International foodservice group Bid Corporation delivered a record trading performance for the year to June 30 which enabled it to raise its dividend 75 percent above the previous year.
A final cash dividend of 400 cents was declared, bringing the payout for the year to 700c a share.
The strong performance was despite the lingering economic and social impacts of the Covid-19 pandemic in a number of countries where the group operates and in the hospitality, tourism and leisure industries.
Looking ahead, CEO Bernard Berson said in a telephone interview that they had a “long runway for organic growth”.
The group would continue with its strategy of continually simplifying the business, its decentralised management structure, strong entrepreneurial management teams catering specifically to their own markets, achieving the right customer mix and on adding value to customers.
“Our expectation is that 2023 will be another year of profitable progress. As things currently stand, we are budgeting for real growth,” he said. In the first eight weeks of the new financial year revenues were up 30 percent.
Headline earnings a share increased 77.1 percent to 1 538.3c per share in the year to June 30, with basic earnings per share increasing 56.2 percent to 1 444.3c per share.
Following the Omicron impact through the northern hemisphere winter, the group experienced steadily building momentum in the last four months in particular.
Group trading profit increased 58.5 percent to R7.6 billion and the trading profit margin widened to 5.2 percent from 4.2 percent, representative of margins achieved pre-pandemic.
He said the first half started well for Bidcorp with most economies rebounding from the pandemic, with the Europe, UK and Emerging Markets contributing to a record first quarter. Food price increases this year were mostly passed on through pricing.
Australasia was significantly impacted by the pandemic in the first six months but recovered well in the second half.
Demand in the free trade hospitality markets bounced back quickly post pandemic-restrictive measures, with most sectors reaching pre-pandemic levels.
Office catering recovered somewhat but remained impacted by work-from-home flexibility. “Fortunately, the exposure to major catering institutions located in large capital cities has been reduced in recent years.” He believed, however, that most people would return to the office once economies started to improve.
Non-discretionary demand from hospitals and other institutions was stable.
He said significant staff shortages, mainly operational staff, supply chain disruptions and rising operating costs and rapid inflation driven by fallout from the Russian invasion of Ukraine, had created tougher operating conditions.
“Our teams did a tremendous job of seizing opportunities that circumstances presented, being able to deliver a record trading performance,” said Berson.
Investment activity gathered pace in the second half, both into capacity expansion projects and bolt-on acquisitions. Ten bolt-on acquisitions were concluded at a cost of R800 million.
These were smaller, lower risk and highly selective acquisitions, the level of which were not yet at pre-Covid 19 levels of about 15 to 20 acquisitions in a year, said Berson.
He said Bidcorp remained well capitalised and retained adequate headroom for further organic and acquisitive growth,
edward.west@inl.co.za
BUSINESS REPORT