| Mon 29 Aug 2011, 7:05 | | BVT - The Bidvest Group Limited - Audited results for the year ended June 30 |
|
BVT
BVT
BVT - The Bidvest Group Limited - Audited results for the year ended June 30
2011
The Bidvest Group Limited
The Bidvest Group Limited
("Bidvest" or "the Group" or "the Company")
Incorporated in the Republic of South Africa
Registration number: 1946/021180/06
ISIN: ZAE000117321??Share code: BVT
Audited results for the year ended June 30?2011
R118,5 billion
Revenue?7,9% increase
R6,1 billion
Trading profit?9,1% increase
1 157,4 cents
Headline earnings per share?8,2% increase
480,0 cents
Dividends per share?11,1% increase
Consolidated income statement
for the year ended June 30
Percentag
e
R000s 2011 2010 change
Revenue 118 482 736 109 789 207 7,9
Cost of revenue (93 930 (86 778
778) 366)
Gross income 24 551 958 23 010 841 6,7
Other income 451 623 424 725
Operating expenses (18 941 (17 880
920) 870)
Sales and distribution costs (12 541 (12 115
784) 597)
Administration expenses (4 263 910) (4 069 739)
Other costs (2 136 226) (1 695 534)
Trading profit 6 061 661 5 554 696 9,1
Acquisition costs (24 297) (61 202)
Net capital items (189 453) (30 151)
Operating profit 5 847 911 5 463 343 7,0
Net finance charges (644 010) (758 479)
Finance income 69 905 64 408
Finance charges (713 915) (822 887)
Share of profit of associates 98 417 40 983
Dividends received 32 948 30 785
Share of current year 65 469 10 198
earnings
Profit before taxation 5 302 318 4 745 847 11,7
Taxation (1 528 169) (1 301 059)
Current and deferred (1 395 682) (1 298 744)
taxation
Secondary taxation on (132 487) (2 315)
companies
Profit for the year 3 774 149 3 444 788 9,6
Attributable to:
Shareholders of the Company 3 538 748 3 345 175 5,8
Minority shareholders 235 401 99 613
Shares in issue
Total 309 021 319 006
Weighted (`000) 318 665 314 510
Diluted weighted (`000) 319 612 316 439
Basic earnings per share 1 110,5 1 063,6 4,4
(cents)
Diluted basic earnings per 1 107,2 1 057,1 4,7
share (cents)
Headline earnings per share 1 157,4 1 070,0 8,2
(cents)
Diluted headline earnings per 1 153,9 1 063,4 8,5
share (cents)
Dividends per share (cents) 480,0 432,0 11,1
Interim 225,0 207,0
Final 255,0 225,0
HEADLINE EARNINGS
The following adjustments to
profit attributable to
shareholders were taken into
account in the calculation of
headline earnings:
Profit attributable to 3 538 748 3 345 175 5,8
shareholders of the Company
Impairment of property, plant 140 004 41 070
and equipment, goodwill and
intangible assets
Property, plant and 27 027 30 271
equipment
Goodwill 3 571 5 528
Intangible assets 151 521 6 158
Tax relief (42 115) (816)
Minority shareholders - (71)
Net loss on disposal of 84 -
interests in subsidiaries and
disposal and closure of
businesses
Loss on disposal, and 209 (22 331)
reversal of impairment of
investments in associates
Reversal of impairment of - (25 900)
investments in associate
Net loss on change in 209 3 569
shareholding in associates
Net loss on disposal of 9 114 1 208
property, plant and equipment
and intangible assets
Property, plant and 5 642 8 814
equipment
Intangible assets 1 399 1 711
Tax relief (5 760) (4 076)
Minority shareholders 7 833 (5 241)
Headline earnings 3 688 159 3 365 122 9,6
Consolidated statement of other comprehensive income
for the year ended June 30
R000s 2011 2010
Profit for the year 3 774 149 3 444 788
Other comprehensive income (expense) net of
tax
Increase (decrease) in foreign currency 224 774 (675 601)
translation reserve
Decrease in fair value of available-for- (1 732) (12 831)
sale financial assets
Decrease in fair value of available-for- (1 732) (17 877)
sale financial assets before tax
Taxation - 5 046
Total comprehensive income for the year 3 997 191 2 756 356
Attributable to:
Shareholders of the Company 3 765 319 2 661 125
Minority shareholders 231 872 95 231
3 997 191 2 756 356
Segmental analysis
for the year ended June 30
Percentag
e
R000s 2011 2010 change
REVENUE
Bidvest South Africa 59 020 824 51 791 014 14,0
Automotive 18 608 261 15 849 758 17,4
Financial Services 1 676 700 1 474 441 13,7
Electrical 4 100 368 3 978 286 3,1
Freight 19 253 273 15 941 865 20,8
Industrial 1 486 371 1 434 758 3,6
Office 3 684 598 3 497 605 5,3
Paperplus 3 705 374 3 464 184 7,0
Rental and Products 1 730 074 1 576 391 9,7
Services 2 901 383 2 840 059 2,2
Travel and Aviation 1 874 422 1 733 667 8,1
Bidvest Foodservice 59 645 556 58 389 859 2,2
Asia Pacific 19 563 066 17 547 642 11,5
Europe 34 664 912 35 460 797 (2,2)
Southern Africa 5 417 578 5 381 420 0,7
Bidvest Namibia 2 133 749 1 949 205 9,5
Bidvest Corporate 683 238 730 687 (6,5)
Properties 212 270 175 015 21,3
Corporate and investments 470 968 555 672 (15,2)
121 483 367 112 860 765 7,6
Inter Group eliminations (3 000 631) (3 071 558)
118 482 736 109 789 207 7,9
TRADING PROFIT
Bidvest South Africa 3 412 191 3 091 230 10,4
Automotive 255 420 230 787 10,7
Financial Services 641 621 557 604 15,1
Electrical 181 832 193 933 (6,2)
Freight 886 248 794 284 11,6
Industrial 118 445 134 154 (11,7)
Office 215 388 197 274 9,2
Paperplus 325 609 312 629 4,2
Rental and Products 325 872 280 205 16,3
Services 187 577 183 190 2,4
Travel and Aviation 274 179 207 170 32,3
Bidvest Foodservice 2 031 705 2 046 017 (0,7)
Asia Pacific 833 125 729 375 14,2
Europe 842 455 897 771 (6,2)
Southern Africa 356 125 418 871 (15,0)
Bidvest Namibia 540 154 367 891 46,8
Bidvest Corporate 140 263 128 612 9,1
Properties 207 153 176 637 17,3
Corporate and Investments (66 890) (48 025) 39,3
6 124 313 5 633 750 8,7
Share-based payment expense (62 652) (79 054)
6 061 661 5 554 696 9,1
Consolidated condensed statement of cash flows
for the year ended June 30
R000s 2011 2010
Cash flows from operating activities 4 490 872 4 856 127
Operating profit 5 847 911 5 463 343
Dividends from associates 32 948 30 785
Acquisition costs 24 297 61 202
Depreciation and amortisation 1 811 698 1 870 465
Other non-cash items 64 653 (126 545)
Cash generated by operations before 7 781 507 7 299 250
changes in working capital
Changes in working capital 405 727 684 970
Cash generated by operations 8 187 234 7 984 220
Net finance charges paid (559 214) (659 634)
Taxation paid (1 577 (1 166
411) 914)
Distributions by- Company (1 452 (1 267
491) 899)
- subsidiaries (107 246) (33 646)
Cash effects of investment activities (3 877 (4 846
688) 526)
?Net additions to vehicle rental fleet (282 940) (382 822)
?Net additions to property, plant and (2 523 (2 332
equipment 231) 242)
?Net additions to intangible assets (237 389) (140 118)
?Net acquisition of subsidiaries, (834 128) (1 991
businesses, associates and investments 344)
Cash effects of financing activities (735 423) 1 732 990
Proceeds from shares issued - Company - 1 233 119
- subsidiaries - 300 772
Net issue (purchase) of treasury shares (1 426 23 714
546)
Share buy back costs (11 980) -
Net borrowings raised 703 103 175 385
Net increase (decrease) in cash and cash (122 239) 1 742 591
equivalents
Net cash and cash equivalents at the 2 905 453 1 239 538
beginning of the year
Exchange rate adjustment 25 829 (76 676)
Net cash and cash equivalents at end of 2 809 043 2 905 453
the year
Net cash and cash equivalents comprise:
Cash and cash equivalents 4 437 268 4 138 722
Bank overdrafts included in short-term (1 628 (1 233
portion of borrowings 225) 269)
2 809 043 2 905 453
Consolidated statement of financial position
as at June 30
R000s 2011 2010
ASSETS
Non-current assets 21 860 236 19 371 091
Property, plant and equipment 11 603 183 10 367 571
Intangible assets 672 105 651 094
Goodwill 6 354 825 5 709 169
Deferred tax assets 390 792 426 822
Defined benefit pension surplus 111 692 129 850
Interest in associates 684 405 656 865
Investments 1 749 577 1 157 190
Banking and other advances 293 657 272 530
Current assets 25 969 682 23 973 829
Vehicle rental fleet 1 063 371 915 042
Inventories 8 750 609 8 030 752
Short-term portion of banking and other 154 279 350 086
advances
Trade and other receivables 11 564 155 10 539 227
Cash and cash equivalents 4 437 268 4 138 722
Total assets 47 829 918 43 344 920
EQUITY AND LIABILITIES
Capital and reserves 18 456 992 17 392 937
Attributable to shareholders of the 17 669 264 16 736 503
Company
Minority shareholders 787 728 656 434
Non- current liabilities 5 769 111 4 669 207
Deferred tax liabilities 507 505 378 992
Life assurance fund 34 014 13 734
Long-term portion of borrowings 4 391 429 3 448 501
Post-retirement obligations 381 332 394 527
Long-term portion of provisions 272 400 235 253
Long-term portion of operating lease 182 431 198 200
liabilities
Current liabilities 23 603 815 21 282 776
Trade and other payables 16 812 487 15 032 357
Short-term portion of provisions 237 471 251 635
Vendors for acquisition 539 539
Taxation 201 313 364 558
Short-term portion of banking 1 275 897 1 080 366
liabilities
Short-term portion of borrowings 5 076 108 4 553 321
Total equity and liabilities 47 829 918 43 344 920
Net tangible asset value per share 3 444 3 253
(cents)
Net asset value per share (cents) 5 718 5 246
Consolidated statement of changes in equity
for the year ended June 30
R000s 2011 2010
Shareholders` interest
Issued share capital 16 367 17 507
?Balance at beginning of the year 17 507 16 814
?Shares issued during the year - 693
?Cancellation of treasury shares (1 140) -
Share premium 81 258 81 258
Balance at beginning of the year 81 258 228 301
Shares issued during the year - 1 236 462
Refund of share premium to shareholders - (1 379
469)
Share issue costs - (4 036)
Foreign currency translation reserve 248 830 20 527
Balance at beginning of the year 20 527 691 746
Arising during the year 228 303 (671 219)
Statutory reserves 15 894 15 215
Balance at beginning of the year 15 215 13 033
Transfer from retained earnings 679 2 182
Equity-settled share-based payment 391 430 328 640
reserve
Balance at beginning of the year 328 640 253 936
Arising during the year 62 790 74 704
Movement in retained earnings 19 101 358 18 619 202
Balance at beginning of the year 18 619 202 15 206 432
Attributable profit 3 538 748 3 345 175
Change in fair value of available-for- (1 732) (12 831)
sale financial assets
Net dividends paid (1 452 -
491)
Transfer of reserves as a result of (4 331) 82 608
changes in shareholding of subsidiaries
Cancellation of treasury shares and (1 597 -
related costs 359)
Transfer to statutory reserves (679) (2 182)
Treasury shares (2 185 (2 345
873) 846)
Balance at beginning of the year (2 345 (2 481
846) 130)
Purchase of shares by susidiaries (1 581 (24 975)
285)
Shares disposed of in terms of share 154 739 48 689
incentive scheme
Capital invested - 111 570
Cancellation of treasury shares 1 586 519 -
Capital and reserves attributable to 17 669 264 16 736 503
shareholders of the Company
Minority shareholders
Balance at beginning of the year 656 434 368 495
Attributable profit 235 401 99 613
Dividends paid (107 246) (33 646)
Movement in foreign currency translation (3 529) (4 382)
reserve
Movement in equity-settled share-based 60 5 525
payment reserve
Issue of shares in subsidiaries - 300 772
Changes in shareholding 2 277 2 665
Transfer of reserves as a result of 4 331 (82 608)
changes in shareholding of subsidiaries
787 728 656 434
Total equity 18 456 992 17 392 937
Overview
Solid financial results were achieved for the year ended June 30 in the face of
a strong South African currency, poor demand in the construction and hospitality
sectors in South Africa and weak economic activity in a number of geographic
regions in which the Group operates. Headline earnings per share (HEPS)
increased by 8,2% to 1?157,4 cents. Headline results were also impacted by a
R132,0 million increase in the tax charge as a result of Secondary Tax on
Companies on dividends - a charge that had not been incurred in the comparative
year. This reduced HEPS by 3,9%. The overall impact of rand strength versus
sterling and the euro and rand weakness against the Australian dollar was
equivalent to a reduction of 1,3% of HEPS on the translation of the earnings of
foreign operations. Basic earnings per share increased by 4,4% to 1 110,5 cents,
impacted by the write-off of capital items of which the largest part related to
the impairment of an IT project in 3663 Wholesale.
Asia Pacific continued to deliver strong results. Deflation on food products was
evident for a large part of the year, impacting trading margins. Bidvest
Europe`s overall result was lower. Adverse factors included a challenging
economic climate and poor weather. Most business maintained profitability,
however.
Trading conditions in southern Africa showed some improvement, though last-
quarter demand weakened. The corporate market held up relatively well.
Discretionary consumer spending remained under pressure. Activity levels were
weak across businesses exposed to infrastructure, construction and hospitality
sectors. Bidvest continued to invest in infrastructure to ensure medium-term
growth and sustainability. Ongoing focus on asset and cash-flow management
contributed to inventory optimisation and minimised debtor delinquencies. Return
on funds employed (ROFE) remains a core management driver across all regions.
The sale of 13,5% of the equity of Mumbai International Airport Limited for a
profit of between R300,0 million and R400,0 million was not timeously completed
as certain formalities remain outstanding. No accrual has been made for this
profit in the results.
Financial overview
Revenue grew 7,9% to R118,5 billion (2010: R109,8 billion). Gross margin was
largely maintained. Operating expenses were well controlled across the Group,
increasing by 5,9%. Overall trading margin improved slightly to 5,12% (2010:
5,06%), despite a relative increase in revenue from lower margin activities such
as forwarding and clearing and automotive retailing.
Cash generated by operations before working capital changes improved 6,6% to
R7,8 billion. Working capital generation of R0,4 billion was encouraging,
showing the value of ongoing focus on asset management. Over the past two years,
approximately R1,1 billion has been generated through reduced working capital
requirements. Net capital expenditure on property, plant and equipment and
intangibles of R2,8 billion (2010: R2,5 billion) included significant investment
into asset-based leasing and terminal assets.
Net debt increased to R5,0 billion (2010: R3,8 billion), impacted principally by
the R1,6 billion of cash utilised to implement the share buy-back from Dinatla
in May 2011. Ongoing utilisation of the short end of the funding market in South
Africa`s stable interest rate environment was beneficial. Net finance charges
declined 15,1% to R644,0 million, while interest cover improved to 9,1 times
(2010: 7,2 times). The Group retains adequate borrowing capacity. Overall, the
stated financial position remains robust and appropriately valued. Bidvest`s
attitude to gearing remains conservative and is 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.
Strategic realignment of executive management responsibilities
Bidvest faces a wide array of opportunities and challenges in its continuing
pursuit of superior performance for stakeholders. To sharpen the focus of
executive responsibilities and create capacity for expansion, Bidvest announced
in March that Lindsay Ralphs would become managing director of all core South
African operations, excluding food and Bidvest Namibia. Businesses in South
Africa have been realigned into new divisions. Senior positions in the new
structure were all filled by internal staff. Management is encouraged by the
enthusiasm and energy of the new teams.
Black economic empowerment
Bidvest has level 3 BBBEE status, reflecting the efforts of management and staff
to achieve transformation objectives. However, the promotion of black executives
to senior management positions remains the greatest challenge and a key
priority.
In May, the Group concluded a R1,6 billion share repurchase with its broad-based
BEE partners, Dinatla, to give them the certainty of early cash realisation and
facilitate repayment well ahead of settlement obligations in March 2012. Dinatla
remains a shareholder of the Group with unencumbered shares valued in excess of
R2,0 billion. The Group is extremely proud of the value created.
