| Tue 20 Feb 2001, 0:00 | | The Bidvest Group Limited - Interim Results |
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The Bidvest Group Limited
("the Group")
Interim Results for the Six months Ended December 31st 2000
Headline earnings per sharey 18,2%
Operating income 17,0 %
Income attributable to shareholders 19,3 %
Headline earnings 19,7 %
Satisfactory results despite extremely difficult trading period and weak
economic conditions
Organic growth approximately 15,5%
Commendable results from all South African divisions
Revenue in South Africa grew by 14%
Strong performance from Bidvest plc
Forex licence for Rennies Bank
Acquired strategic stakes in various JSE listed companies
Brian Joffe, Chairman, commented:
"The Bidvest management team has produced quality earnings and excellent
results against a backdrop of extremely difficult trading conditions. Bidvest
has experienced increased economic activity in January and February this year
and management is hopeful that this is the start of an economic recovery and it
is gearing up for growth. Also, growth opportunities in South Africa are still
substantial - the Government is pursuing an investor-friendly programme; it
remains committed to privatisation; and has maintained a disciplined effective
approach to the reduction of its budget deficit and inflation. Bidvest's
investments in areas of information technology will allow it to entrench its
long-term, competitive advantage. The Group remains well placed to respond to
opportunities, both locally and internationally."
20 February, 2001
Enquiries:
The Bidvest Group Limited Tel: + 27 (0) 11 481 4100
Brian Joffe, Chairman Cell: +27 (0) 82 441 2957
Jack Hochfeld Cell: + 27 (0) 82 459 7051
College Hill Johannesburg Tel: + 27 (0) 11 447 3030
Tom Allison
Brendan Templeton
Interim Results for the Six months Ended December 31st 2000
CHAIRMAN'S REVIEW
The Group generated satisfactory results in the face of an extremely difficult
trading period and weak economic conditions, exacerbated by the change in
consumer spending trends. Headline earnings per share increased by 18,2% to
181,6 cents. Operating income increased by 17%, of which approximately 15,5%
was organic growth. The activities of the Group comprise substantially the same
businesses as in the comparable period. It is pleasing to report that each
division in the Group posted commendable results against the backdrop of their
own specific challenges in the economy. Whilst revenue in southern Africa grew
by 14,0%, Group revenue grew by 5,4% as a result, in the United Kingdom, of a
one week shorter trading period and the move away from lower margin
distribution activities to bespoke logistics solutions for customers.
In lieu of a dividend, an interim cash payment of 40 cents per share will be
paid out of share premium and, in addition, a capitalisation issue of shares
will be awarded in the ratio of 0,8631 new shares per 100 shares held, being
equivalent to 41 cents per share. The total value awarded to shareholders is
81 (1999: 72) cents per share.
Bidvest believes that the fundamentals of the South African economy are sound.
The Government is pursuing an investor-friendly programme, remains committed to
privatisation and has maintained a disciplined effective approach to the
reduction of its budget deficit and inflation. Bidvest has experienced
increased economic activity in January and February this year and management is
hopeful that this is the start of an economic recovery and is gearing up for
growth.
The cashflow for the period was affected by the seasonal buy-in, in December in
anticipation of price increases, and stocking up for Back-to-School.
Brian Joffe, the Bidvest Chairman, said: "The quality of the results for this
period was commendable. We believe growth opportunities in South Africa are
still substantial, and the Group is gearing up for growth. The Group, with its
committed management and strong balance sheet, will continue to look for and
exploit opportunities wherever they may arise."
Bidvest remains both entrepreneurial and opportunistic within its individual
business units, and it proudly cherishes and encourages this ethic.
Bidvest plc's strategy is to be invested internationally in distribution,
trading and services businesses supplying the foodservice, hospitality and
leisure markets. The results for Bidvest plc reflect a strong performance,
notwithstanding the subdued trading conditions. Bidvest plc, with its large
capital base, is well placed to take advantage of suitable international
acquisitions in order to secure enhanced procurement benefits, and to provide
international solutions for their customers, while at the same time maintaining
high levels of local service focus. Bidvest plc contributed approximately 15,4%
of the Group's attributable income for the period.
