| Mon 28 Feb 2011, 7:30 | | 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
2010
The Bidvest Group Limited
Incorporated in the Republic of South Africa ("Bidvest" or "the Group" or "the
Company")
Registration number 1946/021180/06
Share code: BVT ISIN: ZAE000117321
Results for the half year ended December 31?2010
Revenue R58,5 billion
+4,2%
Trading profit R2,8 billion
+8,0%
Headline earnings R1,7 billion
+11,3%
Headline earnings per share 539,8 cents
+9,1%
Cash generated by operations R3,6 billion
+4,8%
Distribution per share 225,0 cents
+8,7%
Consolidated income statement
for the Half year ended Year ended
December 31 June 30
2010 2009 % 2010
R`000 Unaudited Unaudited change Audited
Revenue 58 492 467 56 113 097 4,2 109 789 207
Cost of revenue (46 774 301) (44 610 (86 778
298) 366)
Gross income 11 718 166 11 502 799 23 010 841
Other income 286 460 180 418 424 725
Operating expenses (9 179 991) (9 066 804) (17 880
870)
?Sales and (5 990 427) (6 182 358) (12 115
distribution costs 597)
?Administration (2 129 438) (2 043 773) (4 069 739)
expenses
?Other costs (1 060 126) (840 673) (1 695 534)
Trading profit 2 824 635 2 616 413 8,0 5 554 696
?Acquisition costs - (53 416) (61 202)
?Net capital items 11 053 (10 450) (30 151)
Operating profit 2 835 688 2 552 547 11,1 5 463 343
Net finance charges (308 475) (385 599) (758 479)
?Finance income 26 195 36 323 64 408
?Finance charges (334 670) (421 922) (822 887)
Share of profit of 45 661 26 383 40 983
associates
?Dividends received 19 811 16 697 30 785
?Share of current 25 850 9 686 10 198
year earnings
Profit before 2 572 874 2 193 331 17,3 4 745 847
taxation
Taxation (741 126) (597 135) (1 301 059)
?Normal (671 776) (596 119) (1 298 744)
?Secondary tax on (69 350) (1 016) (2 315)
companies
Profit for the 1 831 148 1 596 196 14,7 3 444 788
period
Attributable to:
?Shareholders of 1 729 630 1 543 407 11,8 3 345 175
the Company
?Minority 101 518 52 789 99 613
shareholders
1 831 148 1 596 196 14,7 3 444 788
Shares in issue
?Total 320 306 317 196 319 006
?Weighted (`000) 319 279 312 213 314 510
?Diluted weighted 320 419 314 675 316 439
(`000)
Basic earnings per 541.7 494.3 9,6 1 063.6
share (cents)
Diluted earnings 539.8 490.5 10,1 1 057.1
per share (cents)
Headline earnings 539.8 495.0 9,1 1 070.0
per share (cents)
Diluted headline 537.9 491.1 9,5 1 063.4
earnings per share
(cents)
Distributions per 225,0 207.0 8,7 432.0
share (cents)*
*Includes
distribution from
share premium and
capitalisation
issue
HEADLINE EARNINGS
The following
adjustments to
profit attributable
to shareholders
were taken into
account in the
calculation of
headline earnings:
Profit attributable 1 729 630 1 543 407 11,8 3 345 175
to shareholders of
the Company
Impairment of:
?Property, plant 922 9 304 30 271
and equipment
?Goodwill 2 855 - 5 528
?Intangible assets - 310 6 158
Net loss (profit)
on disposal of:
?Property, plant (13 091) 21 100 8 814
and equipment
?Intangible assets - - 1 711
Net loss on
disposal of
interests in
subsidiaries and
disposal
and closure of - 5 636 -
businesses
Reversal of - (25 900) (25 900)
impairment of
investments in
associate
Net loss (profit) (1 739) - 3 569
on change in
shareholding in
associates
Tax charge (relief) 2 491 (8 513) (4 892)
Minority 2 396 - (5 312)
shareholders
1 723 464 1 545 344 11,3 3 365 122
Consolidated statement of other comprehensive income
for the Half year ended Year ended
December 31 June 30
2010 2009 2010
R`000 Unaudited Unaudited Audited
Profit for the period 1 831 148 1 596 196 3 444 788
Other comprehensive income
(expense)
?Decrease in foreign currency (401 221) (371 375) (675 601)
translation reserve
Increase (decrease) in fair (795) 2 119 (12 831)
value of available-for-sale
financial assets
Increase (decrease) in fair (1 104) 2 943 (17 877)
value of available-for-sale
financial assets before tax
??Taxation 309 (824) 5 046
Total comprehensive income for 1 429 132 1 226 940 2 756 356
the period
Attributable to
