| Mon 27 Aug 2007, 8:33 | | BVT - Bidvest Records Headline Earnings Per Share |
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BVT
BVT
BVT - Bidvest Records Headline Earnings Per Share Growth Of 20,6%
For Year To June 2007
Press Release
THE BIDVEST GROUP LIMITED
("Bidvest")
Registration number: 1946/021180/06
Share code: BVT & ISIN ZAE000050449
BIDVEST RECORDS HEADLINE EARNINGS PER
SHARE GROWTH OF 20,6% FOR YEAR TO JUNE 2007
Bidvest posts 20,6% rise in headline earnings per share for year to June
2007
Compound growth in headline earnings per share tops 25% per annum for 16
years in succession.
HIGHLIGHTS
Revenue growth of 23,8% to R95,7 billion
Trading profit increases by 23,6%
Headline earnings per share rose by 20,6%
Trading margin largely stable at 4,7%
Cash generation and balance sheet remain strong
Major acquisitions concluded - Angliss in Asia, Viamax in SA.
Final distribution of 248,4 cents declared
`Succession generation` of managers moving into place
OVERVIEW
Bidvest CE Brian Joffe today announced "satisfactory trading results" for
the year to June 30 2007, posting an increase in headline earnings per share
of 20,6% to 970,0 cents and maintaining the Group`s record of uninterrupted
growth. For 16 years, compound growth in headline earnings per share has
topped 25% per annum.
Trading profit rose 23,6% to R4,5 billion off a largely stable trading
margin of 4,7%. Revenue grew 23,8% to R95,7 billion. Performance was driven
by organic growth and operational efficiencies.
Earnings reflect good contributions from international operations, notably
Australia, backed by strong results from South African businesses.
Rand weakness had a positive effect on the translation of offshore earnings.
Joffe reports that basic earnings per share growth of 12,9% was impacted by
the impairment of the Group`s interest in Tiger Wheels Limited of R178,3
million. Tiger Wheels Limited was suspended on the JSE after announcing that
its ATS subsidiary could not gather support from its funders for continued
operations.
Dinatla, Bidvest`s empowerment partner, refinanced its investment. Bidvest
facilitated the process at a R350 million net cost. The benefit of
transaction facilitation is reflected in a 23,2% increase in the diluted
headline earnings per share.
Joffe notes that cash generation and the balance sheet remain strong, though
working capital absorption and significant capital expansion investment made
calls on Group funds. Net debt rose to R3,7 billion, though interest cover
at eight times reflects significant borrowing capacity.
In May 2007, the Group set up a R4,5 billion domestic medium-term note
programme. An initial tranche of R1,5 billion was raised after year-end.
Two major acquisitions were concluded - Angliss and Viamax.
In May, Bidvest bought 100% of Angliss Singapore, Angliss Hong Kong and
Angliss China in a $80 million deal funded by debt raised in Australia.
Angliss is a leading Asian foodservice business with combined annual sales
of more than R2,1 billion.
The purchase of Transnet`s Viamax fleet management and leasing business was
concluded late in the period and implementation is not expected until
September 2007. The R974 million deal will be funded from existing Group
resources.
Changes have been made to the structures of Bidfood and Bidvest Australasia.
Within Bidfood, the Cateplus management structure has been unified while the
ingredient supply businesses have been consolidated. Bidvest Australasia has
a new identity (Bidvest Asia Pacific), reflecting its wider geographic
scope.
Joffe notes that the Group now employs 104 184 people worldwide, up from 93
325 a year ago. Financial numbers alone are not a true representation of the
strength of an organization. Bidvest continues to invest in its employees in
order to meet the qualitative growth of the human capital in the Group.
Across Bidvest a `succession generation` of managers is moving into senior
positions, as transformation and development programmes take hold.
DISTRIBUTION
The final distribution to shareholders out of share premium, in lieu of a
dividend, increased 20,0% to 248,4 cents a share (2006: 207,0 cents a
share).
PROSPECTS
Joffe says the environment is generally favourable in Bidvest`s markets and
the 2005 objective of doubling the size of Bidvest in five years remains on
track.
Opportunities for sustained growth exist locally though tightening credit
conditions and rising inflation create challenges. In Europe, Joffe is
confident growth objectives will be met while the Group is poised to pursue
major opportunities in Asia. Joffe reports that Bidvest is consolidating its
Namibian assets into Bidvest Namibia ahead of a Windhoek listing.
Bidvest is committed to the delivery of superior results in 2008.
DIVISIONAL REVIEW
Bidfreight`s trading profit rose 11,1% to R596,4 million on a 21,7% increase
in revenue to R19,0 billion.
