Share

Bidvest eyes London listing of food unit

Cape Town - Bidvest [JSE:BVT] is considering listing its food business on the London stock market to help raise capital, Bidvest Group CFO David Cleasby told Fin24 in a video interview.

"In view of the strategic options available to Bidvest, the issues around the raising of capital in relation to our food service opportunities and the current position in the equity markets, our board's resolved that we are going to investigate and evaluate the potential listing of the food service operations on the London Stock Exchange."

A listing of the food business could be a windfall for shareholders, as food service and catering is one of Bidvest's biggest businesses.

Cleasby said the group's food service has great exposure to many developing parts of the world.

"We are particularly excited about our exposure to the food service markets in Brazil."

The news comes as the group announced an 11% rise in annual profit.

"Bidvest delivered a reasonable increase in headlines earning per share of 11.1% to 17 33.9 cents per share. Basically this came off our trading businesses increasing their trading profit by nearly 17%," he said.

Cleasby said that Bidvest SA in particular did well as it recorded a 17% increase. This was off the back of some tough trading, particularly in the second half of the year, but was also assisted by the acquisitions and investments made, he said.

He said on the international front, the food service businesses did particularly well.

"Prospects for Bidvest remain positive and a lot of the benefits in relation to the significant investments and acquisitions that we have made will be felt into 2015," said Cleasby.

Watch: Bidvest mulls London listing as profits jump



Reuters reported Bidvest's diverse operations from auto showrooms to shipping and office furniture make it South Africa's second-biggest company by sales, but it has long acknowledged the need to separate its food business from the rest of the group because its true value was not fully reflected in its share price.

"Markets are particularly buoyant, money is cheap and there's quite a lot of demand for this particular asset," Bidvest Chief Executive Brian Joffe told reporters in a conference call.

Bidvest, which in 2011 rejected buyout bids for the business on the grounds that they would not have benefited shareholders, said on Monday that a separate listing would unlock value because it is becoming increasingly difficult to fund growth with a South African balance sheet.

Joffe, a renowned dealmaker in South Africa, also said the division is looking at entering the United States through acquisitions but that such deals would put strain on the group's cashflow unless the business can fund itself, according to Reuters.

"The kind of money involved to pursue an acquisition in the United States is quite significant and therefore one has to consider 'how do you continue to fund the business going forward?'," he said.

The food service business, Bidvest's biggest division and one that contributes more than half the company's R183.6bn ($17.20bn) in sales, supplies pubs, restaurants and hotels in Europe, South America and Asia.

The shares were up 2.37% at R287.98 just before market close.

 - Fin24, Reuters

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.0%
Rand - Pound
23.91
-0.0%
Rand - Euro
20.41
+0.1%
Rand - Aus dollar
12.33
+0.1%
Rand - Yen
0.13
-0.0%
Platinum
908.05
+1.2%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders