Bid­corp re­sults ‘fairly pos­i­tive’

• Com­pany af­firms first-quar­ter trade in core food-ser­vice busi­nesses de­spite cur­rency volatil­ity and dairy cri­sis

Business Day - - FRONT PAGE - Michelle Gumede Re­tail Writer gume­dem@busi­nesslive.co.za

Bid­corp said on Mon­day that first-quar­ter trad­ing in its core food-ser­vice busi­nesses had been “rea­son­ably pos­i­tive” but warned that cur­rency volatil­ity con­tin­ued to af­fect re­sults.

Bid­corp said on Mon­day that first-quar­ter trad­ing in its core food-ser­vice busi­nesses had been “rea­son­ably pos­i­tive” but warned that cur­rency volatil­ity con­tin­ued to af­fect re­sults.

“Our per­for­mance [for the first quar­ter of the 2018 fi­nan­cial year] has been achieved against a back­drop of in­creas­ing in­fla­tion in cer­tain cat­e­gories of prod­ucts, par­tic­u­larly dairy. Wage-cost pres­sure is ev­i­dent in a num­ber of economies as un­em­ploy­ment lev­els fall,” the com­pany said.

The food-ser­vices group op­er­ates in the UK, Eu­rope, Aus­trala­sia and a num­ber of emerg­ing mar­kets in­clud­ing SA.

“Our strate­gic plan to re­bal­ance cus­tomer port­fo­lios by fo­cus­ing on the cor­rect seg­ments of the mar­kets and on adding value to our cus­tomer of­fer­ing through in­no­va­tion and ser­vice de­liv­ery is on track.” Bid­corp said its organic growth and bolt-on ac­qui­si­tions strat­egy re­mained steady in all its op­er­a­tions. Dur­ing the first quar­ter, Bid­corp spent about R608m in ac­quir­ing busi­nesses in coun­tries such as Aus­tria, Por­tu­gal and Spain.

Bid­corp’s food-ser­vices busi­ness in the UK per­formed well and it would fur­ther in­vest in the busi­ness to in­crease ca­pac­ity in a bid to cap­ture an­tic­i­pated growth op­por­tu­ni­ties, it said.

In Eu­rope, Bid­corp said Eastern Eu­rope re­mained par­tic­u­larly buoy­ant in terms of eco­nomic growth. Western and Cen­tral Eu­rope were see­ing growth at lower rates than Eastern Eu­rope.

“Fur­ther ex­pan­sion into the Euro­pean re­gion, both in terms of in-coun­try bolt-on ac­qui­si­tions and strate­gic en­try into new ge­ogra­phies re­mains pos­si­ble, as we are not rep­re­sented or un­der­rep­re­sented in many coun­tries,” Bid­corp said.

It said SA de­liv­ered solid re­sults in ex­tremely tough op­er­at­ing con­di­tions, low GDP growth and neg­a­tive con­sumer sen­ti­ment.

Eq­uity an­a­lyst at Len­tus As­set Man­age­ment Nic Nor­man-Smith said that the South African en­vi­ron­ment re­mained un­der pres­sure — as was to be ex­pected — due to the weak un­der­ly­ing econ­omy and neg­a­tive con­sumer sen­ti­ment.

“The world and our lo­cal mar­kets are gen­er­ally un­der pres­sure to­day,” he said.

Asian mar­kets ex­pe­ri­enced mixed out­comes. The Hong Kong busi­ness’s per­for­mance was lethar­gic due to cost in­ef­fi­cien­cies caused by du­pli­cate ware­hous­ing costs de­spite the move to a new fa­cil­ity in June. But in main­land China strong growth per­sisted, with a fo­cus on sell­ing branded prod­ucts to western-style food out­lets.

“The re­sults are par­tic­u­larly good in the first quar­ter due to the ef­fects of the ‘dairy’ cri­sis cur­rently af­fect­ing many parts of the world,” Nor­man-Smith said.

Graphic: DOROTHY KGOSI Source: IRESS and STATS SA

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