Safcor Panalpina`s international clearing and forwarding operations put in a
pleasing performance and airfreight operations achieved a succession of
throughput records.
South African Bulk Terminals was impacted by lower agricultural export
volumes in the first three quarters, though activity picked up substantially
toward year-end.
Steel exports fell at Bidfreight Port Operations impacted by the high local
demand in the construction sector. Island View Storage benefited from high
demand for the storage and handling of bulk liquid products. Bulk
Connections is handling more non-coal commodities and recorded strong
growth.
SACD Freight continues to benefit from global growth in container traffic.
Revenue and trading profit rose above budget. Marine Services performed well
and Manica Africa recorded a pleasing improvement.
Slow expansion of ports infrastructure is leading to high utilisation
levels.
Bidserv achieved a creditable performance despite strikes in the security
and cleaning industries. Growth in tourism, property and petro-chemicals had
knock-on benefits for numerous units. Trading profit rose 19,0% to R669,4
million on a 16,2% increase in revenue to R5,4 billion.
Bidserv increased its ownership of Master Currency to 100% in a transaction
effective from July 2007 and Hotel Amenities Suppliers (ex-Bidfood) joined
Bidserv. TMS bought a small industrial services company.
The cleaning services market remained buoyant while Laundry Services
achieved pleasing profits. Investment in infrastructure and consolidation
drove continued TMS growth. The Steiner Division also achieved good growth
and has opened operations in Mozambique and Botswana.
Industrial Products has built strong momentum. National rollout of G. Fox
products has helped this business grow 50% in two years. Malawi-based Giant
Clothing put in another strong performance. Green Services had a record
year.
Aviation Services enjoyed substantial growth and has become a significant
player. The business was awarded a super licence, effective March 2008.
The guarding and electronics security businesses of Bidrisk Solutions were
impacted by the aftermath of the strikes. Magnum`s results were extremely
disappointing.
Global Payment Technologies continues to secure acceptable growth. Pleasing
progress at Business Solutions and Group Procurement is expected to
continue. Office automation did well and won a major government tender.
Bidtravel had an outstanding year and pleasing performance was recorded at
Bidvest Bank.
Bidvest Europe reported disappointing trading profits at its UK foodservice
businesses, though operations in continental Europe continued to improve.
Revenue was up 35,4% to R30,0 billion and trading profit improved 16,3% to
R757,6 million.
Bad debt levels have risen sharply in the UK, a development that resulted in
some losses at 3663 First for Foodservice. Energetic action by UK operations
resulted in 6% sales growth despite last year`s loss of the Ministry of
Defence contract. 3663 First for Foodservice won contracts to supply the
Compass Group, Hilton hotels and HM Prison Service.
Barton Meat Company is staging a recovery while the frozen, fresh and
chilled division recorded another year of sales growth.
Deli XL Netherlands put in a strong performance with a 40% leap in trading
profits following significant operational, buying, marketing and sales
gains.
Deli XL Belgium has benefited from management changes. Acquisition of the
Kruidenier foodservice operation has created an operational base in Flanders
and positioned the business as industry leader.
Horeca Trade, the Dubai-based foodservice operation, has doubled the size of
its business in 18 months.
Bidvest Asia Pacific traded extremely well, growing rand-converted revenue
and trading profit by 36,2% and 58,0% respectively.
The Angliss transaction (effective in May 2007) creates exposure to some of
Asia`s fastest-growing markets, but resulted in a limited contribution in
2007.
Australian operations made a strong contribution with trading profit up
33,2% to A$44,6 million off revenue growth of 9,0%. Geographical expansion
by the three divisions is ongoing, underpinned by strong organic growth.
Bidvest Australia now holds an estimated 20% of the national foodservice
market.
Bidvest New Zealand grew trading profit (in local currency) by 23,3%.
Revenue rose 19,3%. Results reflect the full-year effect of a successful
restructure. Crean, the core foodservice business, is now complemented by a
fast-growing fresh produce division supported by a focused logistics
operation.
At Angliss, local management is pursuing synergies across the Singapore and
Hong Kong businesses.
Bidfood revenue rose 15,0% to R3,8 billion and trading profit increased 6,1%
to R279,8 million. Bidfood now comprises three focused divisions: Caterplus,
Speciality and Bidfood Ingredients.
Caterplus benefited from a buoyant hospitality sector and achieved pleasing
results. Two distinct cultures were aligned, enabling Caterplus to
aggressively compete for market share. The business increasingly complements
the penetration of large national accounts with strong gains among smaller
customers.
