Bidvest results ‘satisfactory’
The Bidvest Group says it has delivered a satisfactory result in the six months to December 2016 against a backdrop of “significant and continuing market challenges”. Five of its seven core divisions maintained, or increased, margins through better efficiencies.
The Bidvest Group says it has delivered a satisfactory result in the six months to December 2016 against a backdrop of “significant and continuing market challenges”.
The diversified industrial company, which spun off its foodservice business as Bidcorp in May 2016, said five of its seven core divisions had maintained or increased margins through better efficiencies and cost control. Group revenue rose 4.1% to R36bn and the gross profit margin was stable.
But Mark Hodgson, an analyst at Avior Capital Markets, said on Monday it was an “indifferent” performance by Bidvest that delivered marginally below real earnings growth. “A strong associate earnings performance offset a disappointing Bidvest Namibia contribution.”
Associate companies Adcock Ingram and Comair saw strong profit gains. Bidvest Namibia, though, was hit by a fall in fishing quotas and poor economic conditions in that country.
However, Bidvest said domestic operations had delivered a good trading profit, up 6.2%, despite revenue rising only 3.6%. Better demand drove chrome and manganese exports, while maize imports helped the bottom line after the drought in SA.
“We’ve seen a lot of activity in our mining sector,” said CEO Lindsay Ralphs. But double-digit declines in new vehicle sales and poor levels of spending on infrastructure in SA hit its automotive and electrical wholesale operations, he said.
Group headline earnings per share rose 4.4% as operating cash flows shot up 30%. This was especially helped by the commercial products division, which traded in global brands such as Yamaha and Nissan and well-known brands for protective packaging, industrial cookware and adhesive tapes.
The Brandcorp acquisition, which had added industrial and consumer products to the commercial products division, was finalised in October 2016. Meanwhile, several smaller acquisitions had been bedded down.