Johannesburg - Bidvest CEO and entrepreneur Brian Joffe has delivered an upbeat message to shareholders, saying that South Africans mustn't be mislead by negative press on the state of the world economy.
He said: "The world indeed faces some big challenges, but we cannot allow ourselves to be talked into a depression."
Joffe was speaking to shareholders and the media at Bidvest's annual general meeting in Sandton on Monday morning.
Bidvest is a JSE-listed diversified services group, with businesses across the world.
Joffe went on to say that Bidvest management is seeing opportunities when other people are seeing doom and gloom.
"It is an important time for directors to have ammunition," he said after shareholders approved authority for Bidvest to issue 30m ordinary shares in the group for cash. Bidvest is trading at about 9 600c per share.
The company was recently on the prowl for a signficant equity stake in listed packaging group Nampak, but subsequently retracted this offer following a negative trading update out of the company in October.
Joffe has previously been awarded the Ernst & Young entrepreneur of the year award and is widely credited with being the driving entrepreneurial personality that has seen Bidvest change from an R8m business into a multi-billion rand conglomerate with operations in South Africa, Asia and Europe.
Media has role to play
Joffe went on to say that financial journalists have a significant role to play in fair reporting on global financial events.
He said: "We need to instil a degree of confidence in the market. While it is easy to report on the negative events, if everybody gives momentum to the problem we are going to talk ourselves into a depression."
Joffe confirmed that Bidvest's two main problems areas are its motor retail and UK operations.
In line with its global peers, the South African motor retail sector has been hard hit in recent months with cash-strapped consumers battling to make repayments on their vehicles. Bidvest has large exposure to this sector through its McCarthy (BidAuto) vehicle operations, which it purchased in 2003.
In the UK, Bidvest operates a number of food service sector businesses as well as other smaller service businesses. The food service businesses have required a great deal of consolidation and have felt the negative impact of the country moving into a recessionary environment.
Stock brokerage firm Barnard Jacobs Mellet says that Bidvest offers value. In its daily newsletter to clients, the firm said: "The growth and value proposition of the company remains intact. While trading conditions remain challenging, we continue to regard Bidvest as representing good value on a forward price-earnings multiple of 8.0 times."
Joffe said: "Other than these two sectors, the rest of the business is performing well."
The Bidvest share price was marginally weaker by lunchtime on Monday, having lost 0.2% (15c) to trade at 9 600c.
- Fin24.com