In January 2001, Rennies Bank obtained a foreign exchange licence, which will
enable the bank to absorb the Group's travel-related, foreign exchange
activities.
The Group, through I-Fusion, initiated and created Bidnet, one of the most
modern national network infrastructures in South Africa. Bidvest is already
utilising Bidnet as the backbone of its voice and data platform. Bidnet will
support Bidvest's e-commerce initiative, mymarket.com. Capacity on this
network will be sold to third parties. I-Fusion will be maintained as a
separately listed company with an independent board of directors so as to
ensure its integrity and independence.
mymarket.com will launch into selected, niche segments of the food services and
catering market in June 2001. Trading relationships have been established with
other major corporates implementing electronic procurement solutions in South
Africa.
The Group is committed to being at the forefront of technology. Although this
fundamental strategy will not initially contribute to the Group's operating and
financial performance it will entrench the Group's long-term competitive
advantage.
Bidvest's distribution capacity has been a critical success factor and the
future use of the Internet for e-commerce, together with Bidvest's physical
infrastructure, makes for an interesting, potentially unique, and profitable
combination
DIVISIONAL REVIEW
Bidfreight
Bidfreight produced strong, positive results in a weak trading environment.
Although weakness in the rand boosted turnover in many divisions, it undermined
shipping volumes, which exacerbated the difficulties of trading in a
declining-inflation environment. Opportunities are being pursued to leverage
Bidfreight's capabilities as supply-chain providers and managers.
Bidoffice
Bidoffice generated pleasing results, with a strong performance in the second
quarter, and it is well positioned for the remainder of the year. Waltons and
Kolok were strong drivers. A resurgent performance in the second quarter may
herald a possible turnaround for the furniture division. Efforts to reduce
funds employed are continuing and it is expected the pleasing results will
continue.
Bidpac
Bidpac's performance was undermined by a weak economy, which failed to deliver
on expectations of an upswing and the manufacturing sector was particularly
weak. But focussed cost control and effective asset management resulted in
positive cash generation from all divisions except for Silveray, which was
impacted by seasonal stocking-up. This division will generate significant,
positive cash flows during the second six months of the financial year.
Bidserv
Bidserv proved to be resilient to the downturn in the economy. Strong returns
are expected in the next financial year from Shield Electronics following
substantial capital investment. Bidserv Integrated Service Solutions is up and
running, with initial positive indications.
Caterplus
Caterplus showed strong growth in operating income, particularly from the
frozen division. The fundamentals of the division's operations remain sound,
with good returns and the capacity to take advantage of any upturn in its
markets.
Combined Foods
Bakeries and NCP Yeast performed satisfactorily during the period. Crown was
negatively impacted by inflated red meat prices and outbreaks of foot and mouth
in the first quarter. The second quarter improved and was in line with the
comparative period for the previous year. Management continues to focus and
streamline the business, to overcome the prevailing adverse conditions, and to
grow the business into the future.
Rennies Financial Services
Rennies Financial Services recorded an extremely strong period with buoyant
sales. A full foreign exchange licence was granted in early January 2001
enabling the integration of the travel foreign exchange business into the bank.
Bidvest plc
The results for the period reflected a strong performance, notwithstanding
subdued trading conditions. Attributable income to shareholders' grew by 48%.
The strength of this operating performance is not fully reflected by the 6%
increase in headline earnings per share. The limited increase in earnings per
share is due to the distortion on share weighting arising out of the large
issue of shares following the 9 for 2 rights issue and the repayment of debt in
September 1999. These transactions reduced the growth rate in earnings per
share, but provided a larger capital base from which the Group can grow.
