Bidvest has $1bn war chest for acquisitions

BIDVEST group, buoyed by a war chest of $1 billion (R12.9bn), said yesterday it was on the hunt for local and international acquisitions as the company seeks organic and acquisitive growth.

Chief executive Lindsay Ralphs said the company was continuously pursuing select international and local opportunities to complement its existing offerings.

“We have ample headroom to accommodate expansion opportunities. We’d be able to raise $1bn should we need it, or about R14bn to R15bn, and that has been confirmed by a lot of the bankers,” Ralphs said.

The company’s expansion plans come a year after it spun off its food service division, Bidcorp, in a $5bn listing on the JSE.

In October, Bidvest acquired Brandcorp, a distributor of industrial and consumer products.

The group said the acquisition of Brandcorp contributed R535 million to its revenue and R71m to its operating profit for the period.

The food service unit accounted for 60 percent of Bidvest’s sales in the six months to the end of December 2015.

The group yesterday reported a 4.4 percent rise in halfyear profit.

Earnings up Headline earnings per share increased to 510.3 cents for the six months to December, from 489c in the comparative period.

Revenue rose 4.1 percent to R36bn, and the company’s trading profit increased by 3.2 percent to R2.8bn.

Cash generated from operations shot up 30 percent to R1.8bn.

Bidvest declared an interim dividend of 227c per share.

The company’s seven businesses had mixed results for the period.

The services unit went up 5.2 percent to R6.4bn, accounting for 27 percent of the company’s trading profit.

The freight business’s revenue decreased by 18.6 percent to R2.4bn, while the automotive division reported a 1.8 percent increase in revenue to R12.3bn.

The office and print business’s revenue declined by 1.4 percent to R5bn.

The financial services unit’s revenue surged by 32.7 percent to R2bn, while the commercial business’s revenue increased by 24.8 percent to R3.7bn.

The company’s electrical business recorded a marginal increase of 1.9 percent to R2.7bn.

However, the profits of its Namibian business nosedived by 80 percent to R23m, accounting for just 1 percent of the group’s total trading profit for the period.

Bidvest said this was because of a reduction in fishing quotas. The group owns 52 percent of Bidvest Namibia.

Bidvest shares dropped 1.02 percent on the JSE to close at R163.31.