| Mon 2 Mar 2009, 7:05 | | BVT - The Bidvest Group Limited - Results for the half year ended December 31 |
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BVT
BVT
BVT - The Bidvest Group Limited - Results for the half year ended December 31
2008
The Bidvest Group Limited
Registration number 1946/021180/06
Share code: BVT ISIN: ZAE000117321
Results for the half year ended December 31 2008
Revenue
+11,3% to R60,0 billion
Trading profit
+6,4% to R2,6 billion
Basic earnings per share
+8,7% to 530,4 cents
Headline earnings per share
-8,9% to 454,0 cents
Distributions per share
-13,6% to 190,0 cents
(based on closing price of February 26 2009)
Consolidated income statement
for the Half year ended Year ended
December 31 June 30
2008 2007 Percentage 2008
R000s Unaudited Unaudited change Audited
Revenue 59 990 887 53 884 531 11,3 110 477 551
Cost of (48 238 (43 711 260) (88 785 765)
revenue 631)
Gross income 11 752 256 10 173 271 15,5 21 691 786
Other income 181 066 197 842 267 357
Operating (9 318 599) (7 913 027) (16 624 277)
expenses
Sales and (6 205 722) (5 223 674) (11 201 947)
distribution
costs
Administration (2 237 292) (1 993 116) (4 234 615)
expenses
Other costs (875 585) (696 237) (1 187 715)
Trading profit 2 614 723 2 458 086 6,4 5 334 866
Net finance (562 891) (445 468) (931 040)
charges
Finance income 58 222 49 311 88 396
Finance (621 113) (494 779) (1 019 436)
charges
Share of 29 320 59 081 121 962
profit of
associates
Dividends 26 238 24 388 25 526
received
Share of 3 082 34 693 96 436
current year
earnings
Non trading 44 019 (46 544) 9 041
items
Net profit 293 672 (50 019) (60 480)
(loss) on
disposal of
investments in
subsidiaries,
associates and
operations
Net loss
arising on
closure and
reorganisation
of operations (239 239) - -
Reorganisation (165 338) - -
costs
Impairment of (73 901) - -
property,
plant and
equipment
Profit (loss)
on disposal of
property,
plant
and equipment (4 227) 3 475 46 747
Impairment of (6 204) - (63 722)
goodwill
Negative 17 - 86 496
goodwill
recognised in
income
Profit before 2 125 171 2 025 155 4,9 4 534 829
taxation
Taxation (477 456) (525 576) (1 199 960)
Profit for the 1 647 715 1 499 579 9,9 3 334 869
period
Attributable
to:
Shareholders 1 594 074 1 480 024 7,7 3 252 884
of the Company
Minority 53 641 19 555 81 985
shareholders
1 647 715 1 499 579 9,9 3 334 869
Shares in
issue
Weighted 300 514 303 283 303 159
(`000)
Diluted 302 932 310 195 308 075
weighted
(`000)
Basic earnings 530,4 488,0 8,7 1 073,0
per share
(cents)
Headline 454,0 498,1 (8,9) 1 068,0
earnings per
share (cents)
Diluted basic 526,2 477,1 10,3 1 055,9
earnings per
share (cents)
Diluted 450,4 487,0 (7,5) 1 051,0
headline
earnings per
share (cents)
Distributions 190,0 220,0 (13,6) 495,0
per share
(cents)*
*Includes
distribution
from share
premium and
capitalisation
issues
HEADLINE
EARNINGS
The following
adjustments to
profit
attributable
to
shareholders
were taken
into account
in the
calculation of
headline
earnings:
Profit 1 594 074 1 480 024 7,7 3 252 884
attributable
to
shareholders
of the Company
Impairment of 80 105 - 63 722
property,
plant and
equipment,
goodwill and
intangible
assets
Property, 73 901 - 21 113
plant and
equipment
Goodwill 6 204 - 16 753
Intangible - - 25 856
assets
Net loss (293 672) 50 019 60 480
(profit) on
disposal of
investments in
subsidiaries,
associates and
operations
Net loss 4 227 (3 475) (46 747)
(profit) on
disposal of
property,
plant and
equipment and
intangible
assets
Property, 4 227 (3 475) (46 789)
plant and
equipment
Intangible - - 42
assets
Negative (17) - (86 496)
goodwill
recognised in
profit
Attributable - - 33
to minority
shareholders
Tax effect (20 461) (15 972) (6 072)
Headline 1 364 256 1 510 596 (9,7) 3 237 804
earnings