Acquisitions
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 afforded the Group a unique opportunity to acquire a market-leading UK
fresh fish foodservice business with sufficient geographic reach to provide a
solid platform for growth.
Seafood contributed R595,2 million to revenue and R21,7 million to operating
profit for the period, before taking account of the costs arising on the
acquisition.
A number of other smaller acquisitions were also completed during the year.
Divisional review
Bidvest South Africa
Realignment into 10 focused divisions was successfully implemented. Performance
was mixed, reflecting patchy, hesitant recovery and ongoing weak demand in
construction and hospitality. Freight and Rental performed strongly, Travel
staged a good recovery, Automotive optimised opportunities and Paperplus and
Services coped well. Banking operations showed good growth. All teams showed
resilience, driving revenue 14,0% higher to R59,0 billion (2010: R51,8 billion),
while trading profit reached R3,4 billion (2010: R3,1 billion).
Automotive
The dealer-focused division put in a satisfactory performance, with revenue up
17,4% to R18,6 billion (2010: R15,9 billion) while trading profit moved 10,7%
higher to R255,4 million (2010: R230,8 million). The principal driver was new
vehicle sales, which rose 22,1% to 36 269 units, up from 29 697. Used vehicle
sales fell 11,2% from 42 594 to 37 825. Combined volumes were up by 1?803 units.
Volkswagen/Audi remained the top performer.
The rate of industry growth showed signs of slowing and markets remained highly
competitive. New entry level vehicle price deflation continued and margins
narrowed. Trading challenges were compounded by supply difficulties after
strikes in August and September 2010 and following the natural catastrophe in
Japan. Parts and service department profits were impacted by the reluctance to
spend of over-indebted consumers. Lower bank repossessions were negative for
Burchmore`s. ROFE nevertheless improved from 23,1% to 25,1%. Additional closure
costs at Value Centre/Call a Car were absorbed.
Financial Services
An expanded Bidvest Bank performed strongly, with profit before tax up 17,9% to
R388,8 million (2010: R330,0 million). The R650,0 million internal acquisition
of the fleet activities of the Automotive division was successfully integrated.
Assets of R3,6 billion showed 4,7% growth and were well managed. The low credit
loss ratio was maintained while building the loans, advances and leased assets
book by 8,9% to R2,4 billion. Operations were strongly cash generative. Deposits
rose 15,5% from R1,2 billion to R1,4 billion.
Net revenue at Bidvest Financial Services rose by 57,1% to R320,9 million (2010:
R204,3 million) while profit before tax went 44,6% higher to R253,5 million
(2010: R175,3 million). Total assets at the refocused insurance business
increased from R723,6 million to R884,4 million. The Finance business returned
to profit, growing book size to R6,2 billion. Policy volumes grew across all
channels. Product innovation drives boosted growth. A newly created structure,
Yamaha Financial Services, will be implemented in the new year.
Electrical
With the construction industry still in recession, teams did well to retain
market share and maintain revenue at R4,1 billion. Margins were under pressure
as competition intensified and trading profit fell 6,2% to R181,8 million (2010:
R193,9 million). The IT rollout was successfully completed across the wholesale
network, but pushed expenses higher. Efficiencies are coming through following
branch rationalisation. Despite a protracted strike, Atlas achieved record sales
in a shrinking market. Certain regions were hit harder than others, resulting in
some branches returning poor results. Improvements were seen at Voltex Retail.
Waco performed at acceptable levels. Sanlic results were disappointing.
Freight
Bulk commodity businesses led a strong performance in a challenging environment.
Trading profit jumped 11,6% to R886,3 million (2010: R794,3 million) while
revenue moved 20,8% higher to R19,3 billion (2010: R15,9 billion). Challenges
related principally to rail freight bottlenecks and congested harbour and road
infrastructure. Freight teams maximised the opportunity presented by continued
strong commodity demand and improved trade volumes. Capital expenditure of
R314,6 million was committed to improve efficiencies and terminal capacity
utilisation.
