Strict cost controls helped Bidvest to hike its profit

Bidvest [JSE: BVT], which does business in a number of sectors including freight, services, office supplies and banking, has hiked its headline profit for the year to end-June by 10% to R4.6 billlion.

This is despite flat group revenue, which remained virtually unchanged at R77.2 billion. A strong focus on costs helped to boost its gross profit margin from 28.9% to 29.8%.

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Last month, Bidvest hiked its interest in the pharmaceutical company Adcock Ingram to 50.1%. Adcock produces brands like Panado, Corenza and Bio-Plus. In the past year, Adcock achieved “strong profitability gains”, Bidvest said.

Bidvest also holds a 27% stake in Comair, and will benefit from SAA’s undertaking earlier this year to pay Comair more than R1 billion to settle a claim over SAA's anticompetitive conduct between 1999 and 2005.

Bidvest’s services division – which includes the UK and Irish outsourcing group Noonan, Protea Coin, BidAir Services and Bidvest Lounges – saw its trading profit grow by 12.5% to R2.2 billion, but its freight division’s trading profit for the year rose by only 3.8% to R1.4 billion.

Bidvest Bank had a “reasonable year”, with Bidvest’s financial services unit reporting trading profit for the year was 7.5% down at R584.5 million.

A 5.6% increase in final dividend (318c) was declared.