Rand/Sterling
exchange rates
Opening rate 15,893 14,180 14,180
Closing rate 13,704 13,691 15,893
Average rate 15,206 14,140 14,645
Segmental analysis
for the Half year ended Year ended
December 31 June 30
2008 2007 Percentage 2008
R000s Unaudited Unaudited change Audited
REVENUE
Bidfreight 10 729 253 10 580 870 1,4 21 992 703
Bidserv 3 644 707 2 955 021 23,3 6 424 538
Bidvest Europe 19 329 869 16 007 122 20,8 33 683 788
Bidvest Asia 8 790 206 6 575 119 33,7 14 467 388
Pacific
Bidfood 2 650 759 2 195 275 20,7 4 418 919
Caterplus and 1 705 122 1 478 667 15,3 2 925 383
Speciality
Bidfood Ingredients 945 637 716 608 32,0 1 493 536
Bid Industrial and 4 969 103 4 594 101 8,2 9 403 025
Commercial Products
Bidpaper Plus 1 167 584 1 020 377 14,4 1 937 393
Bid Auto 8 822 511 9 989 525 (11,7) 18 467 468
Bidvest Namibia 860 399 568 952 51,2 1 377 328
Corporate 458 587 494 483 (7,3) 993 501
Ontime Automotive 450 397 489 923 (8,1) 973 259
Investment and 8 190 4 560 79,6 20 242
other income
61 422 978 54 980 845 11,7 113 166
051
Inter Group (1 432 (1 096 (2 688
eliminations 091) 314) 500)
59 990 887 53 884 531 11,3 110 477
551
TRADING PROFIT
Bidfreight 365 456 330 874 10,5 690 813
Bidserv 489 401 384 816 27,2 838 659
Bidvest Europe 396 262 410 379 (3,4) 879 844
Bidvest Asia 285 729 251 300 13,7 551 403
Pacific
Bidfood 217 634 186 138 16,9 358 792
Caterplus and 128 594 110 296 16,6 214 290
Speciality
Bidfood Ingredients 89 040 75 842 17,4 144 502
Bid Industrial and 324 912 329 500 (1,4) 790 140
Commercial Products
Bidpaper Plus 130 305 126 591 2,9 220 192
Bid Auto 214 382 353 617 (39,4) 742 994
Bidvest Namibia 126 013 30 009 319,9 164 002
Corporate 64 629 54 862 17,8 98 027
Bidprop 69 491 54 190 28,2 98 650
Ontime Automotive (19 967) (10 913) (21 591)
Investment, other 15 105 11 585 30,4 20 968
income and
corporate costs
2 614 723 2 458 086 6,4 5 334 866
Consolidated cash flow statement
for the Half year ended Year ended
December 31 June 30
2008 2007 2008
R000s Unaudited Unaudited Audited
Cash flows from operating
activities
Operating profit (including 2 684 980 2 435 930 5 369 433
dividends from associates)
Depreciation and 745 314 703 767 1 432 651
amortisation
Other non-cash items (107 985) 39 662 14 909
Cash generated by 3 322 309 3 179 359 6 816 993
operations before changes
in working capital
Changes in working capital (2 405 069) (2 527 161) (730 298)
Cash generated by 917 240 652 198 6 086 695
operations
Net finance charges paid (562 892) (367 145) (1 237
784)
Taxation paid (650 677) (691 432) (1 166
305)
Distribution of share (833 646) (761 148) (761 148)
premium by Company
Dividends paid by (19 385) (10 640) (22 995)
subsidiaries
(1 149 360) (1 178 167) 2 898 463
Cash effects of investment
activities
Net additions to vehicle (24 806) (124 055) (215 948)
rental fleet
Net additions to property, (1 058 677) (976 278) (2 341
plant and equipment 458)
Net additions to intangible (70 378) (179 652) (228 525)
assets
Net disposal (acquisition) 247 374 (1 042 456) (1 290
of subsidiaries, 245)
businesses, associates and
investments
(906 487) (2 322 441) (4 076
176)
Cash effects of financing
activities
Proceeds from shares issued 36 131 - 47 972
Net issue (purchase) of (49 384) 63 783 (560 435)
treasury shares
Net borrowings raised 182 484 1 713 393 1 180 666
Net increase in bank 1 442 098 1 650 182 972 087
overdrafts
1 611 329 3 427 358 1 640 290
Net increase (decrease) in (444 518) (73 250) 462 577
cash and cash equivalents
Net cash and cash 3 038 618 2 374 442 2 374 442
equivalents at beginning of
period
Exchange rate adjustment (105 504) (10 603) 201 599
2 488 596 2 290 589 3 038 618
Consolidated balance sheet
at December 31 June 30
2008 2007 2008
R000s Unaudited Unaudited Audited
ASSETS