United Kingdom
The results for the period represent a creditable achievement from both the
trading and logistics divisions. Operating margin increased as a result of
management's focus on clear operational improvements. Turnover declined as a
result of a one week shorter trading period and the move to bespoke logistics
solutions for customers.
Australasia
The Australian operations have continued to show improved performance, both as
a result of good organic growth and acquisitions made last year. Operations in
New Zealand performed ahead of expectations.
On January 26 2001, the Group achieved national coverage in New Zealand with
the acquisition of a business with substantial distribution capability on the
South Island.
Empowerment initiatives
In addition to community investment initiatives and continuing efforts to
improve empowerment in its operations, Bidvest has established successful and
sustainable joint ventures with empowerment partners. They are involved as
owner principals and are responsible for the daily operations. This ensures an
active participation by our empowerment partners and delivers real meaning to
the transformation process. The ventures have contributed both to the
communities in which they operate, and to Bidvest's growth.
Opportunities are created to enable previously disadvantaged employees to
prepare themselves to occupy more skilled and responsible positions. The
promotion of education and training opportunities, both internally and
externally, for all employees is a key aspect of this strategy. The Group sees
the acquisition of skills and the provision of career paths as a fundamental
prerequisite for empowerment.
The Bidvest Group Limited
CONSOLIDATED INCOME STATEMENT
Half year ended Year ended
December 31 June 30
2000 1999 % 2000
R000s Unaudited Unaudited Change Audited
Revenue 14,486,254 13,739,553 5.4 26,427,620
Operating income 710,109 606,696 17.0 1,223,660
Net finance income (expense) 3,850 (8,294) 221
Income before taxation 713,959 598,402 19.3 1,223,881
Taxation (162,274) (133,383) (281,667)
Income after taxation 551,685 465,019 18.6 942,214
Income from associates 11,511 12,009 25,623
Outside shareholders'
interest (35,420) (35,983) (73,453)
Headline earnings 527,776 441,045 19.7 894,384
Amortisation of goodwill (1,744) - -
Income attributable to
shareholders 526,032 441,045 19.3 894,384
Number of shares in issue
(weighted 000) 290,674 287,067 288,554
Headline earnings per share
( cents ) 181.6 153.6 18.2 310.0
Earnings per share (cents) 181.0 153.6 17.8 310.0
Dividend per share (cents) 81,0 72.0 12,5 150.3
CONSOLIDATED BALANCE SHEET
December 31 June 30
2000 999 2000
R000s Unaudited Unaudited Audited
ASSETS
Non-current assets 3,196,207 2,766,295 3,054,101
Fixed assets 2,147,088 1,871,187 2,052,281
Goodwill 58,958 - -
Deferred tax 147,514 210,298 166,813
Investments and advances 540,069 586,928 623,986
Banking advances 302,578 97,882 211,021
Current assets 5,527,760 5,417,568 5,013,166
Other current assets 4,847,264 4,842,536 4,277,715
Liquid funds 680,496 575,032 735,451
Total assets 8,723,967 8,183,863 8,067,267
EQUITY AND LAIBILITIES
Capital and Reserves 3,952,802 3,405,804 3,502,595
Shareholders' interest 3,636,230 3,158,785 3,199,823
Outside shareholder's interest 316,572 247,019 302,772
Non- current liabilities 75,850 52,149 146,337
Deferred taxation 32,737 25,271 32,600
Long-term portion of interest
bearing borrowings 22,179 26,878 89,789
Banking liabilities 20,934 - 23,948
Current liabilities 4,695,315 4,725,910 4,418,335
Other current liabilities 4,145,904 4,270,146 4,151,393