High capacity levels underpinned a good IVS performance. The full-year effect of
the expansion of Richards Bay terminal was beneficial. The SABT bulk terminals
business put in an exceptional performance, bolstered by substantial maize
exports. BPO also had an excellent year, thanks to strong fertilizer, soya bean
meal, export pulp and steel volumes. Transport and stevedoring showed good
growth. Rennies Ships Agency maximised opportunities. Bulk Connections was
impacted by operational challenges with rail freight services and higher
rentals.
SACD Freight put in a solid performance, with a pleasing showing by the Durban
operations. The forwarding and clearing operations of Safcor Panalpina
maintained their recovery, though low-margin automotive volumes drove much of
the billings improvement. Rennies Distribution Services had a better year on the
back of new customer gains and good cost and debtors control. Naval was
challenged by falling ferrochrome and granite volumes. Marine Insurance profits
exceeded expectation.
Industrial
Performance was mixed, with revenue up 3,6% to R1,5 billion (2010: R1,4 billion)
while trading profit fell 11,7% to R118,5 million (2010: R134,2 million).
Margins narrowed from 9,3% to 7,9% and ROFE dipped to 23,3%. Asset management
remains a focus area. Pressure on manufacturing due to the weak economy and
effects of the strong rand impacted Afcom, which produced disappointing results.
Berzacks optimised clothing industry opportunities for pleasing growth. The new
Materials Handling operation bedded in well, driving strong growth. Buffalo
Executape took advantage of new markets for an excellent year. Vulcan sales fell
as hospitality demand declined. Yamaha improved off last year`s low base.
Office
Results were mixed. Revenue moved 5,3% higher to R3,7 billion (2010: R3,5
billion) and trading profit rose 9,2% to R215,4 million (2010: R197,3 million).
Technology businesses performed strongly, furniture had a disappointing year and
stationery faced continuing pressure. Restructuring was necessary at Cecil
Nurse. The loss-making furniture division was consolidated and production
activities are to be merged. Dauphin broadened its range and distribution
channels. Contract Stationers was merged into Waltons Gauteng. Konica Minolta
has entered the radiology market.
Paperplus
Revenue rose 7,0% to R3,7 billion (2010: R3,5 billion) while trading profit of
R325,6 million (2010: R312,6 million) was up 4,2% - a satisfactory performance
in challenging industry conditions. Volumes were boosted by Kolok`s inclusion.
ROFE dipped to 31,0% (2010: 32%) and trading margin eased higher, reflecting
continued migration into new technology areas. Technology investment and
acquisition enabled market-share gains in industry growth sectors. Export
successes helped replace one-off volumes related to last year`s World Cup.
Acquisition of nationally represented Sprint Packaging enabled strategic
packaging expansion. Continued investment in digital printing technology
entrenched Lithotech Afric Mail`s sector leadership.
Rental and Products
A highly satisfactory performance took revenue 9,7% higher to R1,7 billion
(2010: R1,6 billion) while trading profit rose 16,3% to R325,9 million (2010:
R280,2 million). The G.Fox industrial products business had a record year,
underpinned by strong growth in Johannesburg and Swaziland. Steiner Hygiene was
another strong performer while good improvement was shown by Pureau and
Execuflora. The Boston laundries business was impacted by low hotel occupancies
and intense garment rental competition resulting in the cost base being
reassessed. Hotel Amenities had a poor year.
Services
Performance varied across the businesses, with revenue rising 2,2% to R2,9
billion (2010: R2,8 billion) while trading profit rose 2,4% to R187,6 million
(2010: R183,2 million). ROFE rose from 36,9% to 49,5%. Cash generation was
strong overall. Prestige cleaning businesses produced excellent results, buoyed
by niche market gains. Magnum performed strongly. Its guarding and vehicle
tracking businesses did well while improvements were delivered by a restructured
technology unit. TMS under-performed. Its business model is being reviewed and
the customer-base broadened. TopTurf revenue fell in a depressed post-World Cup
hotel and resort market.
Travel and Aviation
Excellent results were achieved. Trading profit rose 32,3% to R274,2 million
(2010: R207,2 million) off an 8,1% revenue increase to R1,9 billion (2010: R1,7
billion). Margins were well managed, ROFE rose to 21,0% from 14,0% and cash
generation improved. A re-engineered travel business performed well. Expenses
were stringently managed despite restructuring costs. A reorganised Bidair
Services achieved strong revenue gains while significantly improving cost
efficiency. Premier Lounges invested in improved facilities, attracting higher
passenger volumes. Innovation helped Budget Rent a Car to a better year despite
industry discounting.
