After maintaining a strong upward trajectory across all geographies during the six months ended December 31, JSE-listed Bidcorp is optimistic about its future prospects
With a global rebranding effort to ‘Bidfood’ under way to reinforce its image as “value-add food people”, Bidcorp’s foodservice businesses worldwide are implementing a strategy of rebalancing the exposure between contract, national and independent customers in their respective markets.
This was adding further momentum in the second half of the year following strong real home currency growth across all its operations during the first six months of the year, Bidcorp CEO Bernard Berson said on Thursday.
“The company’s strong cash position mitigates market volatilities and uncertainties, a competitive advantage when trading across numerous jurisdictions,” he pointed out.
In addition, innovative, technology-based solutions for customers and global procurement opportunities continue to gain traction as part of the group’s value-add service to grow market share, while unexploited potential emerged in the fresh produce and meat categories and value-add processing sectors, in many regions.
The group expected to consistently manage what was within its control and adapt to factors beyond its control, including currency variability.
However, overall, underlying operating performance remains positive.
The emerging markets segment, including Hong Kong, South Africa, Chile, Brazil, Singapore, the Middle East and China, delivered a “pleasing” performance in all territories, reporting an aggregate 12.1% increase in sales and a trading margin mark up from 5.3% to 5.9% during the first six months of the year.
The Middle East is expected to continue trading satisfactorily, benefiting from its focus on United Arab Emirates and Saudi Arabia, while the “good base” built and the learnings obtained, in addition to “motivated and ambitious management”, in Brazil and Chile, will enable an expansion in the regions. Results in China will be driven by existing and new product and an energetic sales effort and quality service.
South Africa’s outperformance of the market during a particularly strong first half is expected to be maintained.
Bidcorp’s star performer for the first half of the year, Australasia, kicked off the second half of the year on a “firm note”, continuing the momentum gained in the prior six months and reporting an improvement in margins from 5.3% to 6.2%.
The New Zealand economy outperformed that of Australia during the half-year under review, with annualised revenue of NZ$1-billion and a large new customer base secured in the fresh segment.
Further, in the UK, where a rebranding roll-out was well under way, the worst of the Brexit fears were still unfounded and the economic backdrop remained buoyant.
Meanwhile, in Europe, the group is investigating further identified acquisitive opportunities in current and adjacent territories.
This followed the combined trading profit increase of 23.5% in constant currency and a segment margin increase from 3.2% to 3.6% during the six months to December 2016.