“Excellent trading results” in the food, electrical, industrial, paperplus, services and rental and products divisions of JSE-listed Bidvest, pushed the group’s headline earnings per share (HEPS) up by 8.6% to R18.82 for the year ended June 30, from R17.34 in 2014.

Basic earnings a share rose 25% to R18.27.

The group’s turnover grew by 11.6% to R204.9-billion, owing to Bidvest Europe and Bidvest UK reflecting organic growth, as well as some assistance from currency effects on translation and acquisitions.

Speaking at a presentation of the group’s results, in Sandton, Bidvest South Africa CE Lindsay Ralphs said the electrical division was one of the “real highlights of the year” and proved of particular importance to the company’s earnings, as a result of the ongoing electricity challenges.

The division’s trading profit increased by 15.4% to R305-million, despite a poor operating environment, characterised by a depressed construction sector and lower commodities prices.

“[The division] has achieved these fantastic results by gaining market share and the outlook for this business [is looking good]. It was an extremely difficult year [paired with] the volatility of the rand, which made doing business challenging,” he said.

Net finance charges were 6.8% higher at R1.1-billion, principally a function of financing acquisitions that were not fully included, or included at all, in the prior year. These included Mvelaserve, PCL 24/7 Transport, Gruppo DAC and Adcock Ingram Holdings.

Net finance costs were further impacted by the use of working capital through the year and a rising interest rate environment in South Africa.  Associate earnings were significantly higher as a result of the full-year inclusion of Adcock, which became an associate in March.

However, the impact of the Adcock acquisition had been a negative 2.7% on HEPS.

Headline earnings increased by 11.3% to R6.1-billion, with profit for the year up 27.3% to R6.2-billion. Net headline earnings adjustments in the year totaled R177.2-million, primarily comprising a R305-million fair value impairment of the investment in associates offset by profit on the disposal of property, plant and equipment of R151.4-million.

Meanwhile, the group highlighted that Bidvest Namibia recorded a further decline in trading profit, as the lower fishing and food distribution performances outweighed the improved results of the industrial and commercial businesses. 

Ralphs noted that the group continued to face headwinds in the business, which recorded an 18.9% decline in profit, from R493-million in 2014, to R400-million at the end of June.

To mitigate the challenges, the group would look to restructure its fishing division by investing into different types of vessels. He highlighted that there was possibly a lack of understanding of how Bidvest operated and noted that the company would meet with Namibia’s Fisheries and Marine Resource Minister Bernard Esau to discuss the way forward.