Bidfood Ingredients became operational in April 2007. It houses all food
ingredient businesses in a single structure, creating cross-selling
opportunities, potential for supply synergies and increased focus on product
development. Corrective action and a back-to-basics approach are expected to
drive improved results.
Another strong performance was registered at Speciality, with revenue growth
of 29,1%. Trading profit rose 29,3%. Largely stable exchange rates were
beneficial for Speciality Foods. Opportunities for expansion into Namibia
and Mpumalanga will be explored.
Bid Industrial and Commercial Products achieved pleasing growth. Trading
profit rose 48,9%. Revenue increased 24,2%. Demand for cable and electrical
products remained strong, underpinned by infrastructure expansion.
Voltex`s wholesale and specialist supply businesses performed strongly. A
weakening rand was positive for the business while copper price fluctuations
created trading opportunities. Demand-side management remains central to
national energy strategy and Voltex is strongly positioned as a reliable
partner of major institutions and businesses seeking energy savings.
Chinese imports create a strategic challenge, but the situation is generally
well managed.
Accelerating urbanisation, high business and consumer confidence were
positive for businesses in the office furniture, stationery and computer
consumables markets. Corporate office relocations and upgrades led to an
active furniture project market. Sustained growth prompted renewed expansion
of branch networks.
Walton`s southern and northern Gauteng regions have been consolidated while
high furniture category growth within Waltons led to the expansion of
distribution facilities and greater emphasis on furniture showrooms.
The division`s packaging businesses experienced strong demand for strapping
and tape products. The business registered improved performance, lifted by
last year`s rationalisation and the rebalancing of local production and
imported goods. Increased imports led to stronger penetration of key
markets. Vulcan Catering Equipment (ex-Bidfood) has further strengthened the
division.
Trading profit at Bidpaper Plus rose 5,7% to R226,9 million on flat revenue
of R1,8 billion. Buoyant retail activity was positive for the business,
particularly bill presentment and print-to-post and fulfilment services.
The Export Projects division won the contract to supply ballot papers to the
Nigerian election while the Lithotech corporate sales team achieved
significant national account success. Investment in new plant at Silveray
Manufacturing paves the way for further expansion into the scholastic
stationery market.
Bid Auto trading profit rose 16,6% to R724,3 million while revenue moved
15,4% higher to R18,7 billion. Total sales of new and used vehicles rose to
88 989, up 5,4%. A 39,5% return on funds employed was creditable in a more
challenging market. The National Credit Act affected only one month`s
trading, but the retail market slowdown was significant. However, the
construction boom supported stronger commercial vehicle sales.
Bid Auto`s margin improved from 3,8% to 3,9% due to diversification and good
insurance portfolio returns. Further diversification progress is anticipated
with the pending integration of Viamax into Bid Auto.
Acquisition of Shell AutoServ, a national chain of 28 service centres,
facilitated further growth in parts and service business. The chain has been
incorporated into the McCarthy Value Centres (launched in March to sell
affordable quality used cars and a growing range of affordable Chinese
vehicles). Recent launch of a Chinese range of light commercial vehicles has
strengthened Bid Auto`s import and distribution business.
McCarthy Heavy Equipment was launched in February to distribute bulldozers,
rollers and excavators from China. McCarthy PreOwned was rebranded McCarthy
Call a Car Direct and the network expanded. Point-to-point Chauffeur Drive
has extended the range of Budget Rent a Car`s activities.
Corporate
Namsov, Namibia`s leading horse mackerel fishing business, took its
ownership of pilchard-focused Namsea to 100%. Lower catch rates were offset
by higher selling prices enabling a 5,5% growth in trading profit.
UK-based Ontime Automotive was impacted by the loss of a technical services
contract and further losses in the national car delivery business, but
pleasing performances were recorded in the Specialist and Prestige
distribution divisions.
At Bid Property Holdings the development of a high-quality portfolio has
helped Bidvest retain control over strategic operational properties.
Property management and maintenance has become a focus area.
Bidvest acquired 20% of JSE-listed Comair.
ISSUED ON BEHALF OF: THE BIDVEST GROUP LIMITED
BY: CLEAR DISTINCTION COMMUNICATIONS
BIDVEST CONTACTS: Brian Joffe (CE)
Tel: (011) 772 8704
David Cleasby (FD)
Tel : (011) 772 8706
Mobile: (083) 228 1810
CONSULTANCY CONTACT: Carol Dundas
Tel: (011) 444 0650
Mobile: (083) 447 6648
Date: 27/08/2007 08:33:35 Produced by the JSE SENS Department.
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