?Shareholders of the Company 1 332 766 1 180 394 2 661 125
?Minority shareholders 96 366 46 546 95 231
1 429 132 1 226 940 2 756 356
Segmental analysis
for the
Half year ended Year ended
December 31 June 30
2010 2009 % 2010
R`000 Unaudited Unaudited change Audited
REVENUE
?Bidvest Automotive 9 568 034 8 130 100 17,7 16 688 407
?Bidvest Foodservice 29 210 444 30 361 970 (3,8) 58 389 859
??Europe 17 030 599 18 860 467 (9,7) 35 460 797
??Asia Pacific 9 563 932 8 912 682 7,3 17 547 642
??Southern Africa 2 615 913 2 588 821 1,0 5 381 420
?Bidvest Freight 9 591 776 8 005 679 19,8 15 941 865
Bidvest Industrial 4 367 565 4 334 998 0,8 8 643 601
and Commercial
?Bidvest Namibia 923 017 949 384 (2,8) 1 949 205
?Bidvest Paperplus 1 255 797 1 131 108 11,0 2 091 926
?Bidvest Services 4 504 477 4 098 706 9,9 8 536 853
?Bidvest Corporate 216 242 223 268 (3,1) 444 034
59 637 352 57 235 213 4,2 112 685 750
Inter Group (1 144 (1 122 (2 896 543)
eliminations 885) 116)
58 492 467 56 113 097 4,2 109 789 207
TRADING PROFIT
?Bidvest Automotive 243 655 152 635 59,6 359 532
?Bidvest Foodservice 956 244 1 032 377 (7,4) 2 046 017
??Europe 370 440 447 320 (17,2) 897 771
??Asia Pacific 400 361 370 915 7,9 729 375
??Southern Africa 185 443 214 142 (13,4) 418 871
?Bidvest Freight 399 360 376 519 6,1 794 284
?
Bidvest Industrial 151 024 171 414 (11,9) 421 286
and Commercial
?Bidvest Namibia 220 603 150 022 47,0 367 891
?Bidvest Paperplus 154 236 136 583 12,9 248 311
?Bidvest Services 648 271 515 686 25,7 1 190 578
?Bidvest Corporate 67 996 90 153 (24,6) 205 851
2 841 389 2 625 389 8,2 5 633 750
?Share-based payment (16 754) (8 976) (79 054)
expense
2 824 635 2 616 413 8,0 5 554 696
Consolidated condensed statement of cash flows
for the Half year ended Year ended
December 31 June 30
2010 2009 2010
R`000 Unaudited Unaudited Audited
Cash flows from operating 774 839 1 627 867 4 856 127
activities
?Operating profit 2 855 499 2 569 244 5 532 999
(including dividends from
associates)
?Depreciation and 916 173 941 028 1 870 465
amortisation
?Other non-cash items (150 456) (54 998) (104 214)
?Cash generated by 3 621 216 3 455 274 7 299 250
operations before changes
in working capital
?Changes in working capital (1 006 005) (431 553) 684 970
?Cash generated by 2 615 211 3 023 721 7 984 220
operations
?Net finance charges paid (306 532) (379 615) (659 634)
?Taxation paid (751 060) (405 681) (1 166 914)
?Distributions by- Company (725 113) (598 337) (1 267 899)
?- subsidiaries (57 667) (12 221) (33 646)
Cash effects of investment (1 660 868) (3 344 728) (4 846 526)
activities
?Net additions to vehicle (33 142) (250 982) (382 822)
rental fleet
?Net additions to property, (1 312 553) (1 378 628) (2 332 242)
plant and equipment
?Net additions to (122 014) (49 764) (140 118)
intangible assets
?Net acquisition of (193 159) (1 665 354) (1 991 344)
subsidiaries, businesses,
associates and investments
Cash effects of financing 412 066 2 134 237 993 372
activities
?Proceeds from shares - 1 084 013 1 233 119
issued- Company
- subsidiaries - 305 480 300 772
?Net issue (purchase) of 87 544 (6 173) 23 714
treasury shares
?Net borrowings raised 213 370 951 998 175 385
?Net increase (decrease) in 111 152 (201 081) (739 618)
bank overdrafts
Net increase (decrease) in (473 963) 417 376 1 002 973
cash and cash equivalents
Net cash and cash 4 138 722 3 212 425 3 212 425
equivalents at beginning of
the period
Exchange rate adjustment (112 953) (165 026) (76 676)
Net cash and cash 3 551 806 3 464 775 4 138 722
equivalents at end of the
period
Consolidated statement of financial position
as at December 31 June 30
2010 2009 2010
R`000 Unaudited Unaudited Audited
ASSETS
Non-current assets 19 735 948 19 367 912 19 371 091
?Property, plant and equipment 10 770 264 10 465 714 10 367 571
?Intangible assets 659 488 656 493 651 094
?Goodwill 5 524 899 5 673 794 5 709 169
?Deferred tax asset 447 918 309 094 426 822
?Defined benefit pension 129 850 115 392 129 850
surplus
?Interest in associates 652 530 579 242 656 865