Bidvest Foodservice
Performance was in line with managements` expectations, with revenue up 2,2% to
R59,6 billion (2010: R58,4 billion) while trading profit fell marginally to R2,0
billion.
Asia Pacific
Bidvest Australia maintained its strong run, reflecting exceptional effort in
challenging conditions. Trading margins were maintained despite the impact of
natural disasters. The strong Australian dollar put a brake on tourist arrivals,
creating challenges in areas such as Cairns and the Gold Coast. Nationwide
volumes at cafes, restaurants and takeaway food vendors rose slightly, margins
were maintained, primarily through enhanced procurement opportunities, and
expenses well managed. E-commerce channels continued to gain customer acceptance
and M-commerce is growing rapidly following the highly successful introduction
of our online ordering application. The core Foodservice operation capped a good
year with a strong fourth-quarter. Hospitality maintained sales, but at reduced
margins. The Fresh division continued to struggle and Logistics (QSR) came under
increasing pressure after exiting a large low-margin contract.
Bidvest New Zealand performed strongly despite the impact on trading of the
Christchurch earthquake. Employees put in a tremendous effort to help one
another and their communities. Both revenue and trading profit increased while
trading margins were maintained. New distribution centres were built at Tauranga
and Dunedin while Plymouth facilities were expanded. IT upgrades continued. E-
commerce volumes rose to 46,0% of sales. Foodservice was the big driver of
overall performance. Fresh division achieved exceptional sales and profit
growth.
Angliss Singapore exceeded trading profit targets. A strengthening Singapore
dollar proved beneficial in managing imported product prices. A fourth-quarter
economic slowdown was cushioned by record tourist arrivals and strong hotel and
restaurant demand. Angliss Greater China put in a pleasingly strong performance,
with good contributions from the core Hong Kong business as well as the
divisions in Macau and Mainland China.
Europe
In local currencies, trading results were satisfactory with the exception of
Nowaco. Depressed trading conditions in the UK and other national markets
compounded operational and competitive pressures. In December, UK-based Seafood
Holdings (a national fresh fish processor and distributor) was acquired and
added to the strategic product offering. Smaller bolt-on acquisitions were made
in Scotland and Belgium.
A strong second-half performance enabled 3663 Wholesale to achieve trading
profit and sales volume growth, though trading remained under pressure. Ongoing
focus on volume growth in the free trade sector while expanding margins
delivered an improved result. Costs and working capital were well managed.
Planned roll-out of a new ERP system was abandoned in favour of a more cost-
effective solution. Exceptional operational costs, one-off separation costs from
3663 Wholesale and disruptive weather in December contributed to a small loss at
Bidvest Logistics, though volume growth was secured on the back of customer
gains and higher food prices. Significant investment into new distribution fleet
and allied vehicle efficiencies will benefit the business going forward. Seafood
Holdings bedded down well and put in a solid initial performance.
Trading conditions in Europe remained difficult and extremely competitive,
especially in the institutional sector. Deli XL Netherlands secured a slight
trading profit increase through stringent cost and margin management. Working
capital was well managed despite significant stress among certain customers.
Significant capital expenditure continued to be directed towards IT systems
upgrades. Deli XL Belgium achieved reasonable sales growth, but gains tended to
be in low-margin business, impacting gross margin. Trading profit was maintained
at prior year`s levels despite cost increases due to an acquisition in the
horeca segment and growing administrative capacity. Nowaco had a disappointing
year, with trading profit down. Revenue was flat as retail customers traded
down, impacting margins, while a poor summer depressed ice-cream sales. Horeca
volumes showed encouraging signs that customer spend on eating out-of-home was
on the rise. Costs remain well controlled and cash generation was excellent.
Farutex put in a pleasing performance, with volume growth in the independent and
wholesale channels. Further capital expenditure is under way to improve capacity
at four depots. The Middle East businesses continued to grow in a tough market.