Non-current assets 17 017 052 14 613 196 17 250 060
Property, plant and 9 632 011 8 175 995 9 556 529
equipment
Intangible assets 529 638 404 857 486 471
Goodwill 3 996 419 3 912 432 4 556 137
Deferred tax asset 412 199 396 104 397 297
Defined benefit pension 120 200 - 120 983
surplus
Interest in associates 640 862 664 517 972 039
Investments 1 252 468 712 766 782 371
Banking and other advances 433 255 346 525 378 233
Current assets 24 754 750 22 234 444 24 611 325
Vehicle rental fleet 679 058 613 049 654 252
Inventories 8 731 101 7 876 548 8 389 646
Short-term portion of 438 103 277 764 244 688
banking and other advances
Trade and other receivables 12 417 892 11 176 494 12 284 121
Cash and cash equivalents 2 488 596 2 290 589 3 038 618
Total assets 41 771 802 36 847 640 41 861 385
EQUITY AND LIABILITIES
Capital and reserves 13 538 700 11 538 793 13 778 085
Attributable to 13 192 736 11 287 679 13 467 629
shareholders of the Company
Minority shareholders 345 964 251 114 310 456
Non-current liabilities 5 770 660 4 975 618 4 680 474
Deferred tax liability 204 555 324 263 220 993
Life assurance fund 26 491 41 127 33 478
Long-term portion of 4 493 441 3 824 403 3 546 908
borrowings
Post-retirement obligations 496 697 383 574 477 286
Long-term portion of 222 6 450 -
banking liabilities
Long-term portion of 361 377 244 705 218 152
provisions
Long-term portion of 187 877 151 096 183 657
operating lease liabilities
Current liabilities 22 462 442 20 333 229 23 402 826
Trade and other payables 15 233 696 13 787 079 17 200 173
Short-term portion of 437 001 236 917 290 397
provisions
Vendors for acquisition - 7 049 6 127
Taxation 302 269 218 249 511 427
Short-term portion of 590 570 275 013 356 130
banking liabilities
Short-term portion of 5 898 906 5 808 922 5 038 572
borrowings
Total equity and 41 771 802 36 847 640 41 861 385
liabilities
Number of shares in issue 300 887 304 171 300 575
Net tangible asset value 2 880 2 292 2 803
per share (cents)
Consolidated statement of changes in equity
for the Half year ended Year ended
December 31 June 30
2008 2007 2008
R000s Unaudited Unaudited Audited
Shareholders` interest
Issued share capital 15 044 15 209 15 029
balance at beginning of 15 029 15 143 15 143
period
in terms of share incentive 40 - 54
scheme
net movement in treasury (25) 66 (168)
shares
Share premium arising on (2 303 068) (880 088) (1 456
shares issued 154)
balance at beginning of (1 456 154) (182 657) (182 657)
period
in terms of share incentive 36 091 - 47 918
scheme
refund of share premium to (833 646) (761 148) (761 148)
shareholders
net movement in treasury (49 359) 63 717 (560 267)
shares
Foreign currency 924 664 1 007 131 1 968 975
translation reserve
balance at beginning of 1 968 975 1 158 151 1 158 151
period
realisation of reserve on - - 25
disposal of subsidiaries
arising during the current (1 044 311) (151 020) 810 799
period
Statutory reserves 7 984 13 398 13 049
balance at beginning of 13 049 16 691 16 691
period
transfer to retained income (5 065) (3 293) (3 642)
Equity-settled share-based 238 492 195 432 220 559
payment reserve
balance at beginning of 220 559 165 664 165 664
period
arising during the current 17 933 29 768 54 895
period
Movement in retained 14 309 620 10 936 597 12 706 171
earnings
balance at beginning of 12 706 171 9 453 517 9 453 517
period
profit attributable to 1 594 074 1 480 024 3 252 884
shareholders of the Company
change in fair value of 4 310 (237) (3 872)
available-for-sale
financial assets
transfer from statutory 5 065 3 293 3 642
reserves
Capital and reserves 13 192 736 11 287 679 13 467 629
attributable to
shareholders of the Company
Minority shareholders
balance at beginning of 310 456 198 457 198 457
period
attributable profit 53 641 19 555 81 985