?Investments 1 408 885 1 069 888 1 157 190
?Banking and other advances 142 114 498 295 272 530
Current assets 23 812 631 23 044 858 23 973 829
?Vehicle rental fleet 876 186 858 987 915 042
?Inventories 8 446 739 7 860 914 8 030 752
?Short-term portion of banking 202 310 227 384 350 086
and other advances
?Trade and other receivables 10 735 590 10 632 798 10 539 227
?Cash and cash equivalents 3 551 806 3 464 775 4 138 722
Total assets 43 548 579 42 412 770 43 344 920
EQUITY AND LIABILITIES
Capital and reserves 18 150 811 16 356 030 17 392 937
?Attributable to shareholders 17 447 298 15 733 685 16 736 503
of the Company
?Minority shareholders 703 513 622 345 656 434
Non-current liabilities 4 604 980 5 712 260 4 669 207
?Deferred tax liability 411 324 220 665 378 992
?Life assurance fund 40 469 16 916 13 734
?Long-term portion of 3 357 587 4 609 758 3 448 501
borrowings
?Post-retirement obligations 367 324 439 581 394 527
?Long-term portion of 216 685 211 145 235 253
provisions
?Long-term portion of 211 591 214 195 198 200
operating lease liabilities
Current liabilities 20 792 788 20 344 480 21 282 776
?Trade and other payables 14 219 051 14 049 947 15 032 357
?Short-term portion of 298 193 286 461 251 635
provisions
?Vendors for acquisition 539 - 539
?Taxation 334 351 449 310 364 558
?Short-term portion of banking 1 122 957 848 548 1 080 366
liabilities
?Short-term portion of 4 817 697 4 710 214 4 553 321
borrowings
Total equity and liabilities 43 548 579 42 412 770 43 344 920
Number of shares in issue 320 306 317 196 319 006
Net tangible asset value per 3 516 2 965 3 253
share (cents)
Net asset value per share 5 447 4 960 5 246
(cents)
Consolidated statement of changes in equity
for the Half year ended Year ended
December 31 June 30
2010 2009 2010
R`000 Unaudited Unaudited Audited
Equity
attributable to
shareholders of
the company
Share capital 16 367 17 423 17 507
?Balance at 17 507 16 814 16 814
beginning of
the period
?Shares issued - 609 693
during the
period
?Cancellation (1 140) - -
of treasury
shares
Share premium 81 258 703 546 81 258
?Balance at 81 258 228 301 228 301
beginning of
the period
?Shares issued - 1 137 071 1 236 462
during the
period
?Refund of - (657 884) (1 379 469)
share premium
to shareholders
?Share issue - (3 942) (4 036)
costs
Foreign (375 542) 326 614 20 527
currency
translation
reserve
?Balance at 20 527 691 746 691 746
beginning of
the period
?Total (396 069) (365 132) (671 219)
comprehensive
income for the
period
Statutory 11 940 10 093 15 215
reserves
?Balance at 15 215 13 033 13 033
beginning of
the period
?Transfer from (3 275) (2 940) 2 182
(to) retained
earnings
Equity-settled 345 390 262 838 328 640
share-based
payment reserve
?Balance at 328 640 253 936 253 936
beginning of
the period
?Arising during 16 750 8 902 74 704
the period
Retained 18 039 668 16 840 927 18 619 202
earnings
?Balance at the 18 619 202 15 206 432 15 206 432
beginning of
the period
?Total 1 728 835 1 545 526 3 332 344
comprehensive
income for the
period
?Dividends paid (725 113) - -
?Transfer of (1 152) 86 029 82 608
reserves as a
result of
changes in
shareholding of
subsidiaries
?Cancellation (1 585 379) - -
of treasury
shares
?Transfer from 3 275 2 940 (2 182)
(to) statutory
reserves
Treasury shares (671 783) (2 427 756) (2 345 846)
?Balance at the (2 345 846) (2 481 130) (2 481 130)
beginning of
the period
?Purchase of - (6 173) (24 975)
shares by
subsidiaries
?Shares 87 544 - 48 689
disposed of in
terms of share
incentive
scheme
?Refund of - 59 547 111 570
share premium
received by
subsidiaries
?Cancellation 1 586 519 - -
of treasury
shares
17 447 298 15 733 685 16 736 503
Equity
attributable to
minority
shareholders of
the Company
?Balance at 656 434 368 495 368 495
beginning of
the period
?Total 96 366 46 546 95 231
comprehensive
income for the
period
?Dividends paid (57 667) (12 221) (33 646)
?Share-based 4 74 5 525
payment reserve
?Capital - 305 480 300 772
invested by
minority
