Bidvest CE Brian Joffe
Photo by: Duane Daws
Trade, distribution and services group Bidvest on Monday reported a 15% jump in revenue, to R153.4-billion, for the financial year ended June 30. Profit for the year was up 6.6%, at R5.05-billion.
Bidvest Europe and Bidvest Asia Pacific made the biggest contributions to these positive numbers, on the back of organic and acquisitive growth. The weak rand also assisted.
Bidvest derived 38.8% of its trading profit from outside South Africa.
The group’s trading margin declined to 5%, down from 5.3%, on higher contributions from lower-margin businesses, such as automotive retailing, and the marked decline in trading profit at some foreign operations.
Net debt increased to R4.5-billion, up from R3.6-billion.
In its results statement, Bidvest said it had delivered “solid trading results . . . against a backdrop of challenging trading environments in many geographies”.
Bidvest South Africa’s results were viewed as “pleasing” despite competitive markets and subdued economic activity, noted CE Brian Joffe in a media release.
Revenue increased 10.5%, to R69.3-billion, with trading profit up 10.5%, to R4.2-billion.
In the automotive industry, Bidvest exited what it termed the non-performing Peugeot, Citroen and Volvo franchises.
Bidvest Asia Pacific achieved revenue growth of 21.8%, to R28.6-billion. Trading profits increased by 21.1%, to R1.2-billion.
Bidvest Europe delivered a 17.1% increase in revenue, to R48.2-billion. Trading profit increased 2.6%, to R936.2-million.
Bidvest Namibia recorded a small decline in trading profit as a result of the uncertain market conditions in its fishing operations.
Revenue rose to R3.6-billion, up from R3-billion. However, trading profit fell 7.1%, to R592.2-million.
Bidvest said on Monday that the economic confidence in many of the geographies within which it operated was fragile, with investors becoming risk averse to emerging markets.
In South Africa, the group’s operations “remained positive”, with innovation and continued diversification key drivers for growth.
“Weakness in the rand and the likely spike in inflation may present some cost pressures, but these pressures also give rise to trading opportunities,” commented Joffe.
“Our divisional teams continue to seek out acquisitive opportunities . . . and Bidvest continues to use its South African businesses as a base to harness product-related opportunities into Africa. Further progress in expanding our African footprint is expected.”
In the Asia Pacific region, there existed further consolidation opportunities, which were being aggressively pursued.
In Europe, despite the low growth environment, further opportunities to add new product ranges and expand local footprints via organic and acquisitive growth, remained a focus across all Bidvest businesses.
Bidvest Namibia would continue to pursue strategic growth across the commercial and fishing businesses.
Generally speaking, Joffe said Bidvest had ample capacity to fund both organic and acquisitive growth.
Bidvest declared a final gross cash dividend of 396 c per ordinary share for the year ended June 30.