dividends (19 385) (10 640) (22 995)
share of movement in 2 474 1 132 4 053
foreign currency
translation reserve
share of movement in equity- 34 73 126
settled share-based payment
reserve
changes in shareholding (1 256) 42 537 48 830
345 964 251 114 310 456
Total equity 13 538 700 11 538 793 13 778 085
Comment
Solid trading results were delivered for the half year to December 31 2008.
Basic earnings per share rose 8,7% however headline earnings per share declined
by 8,9%. The decline in headline earnings is in part due to the expensing of
R165,3 million in closure and reorganisation costs in certain operations within
motor retail, the UK foodservice and Ontime Automotive businesses. Without these
closure and rationalisation costs headline earnings per share would have
decreased by 0,8% on the previous interim period.
Decisive actions were taken to put the Group in a stronger position at a time of
uncertainty and worldwide economic recession. Difficult times provide
opportunities and Bidvest is alert to the potential this offers.
Earnings reflect a number of good contributions, notably from Bidserv, Bidvest
Australasia and the South African food businesses. Areas of underperformance
reside principally in 3663 First for Foodservice in the United Kingdom and Bid
Auto.
Bid Auto`s poor trading performance can in the main be attributed to the
prevailing high interest rate environment, a sharp decrease in consumer spending
and consumers inability to obtain vehicle finance. 3663`s performance declined
markedly as the severity of the recession in the UK impacted consumer confidence
and compounded weaker trading. Rand weakness had a positive effect on the
translation of the UK earnings. The rand traded at an average of R15,21 (2007:
R14,14) against sterling.
Working capital management remains an area of critical focus in an environment
of heightened debtor delinquencies and the inflationary impact on inventory
holdings. Tightening controls to improve returns on funds employed remains
management`s number one priority. Capital expenditure in all operations is being
revisited and prioritised in view of the current economic climate.
Financial overview
Revenue grew 11,3% to R60,0 billion (2007: R53,9 billion). Growth reflected
market share gains in many instances.
The trading margin was slightly down at 4,4% (2007: 4,6%) reflecting in the main
the drop in the Bid Auto performance.
Our balance sheet remains strong and is appropriately capitalised. Key focus
areas remain the delivery of adequate returns on recent infrastructure
investments in the medium term and the aggressive management of costs and
working capital as the threat of deflation looms.
Net debt rose to R7,9 billion (June 2008 R5,6 billion) driven by seasonal
working capital demands. Interest cover at 4,7 times reflects adequate borrowing
capacity. Finance charges increased 26,4% to R562,9 million reflecting higher
interest rates and the refinancing of term loans in the last quarter of the
previous financial year. Bidvest`s conservative attitude to debt remains
appropriate in the current climate.
Divisional review
Bidfreight
Reasonable results were achieved, though contracting volumes and growing margin
pressures were experienced by several operations. Trading profit was up 10,5% to
R365,5 million while revenue was marginally higher at R10,7 billion.
Bulk liquids performed well, buoyed by increased capacity and rental
adjustments. Good results were returned by SA Bulk Terminals. SACD Freight
recorded satisfactory results. Commodity exports are down and there was no sign
of an uptick of exports on the back of the weaker rand. Port Operations
experienced declines in the export of steel, forest products and ferrochrome.