shareholders
?Transactions 7 224 - 2 665
with minority
shareholders
?Transfer of 1 152 (86 029) (82 608)
reserves as a
result of
changes in
shareholding of
subsidiaries
703 513 622 345 656 434
Total equity 18 150 811 16 356 030 17 392 937
Comment
Solid results were achieved for the half year ended December 31 in the face of a
strong average South African exchange rate and weak economic activity in a
number of geographic regions in which the Group operates. Headline earnings per
share (HEPS) increased by 9,1% to 539,8 cents per share while basic earnings per
share increased by 9,6% to 541,7 cents per share. The average rand exchange rate
strengthened versus sterling and the euro with negative impact on the
translation of the earnings of foreign operations equivalent to 2,3% of HEPS.
Results were also impacted by a R67,0 million increase in the tax charge as a
result of the Secondary Tax on Companies paid on the 2010 final dividend - a
charge that had not been incurred in the comparative period. This negatively
impacted HEPS by 4,4%.
Deflation on food products was evident in a number of regions, with impact on
trading margins. Operations continued to make gains as they traded aggressively
in competitive markets. Trading conditions in southern Africa have shown some
encouraging signs, particularly in certain sectors of the corporate market.
However, discretionary consumer spending hasn`t fully recovered. Businesses
exposed to South Africa`s infrastructure and construction sectors witnessed
continued decline in activity levels. Bidvest Asia Pacific continues to deliver
strong results. Overall, Bidvest Europe was weaker as a result of the prevailing
economic climate and poor weather conditions.
Operational management`s back-to-basics approach on asset and cash flow
management fostered inventory optimisation while minimising debtor
delinquencies. Generating adequate returns on funds employed across all regions
remains a core philosophy. Bidvest continued to invest in infrastructure to
ensure medium-term growth and sustainability.
Black economic empowerment
Bidvest has been awarded Level 3 BBBEE status, reflecting the efforts of
management and staff to achieve transformation objectives. The promotion of
black executives to senior management positions remains the greatest challenge
and a key priority. The Group is extremely proud of the value created for
Dinatla, our broad-based BEE partner.
Strategic realignment of executive management responsibilities
Bidvest faces a wide array of opportunities and challenges in its continuing
pursuit of superior performance for all stakeholders.
To increase the focus of responsibilities and create capacity for expansion, the
following actions have been taken. Bernard Berson was appointed managing
director of Bidvest Foodservice in 2010. As a further step, Lindsay Ralphs will
now assume the role of managing director for all the core South African
operations, excluding food.
Brian Joffe continues in his role as Group chief executive along with David
Cleasby as the Group finance director. Myron Berzack takes on the new position
of Group strategic director.
Accordingly, certain divisional management reporting lines in South Africa will
change, as and when appropriate.
Acquisition
The Group acquired 100% of the share capital of Seafood Holdings Limited
("Seafood") for an enterprise value of GBP45,0 million, effective January 2011.
Seafood affords a unique opportunity to acquire a market-leading fresh fish
foodservice business in the United Kingdom with sufficient geographic reach to
provide a solid platform for growth.
Financial overview
Revenue grew 4,2% to R58,5 billion (2009: R56,1 billion). Operating expenses
remained a key focus area and were well controlled across the Group increasing
by 1,3%. Overall trading margin improved slightly to 4,8% (2009: 4,7%) despite a
relative increase in the revenue mix of lower margin operations such as
forwarding and clearing and automotive retailing.