Current portion of interest
bearing borrowings 549,411 455,764 266,942
Total equity and liabilities 8,723,967 8,183,863 8,067,267
Number of shares in issue 292,442 289,251 289,638
Net tangible asset value
per share (cents) 1223 1092 1105
The Bidvest Group Limited
CONSOLIDATED CASH FLOW STATEMENT
Half year ended Year ended
December 31 June 30
2000 1999 2000
R000s Unaudited Unaudited Audited
Cash flow from operating activities (9,687) (228,729) 754,566
Operating income 710,109 606,696 1,223,660.00
Depreciation and other non-cash items 190,283 173,137 352,541
Changes in working capital (630,092) (765,852) (293,513)
Cash generated by operations 270,300 13,981 1,282,688
Net finance income (expense) 3,850 (8,294) 221
Taxation paid (127,739) (125,320) (190,638)
Dividends paid - Company (145,977) (97,669) (305,929)
- subsidiaries (10,121) (11,427) (31,776)
Cash effects of investment activities (298,557) (343,405) (1,113,702)
Net additions to fixed assets (259,606) (171,999) (457,800)
Net acquisition of subsidiaries,
trading operations,
associates and investments (38,951) (171,406) (655,902)
Cash effects of financing activities (89,256) 194,778 301,487
Proceeds from shares issued - Company 29,113 9,821 16,364
- subsidiaries 2,273 205,783 219,181
Net borrowings raised (repaid) (120,642) (20,826) 65,942
Net decrease in cash and cash equivalents (397,500) (377,356) (57,649)
Net cash and cash equivalents
at the beginning of the period 536,263 538,197 538,197
Currency adjustments 57,746 22,935 55,715
Net cash and cash equivalents at the
end of the period 196,509 183,776 536,263
- - -
The Bidvest Group Limited
STATEMENT OF CHANGES OF SHAREHOLDERS' INTERESTS
Half year ended Year ended
December 31 June 30
2000 1999 2000
R000s Unaudited Unaudited Audited
Shareholders' interest at the beginning
of the period 3,199,823 3,146,201 3,146,201
Share capital issued 141 142 161
- in terms of the share incentive scheme 61 39 58
- capitalisation issue 80 103 103
Share premium arising on shares issued 29,052 9,782 16,306
- in terms of the share incentive scheme 29,120 9,807 16,338
- costs (68) (25) (32)
Movement on non-distributable reserves 27,239 41,966 67,009
- foreign currency translation reserve 27,239 41,966 61,387
- revaluation of fixed assets - - 5,622
Movement in retained income 379,975 (39,306) (29,854)
- income attributable to shareholders 526,032 441,045 894,384
- dividends and capitalisation issues (146,057) (97,772) (306,032)
- secondry tax on companies - (245) (382)
- goodwill, patents , trademarks and
tradenames written off - (382,334) (617,824)
Shareholders' interest at the end of
the period 3,636,230 3,158,785 3,199,823
- - -
The Bidvest Group Limited
SEGMENTAL ANALYSIS
December 31 %
R000s 2000 1999 Change
REVENUE
Bidfreight 5,921,626 5,144,435 15.1
Bidoffice 1,294,869 1,198,295 8.1
Bidpac 358,760 343,942 4.3
Bidserv 572,716 489,869 16.9
Cater Plus 6,078,563 6,401,345 (5.0)
Local 685,346 641,196 7.5
Foreign 5,389,217 5,760,149 (6.4)
Combined Foods 334,705 336,327 (0.5)
I-Fusion 91,689 0 -
Renfin 217,452 182,103 19.4
Inter Group eliminations (384,126) (356,763) 8.0
14,486,254 13,739,553 5.4
- -
OPERATING INCOME
Bidfreight 164,932 143,265 15.1
Bidoffice 89,796 75,504 18.9
Bidpac 48,667 51,625 (5.7)
Bidserv 49,708 39,030 27.4
Cater Plus 198,896 155,166 28.2
Local 55,014 49,017 12.2
Foreign 143,882 106,149 35.5
Combined Foods 36,324 36,926 (1.6)
I-Fusion (982)
Renfin 41,166 25,948 58.6
Investment and other income 62,949 61,629 2.1
Group properties 18,653 17,603 6.0
710,109 606,696 17.0
- -
