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When the heavyweight Bidvest performs well the market capitalisation of South Africa’s support services sector – one of the most diverse on the exchange – jumps a few billion rand.
Such was the case this year, with Bidvest one of the JSE performers increasing its price from 9 905c in February 2009 to 13 220c/share this February.
The 33% increase in the share price of this large group, which contributes more than 80% to the market capitalisation of this sector, added a substantial figure to the higher market cap that increased from R47.9bn to R64.7bn.
That represents growth of 34.1%, while accounting for the R390m of CIC (previously listed on the AltX before moving to the JSE) being removed from the equation.
A firm favourite
Bidvest has grown to one of SA’s most popular companies since its listing in 1954.
With its market cap R46bn as at end-February it’s in the league of other well-known companies such as ArcelorMittal (R47bn), Harmony (R31bn), Lonmin (R42bn), Remgro (R43bn), Shoprite (R39bn), Tiger Brands (R33bn) and Rand Merchant Bank Holdings (R36bn).
Over the past six years Bidvest experienced superior growth and its attributable profit more or less kept up with its turnover growth.
That signifies there was no unbridled growth that could have exposed its shareholders to great risk.
Since its 2004 financial year, when its turnover was R51.3bn and attributable profit was R1.5bn, its figures improved thus: turnover growth of 22% and profit growth of 28% in financial year 2005, turnover growth of 23% and profit growth of 22% in 2006, turnover growth of 24% and profit growth of 13% in 2007 and turnover growth of 15% and profit growth of 20% in its 2008 financial year.
In its latest financial year (to end-June 2009) – a very difficult year for the industry – its turnover still grew 2% and attributable profit of R2.8bn was still more than in any financial year up to 2007.
Nobody can complain about the consistency of its performance: over the past six years its operating profit margin varied between 4.39% and 4.84% (the latter figure from its 2008 record year).
Some other performers in the sector are also worth a look.
To name but a few: the share price of Metrofile rose from 83c to 140c (+69%), Mixtel was 79% up at 102c and ELB Group 47% higher at 1 150c.
Only Excell, Primeserv and Austro closed the year lower.
Kelly (share price 8.7% up) and Adcorp (+15,6%) survived the recession better than Primeserv, whose share price fell from 40c to 30c.
Those three form the total subsector for business training and recruitment.
In view of the importance of staff training and placement in SA and the commitment of all three to keep developing new products and services, the fortunes of those companies will probably improve again when the economy recovers and more job opportunities arise.
All three are therefore worth considering for the long term.
The newbies
Last year we recommended investors take a look at the two newcomers in this sector: MiX Telematics and Austro (both listed in 2007), since both had superior turnover and profit growth.
Mixtel prospered (as noted above) but Austro lost value.
Over the past year both suffered lower turnover due to the economic climate but still made a profit.
A rejuvenated economy could give them a boost.
Back to CIC: last year (when it was part of the AltX) its share price was around 74c and its market cap R186m.
Its share price of 155c and market cap of R390m at end-February this year – when it had already been part of the support services sector for some time – represent improvement of more than 100% compared with the previous year.
It might be worthwhile to check out CIC’s latest performance for the financial year to end-February this year.
Results will be published soon.
Judging by its half-yearly performance to end-August 2009 showing growth once again, CIC is likely to continue on that path.
- Finweek
Such was the case this year, with Bidvest one of the JSE performers increasing its price from 9 905c in February 2009 to 13 220c/share this February.
The 33% increase in the share price of this large group, which contributes more than 80% to the market capitalisation of this sector, added a substantial figure to the higher market cap that increased from R47.9bn to R64.7bn.
That represents growth of 34.1%, while accounting for the R390m of CIC (previously listed on the AltX before moving to the JSE) being removed from the equation.
A firm favourite
Bidvest has grown to one of SA’s most popular companies since its listing in 1954.
With its market cap R46bn as at end-February it’s in the league of other well-known companies such as ArcelorMittal (R47bn), Harmony (R31bn), Lonmin (R42bn), Remgro (R43bn), Shoprite (R39bn), Tiger Brands (R33bn) and Rand Merchant Bank Holdings (R36bn).
Over the past six years Bidvest experienced superior growth and its attributable profit more or less kept up with its turnover growth.
That signifies there was no unbridled growth that could have exposed its shareholders to great risk.
Since its 2004 financial year, when its turnover was R51.3bn and attributable profit was R1.5bn, its figures improved thus: turnover growth of 22% and profit growth of 28% in financial year 2005, turnover growth of 23% and profit growth of 22% in 2006, turnover growth of 24% and profit growth of 13% in 2007 and turnover growth of 15% and profit growth of 20% in its 2008 financial year.
In its latest financial year (to end-June 2009) – a very difficult year for the industry – its turnover still grew 2% and attributable profit of R2.8bn was still more than in any financial year up to 2007.
Nobody can complain about the consistency of its performance: over the past six years its operating profit margin varied between 4.39% and 4.84% (the latter figure from its 2008 record year).
Some other performers in the sector are also worth a look.
To name but a few: the share price of Metrofile rose from 83c to 140c (+69%), Mixtel was 79% up at 102c and ELB Group 47% higher at 1 150c.
Only Excell, Primeserv and Austro closed the year lower.
Kelly (share price 8.7% up) and Adcorp (+15,6%) survived the recession better than Primeserv, whose share price fell from 40c to 30c.
Those three form the total subsector for business training and recruitment.
In view of the importance of staff training and placement in SA and the commitment of all three to keep developing new products and services, the fortunes of those companies will probably improve again when the economy recovers and more job opportunities arise.
All three are therefore worth considering for the long term.
The newbies
Last year we recommended investors take a look at the two newcomers in this sector: MiX Telematics and Austro (both listed in 2007), since both had superior turnover and profit growth.
Mixtel prospered (as noted above) but Austro lost value.
Over the past year both suffered lower turnover due to the economic climate but still made a profit.
A rejuvenated economy could give them a boost.
Back to CIC: last year (when it was part of the AltX) its share price was around 74c and its market cap R186m.
Its share price of 155c and market cap of R390m at end-February this year – when it had already been part of the support services sector for some time – represent improvement of more than 100% compared with the previous year.
It might be worthwhile to check out CIC’s latest performance for the financial year to end-February this year.
Results will be published soon.
Judging by its half-yearly performance to end-August 2009 showing growth once again, CIC is likely to continue on that path.
- Finweek
