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Bidvest profit up amid food services growth

Johannesburg - Bidvest Group [JSE:BVT], South Africa’s second-biggest company by sales, said it sees opportunities to expand despite unpredictable economic conditions and is exploring new ways to help accelerate growth in other African countries.

“Across all our businesses, opportunities exist to add new product ranges and expand local footprints, via both organic and acquisitive growth,” the company said on Monday in its earnings statement for the 12 months through June. “Our focus on expanding our exposure to Africa remains.”

Bidvest has interests ranging from car dealerships to catering and pharmaceutical products. The company is seeking to expand outside its home market, where the economy contracted in the second quarter for the first time in more than a year amid power shortages and faltering commodity prices.

The Johannesburg-based company’s earnings per share excluding one-time items climbed 8.6% to R18.82. That beat an R18.63 average of 13 analysts’ estimates compiled by Bloomberg. Sales gained 12% to R204.9bn.

Trading profit at the food unit, Bidvest’s largest by sales, gained 25% to R4bn. Bidvest South Africa, the second-biggest division, increased trading profit by 4% to R5.2bn. The consumer-products and financial-services businesses both reported profit declines.

“Trading conditions in South Africa are likely to remain tough in a low-growth environment but management sees opportunity in the current market volatility,” CEO Brian Joffe said in the statement. “Certain divisions are being realigned to cater for succession and streamline our service offering.”

Bidvest shares gained 2.1% to R311.32 at 09:13 in Johannesburg. The shares have advanced 2.7% this year, valuing the company at R105bn. That compares with a 1.1% rise on the FTSE/JSE Africa Top 40 Index.

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