Diversified industrial group Bidvest would look to acquire struggling businesses during the remainder of the financial year, CEO Brian Joffe said on Monday.

“We continue to believe from our perspective, that a mixture of organic and acquisitive growth is needed in order for us to regain the double-digit growth numbers that we had in the past. So we continue to do that,” he said at an analyst presentation of the company’s financial results for the year ended June.

Joffe said that company was specifically focused on increasing the footprint of its automotive division through acquisitions, as well as the food services division.

“I think there has been quite a lot of rationalisation in the [automotive] industry. I think our position as a group has improved dramatically and there are some opportunities and gaps that we would like to fill. We will spend some money acquiring some businesses in certain areas that we think are opportunistic,” he said.

Joffe further stated that the food services division of the company was “severely” underestimated. He added that the food service division, along with the recently acquired European acquisitions of Newaco and Farutex, it amounted to an earnings before interest, taxes, deprecation and amortisation of around R3-billion.

Bidvest’s food services business was also likely to profit from the 2010 FIFA World Cup, as certain catering contracts had already been secured.

The Bidfood business was not the only subsidiary of Bidvest to gain from the 2010 Soccer World Cup, with Bidpaper Plus cashing in on ticketing sales, and Bid Auto offering tourists car rentals.

“There is a lot of speculation into Bidvest’s involvement and how much Bidvest is going to get out of it. I can’t quantify it to you, because sporting events themselves don’t necessarily bring all the benefits. But to put it into perspective, we have about 500 000 foreign visitors for the period of one month, which means that there will be an increase in the number of beds that need laundering, the number of rental cars that will need to be made available and the number of portable toilets.”

Joffe said that the country was also likely to experience a significant increase in the number of tourist over the medium term, and on a sustained basis, this could prove lucrative to the company.

During the year ended June, Bidvest said that profit had declined by 12,8% to R2,9-billion, compared with the R3,3-billion recorded in 2008.

The group’s headline earnings per share declined by 12,9% to 930c a share and basic earnings a share declined by 13,4% to 929,6c a share – in line with its trading update released in mid-August. 

Bidvest explained that the decline in headline earnings was, in part, owing to the expensing of R118,3-million in closure and reorganisation costs in certain operations within motor retail, the UK foodservice and Ontime Automotive business, as well as the impact of higher interest rates in the first half of the financial year.

To subscribe to Engineering News's print magazine email subscriptions@creamermedia.co.za or buy now.