Imports of cement and rice also fell. Bulk Connections performed satisfactorily,
though manganese volumes tailed off in the second quarter. Clearing and
forwarding`s results were negatively impacted as seafreight volumes were flat
while airfreight volumes fell by 15%. Marine performed well, driven by vehicle
exports and the higher activity levels within port operations. Operations in
Mozambique traded in an increasingly competitive environment. Operations in
Southern Africa showed a good improvement over the prior year with increased
volumes of agricultural products handled.
Bidserv
Excellent overall performance saw first-half trading profit rise 27,2% to R489,4
million while revenue grew 23,3% to R3,6 billion. The 57,9% return on funds
employed was also pleasing.
Prestige Group produced pleasing results in view of significant cost pressures
in the cleaning sector. Bid Travel Services performed below expectation as its
industry felt the economic slowdown. Travel brands are engaged in rigorous cost
control. TMS was well ahead of last year, benefiting from the significant
investment made in additional capacity. Steiner showed some growth but was below
expectation. Laundry division benefited from good results from a buoyant garment
rental market but was impacted by falling occupancy rates in the hospitality
industry. Industrial products continued to perform exceptionally well,
benefiting from the country wide rollout of G Fox. The results of Konica Minolta
and Oce were well up on last year benefiting from contractual wins. Magnum put
in another improved performance but Provicom was weaker which impacted the
overall Security division. Global Payment Technologies recovered strongly as
demand for its products gained momentum. BidAir`s performance was up on last
year, but further improvement is expected from the new management team. TopTurf
met expectations, though activity levels have fallen. Hotel Amenities Supplies
was impacted by falling hotel occupancy rates. Bidvest Bank and Master Currency
performed exceptionally well, driven by product innovation and new branch
openings.
Bidvest Europe
Results were disappointing other than the Benelux businesses, with overall
trading profit falling 3,4% to R396,3 million. Revenue rose 20,8% on last year
to R19,3 billion, somewhat ahead of budget.
The UK economy`s biggest quarter-on-quarter decline since 1980 (a decrease of
1,5%) occurred at the end of calendar 2008 following the onset of the financial
crisis. The major impact was seen in certain segments of 3663 First for
Foodservice in the UK. The sector in which 3663 operates, the hospitality
segment was one of the hardest-hit components of the overall quarterly GDP
decline, with a drop of 2,4%. The chief challenge was margin pressure.
Corrective action was reflected in lower than budgeted overhead costs. The
Barton Meat Company was closed and together with other rationalisation costs, an
exceptional charge of GBP11,8 million was taken. Trading profit fell at the
Wholesale division while Logistics made a loss. Major projects to cut costs are
being implemented. Trading profit at DeliXL Netherlands was significantly up on
the previous year. Hospitality volumes began to diminish in the second quarter
while sales rose in the institutional and catering markets. At Deli XL Belgium
sales and trading profit were slightly behind projections, but well ahead of the
previous year. In Dubai, Horeca grew revenue at improved margins, hence
improving trading profit.
Bidvest Asia Pacific
Overall results were good. Revenue grew 33,7% to R8,8 billion. Trading profit
was 13,7% higher at R285,7 million. The consolidation of divisional figures
masks under-performance particularly in Singapore and to a lesser degree in Hong
Kong and China.
Pleasing results were achieved by Bidvest Australia, despite a stalling economy.
Revenue rose 15,1% to A$819,8 million. Trading profit of A$31,1 million was up
15,3%. Organic growth drove sales, though food inflation buoyed the results. It
was a creditable performance in a flat market and reflects continued market-
share gains. The business remains cash generative with solid working capital
management. Foodservice performed well, with trading profit up 10,0% on 11,7%
sales growth. Hospitality had a strong second quarter and QSR achieved a
satisfactory result in tough conditions.
Bidvest New Zealand performed satisfactorily. Trading profit rose 12,1% to
NZ$9,9 million, though margins were under pressure. Revenue increased 15,3% to
NZ$215,5 million. Management performed well in challenging conditions as the
economy experienced four consecutive quarters of contraction. All divisions -
Foodservice, Fresh and Logistics - performed ahead of expectations.
