JSE-listed Bidvest says it achieved an “excellent financial and operating performance” for the financial year ended June 30, with trading profit up by 47.8% year-on-year to R7.9-billion and cash generated by operations up by 48.6% to R13.6-billion. 

The group says these results reflect success in achieving its planned strategic objectives, increased market share and organic growth in key sectors.

It also follows the successful conclusion of the disposal of noncore assets, which started after the unbundling of the foodservices businesses and which has resulted in cumulative proceeds of more than R4-billion since the 2017 financial year.      

Bidvest says it has also been successful in advancing its strategy of geographic diversification, having concluded two sizeable and a few smaller bolt-on acquisitions in the UK in the financial year to June 30.   

Further, there was limited damage to the infrastructure of the group during the riots in KwaZulu-Natal and parts of Gauteng in July and no employees were harmed.

The group notes that it provided assistance to both employees and communities in the affected areas where there were food shortages owing to supply chain disruptions.

For the period under review, Bidvest’s Services, Automotive and Commercial Products divisions delivered their highest ever trading profit, as did Branded Products, which is inclusive of a second full-year contribution from Adcock Ingram.

Cash generation was 48.6% higher at R13.6-billion, with free cash generated doubling to R7.3-billion and group cash conversion of 144.5%.

Headline earnings per share (HEPS) from continuing operations grew by 113.9% to R11.83.

Normalised HEPS, a measurement used by management to assess the underlying business performance, grew by 25.6% to R12.92.

Group earnings a share were R11.31, compared with a loss a share of R1.36 reported for the prior financial year.

Return on funds employed improved considerably from 23% as at June 30, 2020, to 31.6% at the end of the financial year under review.

Return on invested capital of 14.1%, which compares with 12.9% in the prior financial year, is above the group's weighted cost of capital.

Bidvest declared a final dividend of R3.10, bringing the total dividend for the year to R6 apiece.

OUTLOOK

While the pandemic continues to disrupt global supply chains and affect certain markets, a rapid sustainable economic recovery is likely to be delayed, Bidvest says.

The group, nevertheless, remains positive that profitability momentum will be maintained, given the group's spread of products and services.

Encouragingly, there are signs of increased infrastructure investment activity out of mining and industrial sectors, the group highlights.

Shortly after year-end, Bidvest concluded the refinancing of the €320-million loan facility that was due to mature in September 2022. As part of this refinancing, a new syndicated facility was upsized to £400-million and included a revolving credit element that provides the group with enhanced funding flexibility.

The remaining £60-million in bridge financing was settled.