Bidcorp Group yesterday said consumer demand in its global operations remained subdued while it took a knock from currency volatility, which impacted its earnings in rand terms for four months to October 2024.
This is in spite of the year to date up to October reflecting an 8% firming up in constant currency headline earnings per share.
Bidcorp CEO Bernard Berson said that the company has been performing resiliently against the current operating framework. A bigger portion of Bidcorp’s operations is concentrated in global markets outside of South Africa.
“As we conclude the first part of the fiscal year, Bidcorp has recorded a resilient and robust performance, despite the ongoing global challenges we are contending with,” said Berson yesterday.
“Our teams have once again risen to the occasion and performed brilliantly in a tough environment, executing very well on a clear and deliberate strategic framework.”
Subdued consumer demand occasioned by the elevated cost-of-living crisis has continued to “impact spending” in most countries the company operates in.
The company said data from several international markets was suggesting that “tough economic conditions are driving their customers to spend more in-home and not eating out” as much.
But despite this, Bidcorp said its constant currency results for the year to date ended October 2024 reflected a “continuing resilient performance with trading profit growth of around 10% achieved in the context of a very low food inflationary” environment.
Resultantly, constant currency headline earnings per share (HEPS) for year-to-date to October also showed growth of 8%. In the quarter to the end of October, trading profits in Bidcorp grew by around 10% compared to the contrasting period.
The company’s estimated weighted average food inflation stood at about 2%.
However, currency volatility was wrecking havoc for the company as currency movements impacted Bidcorp’s rand-translated results.
Over the October year-to-date period under review, forex movements had a 3% adverse impact on the company’s rand performance amid “potential for further impacts” as the financial year progresses.
“With the group having more than 90% of its operations located outside of South Africa, management continue to evaluate the constant currency performance of the businesses as the correct measure of performance,” said Bidcorp.
During the period under review, there were no financing or refinancings concluded by the company although there were “a few” that were under discussion.
As at the beginning of this month, Bidcorp and its subsidiaries had liquidity headroom, including uncommitted facilities and cash and cash equivalents, of R18.3 billion.
“Despite the challenging macro-economic environment experienced in the first four months of FY2025, we are growing in line with our expectations in economically tough, stagnant, and zero-inflation markets,” said the company.
“There remains a promising pipeline of future opportunities, both organic and acquisitive, affirming the effectiveness of our long-held strategic approach.”
Bidcorp is also looking forward to a boost in business and trade under the festive season.
The company also said it had its eyes on its “pipeline of bolt-on acquisitions, both in achieving geographic reach as well as new product opportunities, across many geographies remains material” although it was difficult to complete every opportunity investigated and pursued.
BUSINESS REPORT