Services, trading and distribution group, the Bidvest Group, expects its headline earnings a share and earnings a share for the financial year to June 30 to be more than 20% lower year-on-year, as a result of the impact of Covid-19 on some of its businesses.
While trading profit has been acceptable, Bidvest is expecting that headline results for the financial year will be impacted by the overall weak macro conditions and business rightsizing, as well as changes in accounting standards.
Additionally, Comair’s business rescue process will have an effect, as will the decline in Adcock Ingram's share price between June 30 and July 31, 2019.
Bidvest has proactively enhanced its liquidity position by securing R4.5-billion in additional general credit facilities, to total R11-billion, with South African banks.
For the ten months to April 30, Bidvest Group CE Lindsay Ralphs says, the group has managed to deliver a credible trading profit performance, albeit at a much slower growth pace compared to the interim period, ended December 31, 2019.
“This is commendable considering the South African economy was already significantly constrained pre-Covid-19.”
He adds that the group’s financial position remains solid, providing a level of comfort in these challenging and uncertain times.
However, Ralphs also points out that the Covid-19 pandemic, which has mainly impacted the April month, has resulted in the economic and social environment becoming more demanding and uncertain, and has created significant operational disruptions, both on the demand and supply side of our economy.
He states that an important imperative during this crisis, has been to protect and provide for the safety, health and wellbeing of the group’s employees, who Ralphs says, are collectively, the enablers of the businesses.
“We have initiated a work-from-home policy wherever possible and relevant, and we have ensured that all safety and health protocols are being observed.”
To assist its South African employees not working during these difficult times, Bidvest Group has established a R400-million Bidvest Covid-19 Fund. The group has also contributed in other ways to the broader humanitarian efforts in the country, including to the Solidarity Fund.
Additionally, he says the executive management team and board members agreed to 30% salary and fee sacrifices, respectively.
Applications to the Unemployment Insurance Fund on behalf of Bidvest Group’s employees for the Covid-19 Temporary Employer/Employee Relief Scheme benefit have been made and are ongoing.
In addition, furlough support by the governments of the UK and the Republic of Ireland are comprehensive in supporting the livelihoods of Bidvest Group’s employees in those markets.
“This pandemic will have lasting effects, and long-term structural changes to the economy and business in general, and the Bidvest Group will strategically review all businesses and right-size operations, which may lead to retrenchments, to ensure that our operating models remain relevant and appropriate for the level of demand,” concludes Ralphs.