Angliss Singapore suffered a trading loss of S$276K following major second
quarter losses arising from falling food commodity prices, in particular
poultry. Trading profit in the prior period was S$5,6 million. Revenue rose to
S$166,4 million. Singapore is in recession, with markets characterised by
massive competitor de-stocking in the wake of falling beef, pork and poultry
prices.
Angliss Hong Kong achieved profit of HK$21,3 million (2007: HK$24,4 million),
though revenue of HK$866,0 million was only marginally below target.
Profitability was severely impacted in the second quarter by the dumping of
stock by competitors as banks squeezed credit lines and the Chinese market for
western style product shrank significantly.
Bidfood
Satisfactory performances were achieved overall, with revenue up by 20,7% to
R2,7 billion while trading profit rose 16,9% to R217,6 million.
Caterplus and Speciality achieved continued growth in a challenging environment,
with trading profit rising by 16,6% to R128,6 million off revenue of R1,7
billion, a rise of 15,3%.
Caterplus continued its strategy of growing market share through increasing the
average spend per customer and the average value of each drop. The business
offers the most comprehensive `basket` of goods, creating competitive advantage
in a difficult market. Rigorous expense management and improved cash flow
contributed to a satisfactory performance. Trading conditions remain
challenging, with increased credit risk. Capacity constraints in several
branches impeded growth. New Cape premises are nearing completion and new
facilities are planned for a number of other regions.
Speciality with its basket of aspirational food brands delivered satisfactory
results. The economic slowdown and falling confidence had particular impact on
consumers in the middle and upper income bracket who drive demand for
Speciality`s brands. Speciality limited the impact through aggressive brand
promotion and efficient distribution.
Bidfood Ingredients (BFI) achieved pleasing results, with trading profit up
17,4%. All trading businesses performed well with the exception of NCP Yeast,
who were unable to pass on abnormal raw material price increases timeously.
Factories grew profitability with a notable turnaround in Chipkins Bakery
Ingredients. Debt exposure is being closely monitored and stock positions are
under scrutiny as the risk of deflation has grown. BFI continues to strengthen
its technical base through Bid Food Technologies while seeking strategic
alliances with major suppliers.
Bid Industrial and Commercial Products
A satisfactory overall result was achieved in largely adverse trading
conditions. Trading profit eased 1,4% lower to R324,9 million off revenue of
R5,0 billion, an 8,2% increase. A falling copper price and a slowdown in the
housing and retail sectors created challenges.
The Electrical Wholesale division grew revenue by 6,0% while trading profit fell
2,5%. Many customers faced with shrinking order-books extended their traditional
December shutdowns. Falling copper prices precipitated a reduction of inventory
levels. Stock holdings fell by R112 million by December. The division continued
its intensive cost-cutting. Concerted efforts to grow the businesses exposure in
the infrastructure and energy efficiency segments continued.
Stationery division performed exceptionally well with trading profit up 45,7%.
Walton`s performed well, benefited from store openings and refurbishments.
Kolok`s significant improvement was driven by improved trading conditions and
the benefits of a weaker rand. Trading profit and revenue at the Furniture
division were well below projections. Stock levels are being re-evaluated.
Afcom GE Hudson achieved pleasing growth in trading profit while well-controlled
expenses led to improved performance at Buffalo Executape. Vulcan Catering
Supplies achieved acceptable results despite a tight market.
Bidpaper Plus
A solid result was returned in a challenging market, with revenue up 14,4% to
R1,2 billion while trading profit increased 2,9% to R130,3 million. Results
include the contribution of newly acquired Rotolabel and the inflationary effect
of input cost increases.
Products linked to credit transactions were impacted by credit constraints while
businesses also felt the knock-on effects of a retail sector under pressure. A
slow start to the year was followed by a gradual recovery in sales. Strong
improvement was seen in the stationery distribution business following an
aggressive drive for market share by a revitalised Croxley brand. The Rotolabel
acquisition and the consolidation of label factories in Gauteng drove
improvements in the labels and packaging business. Traditional print put in a
weaker performance, though the Cape rationalisation is now complete and related
costs were absorbed in the period. The laser and mail business achieved a
measure of earnings growth. Working capital management remains a focus area.