Cash generated by operations before working capital changes improved 4,8% to
R3,6 billion. Working capital absorption of R1,0 billion is a result of normal
seasonal demands and increased requirements as the businesses return to growth.
Our balance sheet remains robust and appropriately capitalised. Net debt
increased to R4,6 billion (June 2010: R3,7 billion), driven principally by the
increase in working capital. Interest cover improved from 6,8 times in 2009 to
9,2 times, reflecting adequate borrowing capacity. Net finance charges declined
20,0% to R308,5 million. Adequate exposure to the short end of the funding
market in South Africa`s stable interest rate environment was also beneficial.
Bidvest`s attitude to gearing remains conservative and appropriate in the
current climate. In December, Fitch Ratings affirmed the Group national rating
at A+ with a positive outlook. Moody`s continue to rate the Group at A1.za with
a stable outlook.
Divisional review
Bidvest Freight
Good trading levels lifted revenue to R9,6 billion (2009: R8,0 billion), though
trading profit of R399,4 million (2009: R376,5 million) did not match revenue
growth following an accounting charge required as a result of its lease
extensions.
Performance was bolstered by a turnaround at Safcor Panalpina and another
excellent performance by the bulk terminals businesses.
SABT had a good half-year, driven by volume gains, particularly maize exports.
IVS did well though revenue was under pressure. Costs were well managed. BPO
performed well on the back of a strong second quarter and volume improvements
across the business, notably steel through the port of Durban. Continuing rail
challenges leading to lower throughput and higher rentals negatively impacted
Bulk Connections. SACD had an improved first half, with the new Cape Town
facility showing higher utilisation. Safcor Panalpina increased revenue on the
back of improved volumes and controlled expenses. Rennies Distribution Services
performed much better as a result of higher volumes and expansion of the
business. Naval benefited from an increase in sized coal handling. Manica
disappointed, recording a small loss.
Bidvest Services
Good trading was experienced, with revenue up 9,9% to R4,5 billion (2009: R4,1
billion) while trading profit rose 25,7% to R648,3 million (2009: R515,7
million). Asset management and expense control remained efficient, improving
overall returns. Budget Car and Van Rental (ex-Bidvest Automotive) was
transferred into Bidvest Services following a management realignment.
Volumes across Bidtravel improved and overall results were good, despite
significant restructuring costs. Prestige again returned excellent results as
2010 FIFA World CupTrade Mark benefits came through. TMS faced continuing
challenges.
Steiner maintained its run of good results with returns at record levels. Cost
control remains a priority. The business benefited from the strong rand. Laundry
operations felt the impact of low hotel occupancies and rising utility costs. In
spite of this, a satisfactory result was returned. Industrial Products performed
strongly. Giant Clothing in Swaziland did well, driving up production volumes
and quality standards.
Konica Minolta SA revenue showed a pleasing recovery, but a strong yen kept
pressure on margins. Oce benefited from rand strength versus the euro and
produced excellent results. Magnum returned strong results as guarding
activities prospered. Magnum Technology (formerly Provicom) was restructured and
fully integrated into Magnum. Global Payment Technologies was bolstered by good
product sales. Service revenue was also up.
Bidair showed continued improvement as the ramp division drew benefit from its
restructure. Express Air Services did especially well. Low volumes in the hotel,
landscaping and sports sectors impacted Greens division, though Pureau and
Execuflora performed strongly.
Bidvest Bank performed well in a difficult market. Significant growth in revenue
was achieved through diversification of its asset base. Bidprocure made
continued progress with the Buy Bidvest project. The Budget Car and Van Rental
business model is under review to enable improved returns.
Bidvest Foodservice
Revenues of R29,2 billion (2009: R30,4 billion) reflect continuing pressure on
consumers in both the out-of-home eating and institutional sectors and the
impact of the translation of the earnings of foreign businesses into rands.
Margin squeeze and downtrading impacted trading profit, which eased lower to
R956,2 million (2009: R1?032,4 million). Trading challenges were particularly
acute in Europe. Pressure also mounted in southern Africa. Asia Pacific showed
continuing resilience, with pleasing performance in the core Australian and New
Zealand markets and further gains in Asia.
