased by 12.5 percent to 1 254.9c. The group said management uses the normalised Heps to assess the underlying business performance. It declared a final dividend of 301c, bringing the total dividend for the year to 556c, up by 13.2 percent.
Despite reporting an increase in earnings, the group was concerned about weak economic growth and consumer spend, as well as business and political uncertainty in South Africa.
Ralphs said the group was actively advancing on various infrastructural development projects, specifically in liquid gas storage.