Bid Auto
Trading profit was negatively impacted by three major factors namely the
prevailing low level of business confidence, a sharp decline in consumer
spending and thirdly, the inability of many customers to obtain vehicle finance.
A trading profit of R214,4 million was recorded, a decline of 39,4% when
compared to the prior year. Revenue was down from R10,0 billion to R8,8 billion.
Motor Retail was severely affected by the decline in new vehicle sales volumes
of 24,2%. Dealership cost structures contain a large element of fixed costs
which require high volume throughput. The sudden and severe decline in sales
gave rise to excessive levels of inventory and a high incidence of discounting
and overtrading. Consequently, our dealerships experienced much reduced trading
margins. Burchmore`s Car Auctions produced pleasing results due to an increase
in bank repossessions and the success of its "wholesale to the public" marketing
programme. The Used Vehicle departments are beginning to show both volume and
margin improvement and our Parts and Service departments continue to produce
strong results.
Due to the much lower than anticipated sales of the vehicle ranges imported from
China, the Value Centre and Value Serve networks incurred substantial losses.
This necessitated the closure of 16 Value Serve outlets and 7 Value Centres at a
cost of R30,3 million. The Import and Distribution business was significantly
impacted by the losses incurred in the importation of these Chinese vehicles due
to the weaker rand and declining sales volumes. Yamaha delivered trading profits
significantly behind those of the prior year. Heavy Equipment continues to grow
and recorded a pleasing result.
Financial Services performed well considering current business conditions. The
Insurance operations were however, negatively affected by the mark-to-market
adjustment of the Equity Portfolio. Increased impairments for doubtful debts
contributed to a poor performance by McCarthy Finance. McCarthy Fleet Solutions
delivered impressive profit growth over the prior year.
Car and Van Rental profitability declined due to an over-fleeted rental market
which resulted in competitor price wars.
Working capital management has been a key focus area, resulting in a
satisfactory reduction in inventory levels. Aligning working capital with
activity levels will remain a priority as do aggressive cost cutting and
efficiency improvements.
Bidvest Namibia
Bidvest Namibia delivered excellent results, buoyed by a strong performance at
the Bidfish division. Namsov in particular benefited from better catches, firmer
prices and a weakening currency. All other businesses performed in line with
expectation. The listing of Bidvest Namibia is anticipated to take place in the
fourth quarter of the calendar year.
Corporate
Bidvest Properties continued to successfully manage and grow its strategic
portfolio.
UK-based Ontime Automotive was impacted by the GBP3,4 million cost of exiting
the volume transport business, rationalisation of depots within Rescue and
Recovery and the wind down of a major Parking Solutions contract. A slowdown in
the prestige vehicle market negatively impacted the Specialist Transport
business.
The associate investment in Enviroserv Limited was sold with effect from
November 2008 for a profit of R391,8 milion.
Prospects
The challenging economic conditions are set to continue as the realities of the
fallout from the global financial crisis takes effect. The Group remains
committed to its decentralised business model as the best foil to the risks
associated with the worldwide economic climate. Our divisions continue to
optimise opportunities across various geographies and industries whilst
remaining focussed on the basic deliverables.
Our balance sheet remains strong and we will continue to seek out strategic
acquisition opportunities.
Our focus remains on improving the management of working capital. In the medium
term the goal is on increasing incremental returns from recent investments. The
current environment is an opportunity to strengthen our skills base as human
capital seeks strength and stability in a volatile market.
The `World Cup effect` is gaining momentum in South Africa as we move closer to
2010. Several opportunities have already been contracted and significant effort
continues to be directed at achieving direct gains.
The economies of the UK and to a lesser extent Europe have slowed considerably.
The UK businesses have taken some hard decisions and we are optimistic the
rationalisation programme undertaken will yield improved results in the medium
term.
In Asia Pacific, we remain confident our Australian and New Zealand businesses
are well placed to gain further market share and entrench their leading market
positions. Our established bases in Hong Kong and Singapore continue to evolve
and remain the springboard to growth in other geographies in the region.
Bid Auto`s markets should benefit from a falling interest rate environment and
the increase in new car prices will improve the returns and demand in the used
vehicle market.
We remain committed to sustained value creation through superior trading
performance and returns improvement, whilst ensuring a prudent capital structure
with appropriate leverage.