Asia Pacific
Asia Pacific returned generally pleasing results. The Australian business put in
a good performance in the face of challenging conditions, most notably deflation
in Australia. Bidvest Australia continues to gain market share and revenue
benefited from both acquisitive and organic growth. The Logistics (QSR) team did
particularly well. A Sydney facility was acquired for A$10,0 million to house
both Logistics and Foodservice. Continued growth of the Australian business is
projected, though challenges continue. Bidvest New Zealand recorded satisfactory
results, despite disappointing levels of consumer spending in December.
Earthquakes in the South Island were another negative factor. Even so, forward
momentum was maintained following gains of new National Account business and
growth of the Prime Vendor customer-base. Foodservice showed continued
improvement, Fresh saw good growth and Logistics did well.
Singapore registered growth on prior year, with a particularly pleasing
contribution from Foodservice. Hotel sector opportunities were optimised. The
export team also did well. Greater China`s performance was buoyed by robust
domestic demand and a strong performance by Hong Kong, which enjoyed a record
second quarter. Good progress in mainland China prepares the way for extension
of the base into provinces such as Xian, Cheungsa, Wuhan, Naming and Hainamdao.
Europe
Europe faced challenges in all national markets. Severe winter weather in
December exacerbated trading difficulties. In the UK, a recovery at 3663
Wholesale stalled in December`s ice and snow. Costs and credit extension were
well controlled. ROFE showed pleasing improvement. Bidvest Logistics achieved
some sales growth, but cost pressure severely impacted performance.
Deli XL Netherlands returned flat results as local consumption showed no sign of
recovery. Margin pressure increased in the institutional and catering segments.
Deli XL Belgium was also impacted by tough economic conditions, with more to
come as the country braces itself for an austerity budget. Horeca Trade in the
UAE achieved growth on the prior year while Al Diyafa, the start-up JV in Saudi
Arabia, made a pleasing profit. Nowako in Czech Republic and Slovakia was
impacted by pressure on sales and margins as unemployment rose and people`s pay
fell. Market-share gains in the hotel, restaurant and catering segment offset
some of the effects of lower household spending in the retail sector. Overheads
were well controlled. Farutex Poland returned pleasing results as sovereign
financial reform has been delayed and the national economy continues to perform
relatively well.
Southern Africa
Foodservice SA faced market contraction following the 2010 FIFA World CupTrade
Mark. Trading challenges were compounded by deflation across several categories,
down-trading, price resistance by indebted consumers and continuing pressure on
hotels, restaurants and industrial caterers. Foodservice SA was impacted by
these macro conditions and the loss of a major national logistics account in
October 2010. Efforts to secure replacement volumes were bearing fruit by year-
end. Volumes in the industrial catering channel faced particular pressure. The
leisure segment made a festive season revival, but business failures are a
continuing concern. Market-share gains were achieved with national accounts and
expenses were well controlled.
Bidfood Ingredients achieved revenue growth in some areas of the business, but
deflation across major product categories impacted overall trading results.
Crown Foods and Chipkins Bakery Supplies managed a measure of growth and the
Chipkins Bakery factory maintained its strong recovery. NCP performed below the
comparative period due to higher input costs and competitive pricing pressure.
Asset management was satisfactory and strong cash generation was maintained.
Speciality put in a good performance in tough trading conditions. Pleasing
revenue growth was achieved despite the loss of certain agencies.
Bidvest Industrial and Commercial
The business was impacted by a weak trading environment and the knock-on effects
of a big decline in government tenders. Revenue of R4,4 billion (2009: R4,3
billion) was flat while trading profit fell 11,9% to R151,0 million (2009:
R171,4 million).
Low levels of construction activity were negative for Electrical Wholesale.
Expense control was rigorous in the face of rising transport and personnel costs
and ERP implementation. The copper price has firmed and stock levels have moved
higher. Energy-related project delays impacted Voltex Solutions.
Performance at Stationery and Furniture was disappointing though operating
expenses were well managed. Cash flow improved. Revenue was flat at Waltons, but
the brand enjoyed some success in protecting margins. Efforts to extract costs
from certain regions have begun to bear fruit. Specialised Filing secured
pleasing growth.
Rand strength and reduced product incentives impacted Kolok. CN Business
Furniture recorded another trading loss despite aggressive restructuring and
expense management. Further remedial action is under way under the new managing
director. Seating has exited over-traded sectors of the market in an effort to
restore profitability. Dauphin performed well, boosted by increased project
work.
Volumes dipped at Afcom, but cash flow remained robust despite the effects of
rand strength. Buffalo Executape did well, securing higher sales while
increasing ROFE. Results at Vulcan Supplies were disappointing impacted by lower
hospitality activity levels, the aftermath of the 2010 FIFA World CupTrade Mark.
