Bidvest lifts profit to R3.6bn

Johannesburg – Services group The Bidvest Group [JSE:BVT] posted a R3.6bn trading profit for the half year ended December 31 2012 – an 8.3% increase on the previous comparable half-year’s profit.

Normalised headline earnings per share (Heps)‚ excluding the abnormal profit of R399.1m on the partial sale of the investment in Mumbai International Airport Private Limited in the comparative period‚ increased by 18.2% to 725.1 cents and normalised basic earnings per share (EPS) increased by 24.5% to 724.4 cents.

HEPS declined by 2.3% to 725.1 cents while EPS increased by 1.9% to 724.4 cents.

The earnings were achieved on the back of an 11.9% increase in revenue to R75.4bn.

The group declared an interim dividend of 324 cents per share‚ representing an increase of 15.7%.

Commenting on the results‚ Bidvest said: “The group achieved reasonable overall trading results for the half-year ended December 31 2012 despite challenging trading conditions in much geography. Management is to be commended on their focus and commitment‚ though these efforts are not always reflected in the financial performance.”

In South Africa‚ lower demand in many industries combined with customers drive for cheaper cost of services‚ is driving increased competition‚ some of which at sub economic rates‚ according to the group.

Despite low inflation‚ cost pressures‚ particularly those of administered prices were increasing‚ it stated.

“The significant labour unrest in the mining and transport sectors negatively impacted many operations. However‚ the overall trading performance was good with excellent results from a number of divisions. Demand in the construction industry and discretionary consumer spending remained weak. Asia Pacific continues to deliver solid results‚ but the performance of Angliss Singapore lags those of the other businesses‚” the group bemoaned.

Bidvest Europe’s trading results reflect resilient performances from most operations other than Deli XL Netherlands‚ which recorded a small loss. Bidvest Namibia recorded a 20.7% decline in trading profit‚ primarily due to a decline in profits from fishing operations following a 25% reduction in quota allocation.

Bidvest currently derives 27% of trading profit from its businesses outside of Africa. On translation‚ currency fluctuations impact the rand results. In the period‚ the average rand exchange rate weakened against some of the major currencies in which the group trades‚ in particular against the Australian dollar and sterling.

Looking ahead‚ Bidvest said current economic environments within which the group operated its global business remained volatile and challenging. Growth rates remained subdued with little evidence of sustained recovery.

“Management remains focused on their collective effort in delivering stakeholder value despite these environmental factors. We remain true to our tried and tested decentralised and entrepreneurial business model and significant effort has been directed throughout the group to ensure the Bidvest culture is reinforced.

“In South Africa trading conditions are anticipated to remain lacklustre. Our divisional teams remain extremely focused on delivering organic growth whilst seeking out acquisitive opportunities to complement our existing service offering. Further progress in developing the Africa strategy in our products related businesses is anticipated.

“In Europe‚ further opportunities to add new product ranges and expand local footprints both via organic and acquisitive growth remain a focus area across all businesses. In the Asia Pacific region‚ management focus is directed to finding innovative value adding solutions for customers across all categories of products to enable continued growth in our wholesale model. In the developing markets‚ further consolidation opportunities exist which are being aggressively pursued. Management is confident of further organic and acquisitive growth.

“Management focus remains on maintaining and improving customer service and ongoing cost control‚ which combined with good working capital management will assist in delivering expected returns on funds employed. Effort is being directed at those operations where performance is below our own expectations. Our financial position remains sound and the group has ample capacity to fund growth. We continue to see opportunities which combined with the acquisitive expansion of our footprint and service offering‚ bodes well for the group going forward‚” the group said.