Food on an el­e­gant plate

But will Joffe sell?

Finweek English Edition - - INSIGHT -

BIDS FOR BIDVEST’S Food­ser­vice busi­ness has the mar­ket and share­hold­ers ex­cited. At R163/share the price is the high­est it’s been for more than three years. But if Bidvest sells, do share­hold­ers know what it will do to the struc­ture of the group? Es­sen­tially, it will re­move the po­ten­tial high growth core of the busi­ness, leav­ing Bidvest look­ing like a very dif­fer­ent an­i­mal in the fu­ture.

Group CE Brian Joffe couldn’t be con­tacted; he’s over­seas on hol­i­day. Skip­ping out of the coun­try for a while might have been a good strat­egy as ques­tions fly. Bidvest is also un­der a cau­tion­ary and in a closed pe­riod, so it’s un­likely he could have had much to say.

At the in­terim pe­riod Bidvest Food­ser­vice saw rev­enue and trad­ing profit de­cline, some­thing Joffe put down to the ear­lier ex­treme weather in Europe and Bri­tain. “When the weather is bad, peo­ple don’t go out to restau­rants – you can’t sell ice cream,” he told us then. And in­deed, when Premier Divi­sion foot­ball matches in Eng­land are can­celled due to rain or snow, the weather must be bad.

But Joffe was up­beat about prospects for Food­ser­vice in the sec­ond half of its fi­nan­cial year, par­tic­u­larly in the high growth mar­kets in Asia Pa­cific, where he’s built up an at­trac­tive chain of food as­sets. It’s hard to be­lieve he’d con­sider sell­ing what’s be­come the core of the busi­ness but he’s clearly tak­ing the “un­so­licited bids” se­ri­ously, set­ting up a sub-com­mit­tee to con­sider if the of­fers would pro­vide value to share­hold­ers.

Even af­ter the de­cline at its in­terim, Food­ser­vice pro­vided the big­gest num­ber in the ac­counts. Rev­enue came in at R29,2bn and trad­ing profit at R956,2m. Tak­ing that out will leave a hole in the fi­nan­cials – but even more im­por­tantly in prospects for


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