Materials Handling exceeded expectation.
Bidvest Paperplus
Though operational results were mixed, overall performance was pleasing, revenue
rising 11,0% to R1,3 billion (2009: R1,1 billion) while trading profit moved
12,9% higher to R154,2 million (2009: R136,6 million). Teams did well to
optimise a sudden demand uptick late in the period. Acquisition of Sprint
Packaging strengthened the labels and packaging business and proved results-
enhancing. ROFE rose and cash generation improved. General print demand remained
low. A strong rand helped contain input costs, but constrained export
activities. Lithotech Labels and Rotolabel performed relatively well in tough
trading conditions. Wholesale Stationery Distribution had a good back-to-school
season. The PWS business was rationalised. Its Johannesburg and Durban
warehouses were closed. Personalisation and Mail continued its good run while
shifting to a full-colour offering. Contract retention is good and Lithotech
Afric Mail again won the SARS tender. Print Sales and Distribution recovered in
the second quarter following a disappointing start to the year. Electronic
billing continues to grow and Alternative Products put in another good showing.
Bidvest Automotive
Much improved trading conditions were experienced, with revenue up 17,7% to R9,6
billion (2009: R8,1 billion) while trading profit rose 59,6% to R243,7 million
(2009: R152,6 million). Budget Car and Van Rental was transferred to Bidvest
Services following a management realignment.
McCarthy Motor group maintained its robust recovery, deriving continued benefit
from recent restructuring. Revenue was above expectation and trading profit
showed strong growth. Performance was driven by a significant improvement in new
vehicle sales. The new car market has rebounded strongly - showing 30% industry
growth in 2010 - while finance approvals from the banks have continued their
slow improvement. The trading environment remained extremely competitive,
however.
Challenges relate to an increasingly sluggish used-vehicle market and a decline
in after-sales volumes, a reflection of the shrinking vehicle population and on-
going pressure on disposable income. The used-vehicle contribution was adversely
affected by the bulk release of vehicles from Budget Car and Van Rental,
following the 2010 FIFA
World CupTrade Mark.
Most franchises recorded encouraging results. Previous loss-making operations,
namely Peugeot/Citroen and Inyanga Motors were turned around. Pleasing
contributions came from VW/Audi and Mercedes Benz. Burchmore`s performance was
disappointing, reflecting low levels of floor and auction activity. Bank
repossessions were at an all-time low. Five under-performing Call-a-Car
dealerships and one Value Centre dealership were closed.
Working capital management remains a priority. Inventory levels and debtor
balances came down while ROFE improved. Management continues its focus on
dealerships that under-perform.
Bidvest Financial Services performed well. Policy sales were robust and
penetration levels high - the result of focused marketing. McCarthy Finance, our
JV with Wesbank, saw a welcome return to profit. The development of new
distribution channels in line with the revised business strategy is going well.
Marketing on Google has begun. Investment income from the JSE exceeded
expectations.
Yamaha Distributors continued to experience volume pressure as the higher degree
of consumer confidence failed to translate into an improvement in the leisure
market in the lead up to the calendar year end. Margins, however, showed some
improvement and debtors remain well controlled. Stock levels reduced by R22
milllion during the six month period, and by R44,7 million year-on-year. In mid-
December, occupation began of Gauteng`s World of Yamaha facility.
Bidvest Namibia
A pleasing performance was recorded with trading profit of R220,6 million (2009:
R150,0 million) 47,0% higher. Results were underpinned by a strong BidFish
performance. Strong demand for horse mackerel, high catch rates and the recovery
of Namibian marine resources more than compensated for the effects of local
currency strength, lower than expected canned pilchard sales and under-
performance in Angola. Profit on the sale of MFV Mars further strengthened
results. BidCom had a disappointing first half, impacted by lower activity
levels in key sectors, an absence of oil rig repair work and contract losses.
Corporate
Bidvest Properties took advantage of market conditions to realise profits on the
disposal of two buildings while purchasing land in Durban earmarked for Waltons.
Ontime Automotive in the UK faced challenging conditions, though Prestige
vehicle distribution put in a pleasing performance, winning contracts from
McLaren and Lamborghini. Further investment was made into Mumbai International
Airport Limited, which continues to benefit from growing passenger volumes.