Appreciation
The directors and management of Bidvest wish to thank all staff for their
efforts during these challenging times.
The Board wishes to acknowledge the loyal and dedicated service by former
Company Secretary, Mrs MA David and wish to express their condolences to her
family on her passing.
For and on behalf of the Board
MC Ramaphosa B Joffe
Chairman Chief Executive
Distributions
Notice is hereby given that a dividend of 100,0 cents per share will be paid
("dividend") and a capitalisation issue will be awarded in the ratio of 1,0 new
share per 100 shares held ("capitalisation issue"), to shareholders recorded in
the register at the close of business on Friday, March 27 2009. The dividend and
the capitalisation issue ("the distribution") collectively amount to the
equivalent of 190,0 cents per share (2007 - 220,0 cents per share).
The last day to trade "cum" the distribution will be Friday, March 20 2009. The
shares will trade "ex" the distribution as from Monday, March 23 2009, and the
record date will be Friday, March 27 2009. Share certificates may not be
rematerialised or dematerialised during the period Monday, March 23 2009 to
Friday, March 27 2009, both days inclusive. Payment of the dividend will be made
on Monday, March 30 2009. In terms of the capitalisation issue, new shares will
be issued and posted or credited to CSDP or broker accounts on Monday, March 30
2009.
Trading in the Strate environment does not permit fractions and fractional
entitlements. Accordingly where a shareholder`s entitlement to new shares
calculated in accordance with the ratio mentioned above gives rise to a fraction
of a new ordinary share, such fraction will be rounded up to the nearest whole
number where the fraction is greater than or equal to 0.5 and rounded down to
the nearest whole number where the fraction is less than 0.5.
The capitalisation issue may have tax implications for resident as well as non-
resident shareholders. Shareholders are therefore encouraged to consult their
professional advisors should they be in any doubt as to the appropriate action
to take.
In terms of the Companies Act, the directors confirm that after the payment of
the dividend, the company will be able to pay its debts as they become due in
the ordinary course of business, and its consolidated assets, fairly valued,
will exceed its consolidated liabilities.
For and on behalf of the board
DE Cleasby
Company Secretary
Johannesburg
March 02?2009
Basis of presentation of financial statements
The financial statements have been prepared in accordance with the recognition
and measurement requirements of International Financial Reporting Standards
(IFRS) and the presentation and disclosure requirements of IAS34 - Interim
Reporting. The accounting policies are consistent with those of the prior year.
These financial statements have not been reviewed or audited by the Group`s
auditors.
No material events occurred between Decemeber 31?2008 and the date of this
interim report. There has been no material change in the Group`s contingent
liabilities since the last financial year end.
Reclassification
Certain operations have been transferred to other segments. Comparative results
have been restated
Analyst presentation
The presentation to investors will be available on the Bidvest website from
10:00 on March 2?2009.
The Bidvest Group Limited
Incorporated in the Republic of South Africa ("Bidvest" or "the Group" or "the
Company")
Directors
Chairman: MC Ramaphosa
Independent non-executive: DDB Band, S Koseff, D Masson, JL Pamensky, NG Payne,
Adv FDP Tlakula
Non-executive: LG Boyle*, AA Da Costa (alternate LJ Mokoena), MBN Dube, RM
Kunene, T Slabbert
Executive: B Joffe (Chief executive), FJ Barnes*, BL Berson**, MC Berzack, DE
Cleasby, AW Dawe, LI Jacobs, P Nyman, SG Pretorius, LP
Ralphs, AC Salomon
(*British **Australian)
Company Secretary
DE Cleasby
Transfer secretaries
Link Market Services South Africa (Pty) Limited
11 Diagonal Street, Johannesburg, 2001, South Africa
PO Box 4844, Johannesburg, 2000, South Africa
Registered office
Bidvest House, 18 Crescent Drive, Melrose Arch
Melrose, Johannesburg, 2196, South Africa
PO Box 87274, Houghton, Johannesburg, 2041, South Africa
Further information regarding our Group can be found on the Bidvest website
www.bidvest.com
Sponsor: Investec Bank Limited
Date: 02/03/2009 07:05:07 Produced by the JSE SENS Department.
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