Directorate
Mr SG Pretorius will retire from the board with effect from March 1?2011. The
board expresses its gratitude to Mr Pretorius for his contribution to the Group.
Prospects
Economic conditions in most of the geographies in which Bidvest operates have
improved, resulting in higher activity levels, however, the European landscape
is likely to remain weak. The underlying threat of inflation and the potential
for rising interest rates present both opportunity and risk for trading
operations. Our businesses have adjusted to the new economic reality. Management
is acutely aware that innovation and service hold the key to future success.
Realignment of executive responsibilities caters for succession, renews
enthusiasm and provides new opportunities for the Group to achieve the next
quantum leap in growth. Bidvest remains committed to its entrepreneurial and
decentralised business model as the platform for achieving sustained growth.
Management are optimistic about future business opportunities, which should
enable a step up in growth rates and higher returns.
Our balance sheet is well capitalised with ample capacity to fund expansion
activities. We retain our appetite and desire for further strategic acquisition
opportunities. Working capital management remains a focus area as a means to
delivering acceptablereturns from funds employed. Going forward, we remain
confident of an improving trading environment.
For and on behalf of the board
MC Ramaphosa B Joffe
Chairman Chief executive
Dividend
Notice is hereby given that an interim cash dividend of 225,0 (2009: a
distribution out of share premium: 207,0) cents per share, has been awarded to
members recorded in the register of the Company at the close of business on
Friday, April 1?2011.
The salient dates applicable to the cash distribution are as follows:
Last day to trade cum distribution Friday, March 25?2011
First day to trade ex distribution Monday, March 28?2011
Record date Friday, April 1?2011
Payment date Monday, April 4?2011
Share certificates may not be rematerialised or dematerialised during the period
Monday, March 28?2011 to Friday, April 1?2011, both days inclusive.
Shareholders are advised the payment of the interim cash dividend will attract
seconday tax on companies at a rate of 10%.
For and on behalf of the board
CA Brighten
Company secretary
Johannesburg
February 28?2011
Exchange rates
The following exchange rates were used in the conversion of foreign interests
and foreign transactions during the periods:
December 31 June 30
2010 2009 2010
Rand/Sterling
Closing rate 10,28 11,81 11,53
Average rate 11,18 12,57 12,05
Rand/euro
Closing rate 8,81 10,62 9,34
Average rate 9,45 11,15 10,60
Rand/Australian dollar
Closing rate 6,76 6,62 6,56
Average rate 6,74 6,67 6,71
Basis of presentation of financial statements
These condensed financial statements have been prepared in accordance with the
framework concepts and the measurement and recognition requirements of
International Financial Reporting Standards ("IFRS"), the interpretations
adopted by the International Accounting Standards Board, South African
interpretations of Generally Accepted Accounting Practice and include disclosure
as required by IAS 34: Interim Financial Reporting.
The financial statements have been prepared using accounting policies that
comply with IFRS and which are consistent with those applied in the preparation
of the financial statements for the year ended June 30?2010. The Group has,
however, adopted the following new and modified standards and interpretations,
in response to changes to IFRS: IAS 39 (revised) - Financial instruments:
recognition and measurement, IAS 24 (revised) - Related party disclosure, IAS 32
(revised) - Financial instruments: presentation, IFRIC 14 - The limit on a
defined benefit asset, minimum funding requirements and their interaction, and
IFRIC 19 - Extinguishing financial liabilities with equity instruments.
The adoption of the new and modified standards and interpretations has had no
impact on the Group`s results.
During the period the Budget Car and Van Rental business, previously included
with Bidvest Automotive, has been reallocated to Bidvest Services segment. The
comparative period`s results have been restated to reflect this change.
Directors
Chairman: MC Ramaphosa
Independent non-executive: DDB Band, LG Boyle*, MBN Dube, S Koseff, NP Mageza, D
Masson, JL Pamensky, NG Payne, Adv FDP Tlakula
Non-executive: FJ Barnes*, AA Da Costa (alternate LJ Mokoena), RM Kunene, T
Slabbert
Executive: B Joffe (Chief executive), BL Berson**, MC Berzack, DE Cleasby, AW
Dawe, LI Jacobs, P Nyman, SG Pretorius, LP Ralphs, AC Salomon
(*British?**Australian)
Company secretary
CA Brighten
Transfer secretaries
Link Market Services South Africa (Pty) Limited
11 Diagonal Street, Johannesburg 2001, 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
Date: 28/02/2011 07:30:00 Produced by the JSE SENS Department.
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