Southern Africa
Domestic businesses were impacted by challenging trading conditions and food
deflation. Replacement of World Cup year volumes was a challenge in the face of
consumer belt-tightening and lower discretionary spend. Margin erosion was
severe. However, market-share gains were achieved while efficiency improvements
were secured through technological innovation. Revenue eased 0,7% higher to R5,4
billion (2010: R5,4 billion), but trading profit fell 15,0% to R356,1 million
(2010: R418,9 million). Acquisitive growth continued with the purchase of the
A&S foodservice businesses. By year-end the first signs of improvement in the
restaurant channel suggested consumer pressures may be easing.
Revenue and trading profit were significantly below expectation at Bidvest
Foodservice SA. Loss of a major, low-margin national account contributed to
falling volumes. However, market-share gains were achieved in a highly
competitive environment. Despite margin erosion, the business remained highly
cash generative. Management of funds employed was a focus area. Strict credit
control was maintained. Branch consolidation and the transitioning of operations
into multi-temperature businesses continued along with ERP system integration
across a unified platform.
Bidfood Ingredients grew sales, but margin pressure intensified and trading
profit fell. Margin squeeze across the yeast business was severe while food
deflation in major categories compounded the trading challenge. Cash generation
was strong. Crown Trading and Chipkins Bakery Supplies achieved good volume
growth but low-margin products predominated. Crown Food Ingredients profits
dipped from the prior high base and production volumes fell at Chipkins Bakery
Ingredients.
Speciality faced a challenging year, with profit and revenue down. Expenses were
well controlled. Efforts to widen the customer-base continued.
Bidvest Namibia
The business put in another strong performance, driven by exceptional fishing
results. Revenue rose 9,5% to R2,1 billion (2010: R1,9 billion) with trading
profit 46,8% higher at R540,2 million (2010: R367,9 million). Cash generated by
operations rose 26,2% to R564,6 million. High catch rates and firm prices
underpinned exceptional horse mackerel results, more than compensating for the
effects of a strong rand, lower than expected canned pilchard sales and
disappointing Angolan JV results. Bidcom commercial operations had a
disappointing year. Steps were taken to strengthen management.
Bidvest Corporate
Bidvest Properties completed a number of significant developments, one of which
is the World of Yamaha in Johannesburg. A new office and distribution centre for
Waltons in Durban is close to completion. Ontime Automotive in the UK faced
challenging conditions, particularly in Rescue and Recovery, though Prestige
vehicle distribution put in a pleasing performance winning new contracts.
Further capital was committed to Mumbai International Airport Limited in
accordance with the airport development plan. Passenger volumes continue to
grow.
Prospects
The Board completed its strategic review of the foodservice business following
the receipt of various unsolicited proposals. The proposals highlighted that the
foodservice business is a highly rated and appealing strategic asset. While the
proposals would have realised significant amounts of cash in the short term,
they would not have optimised value nor the strategic medium term benefits that
are likely to flow from the current Group structure.
Demand for delivered wholesale food products in Asia Pacific is expected to
remain buoyant, particularly in Greater China. Activity levels are slowly
improving within the European geographies in which the Group operates.
Realignment of executive responsibilities in South Africa has injected renewed
enthusiasm and energy. This provides the platform for the pursuit of new
opportunities that will take these businesses to the next level of growth.
Economic conditions in South Africa have improved but new challenges have
emerged driven principally by global economic uncertainty. Industries such as
construction and hospitality, casualties of the void subsequent to massive
infrastructural spend linked to the World Cup 2010, are expected to remain
sluggish. The current wave of industrial action adds further strain to the
economic recovery.
Bidvest`s entrepreneurial and decentralised business model remains relevant and
appropriate as the platform for sustained growth. Our businesses are well placed
to trade in the adjusted new economic reality and management is optimistic about
the future.
Asset management and cost efficiency remain focus areas as we drive our
businesses to deliver superior returns from funds employed. Our financial
position is strong. We are well capitalised with ample capacity to fund
expansion. Despite the difficult and volatile economic environments, management
is committed to its philosophy of delivering continued real organic and
acquisitive growth.
MC Ramaphosa B Joffe
Chairman Chief executive
Johannesburg
August 29 ?2011
Dividend
Notice is hereby given that a final cash dividend of 255,0 cents per share, has
been awarded to members recorded in the register of the Company at the close of
business on Friday, September 23 2011.
The salient dates applicable to the cash dividend are as follows:
Last day to trade cum dividend: Friday, September 16 2011
First day to trade ex dividend: Monday, September 19 2011
Record date: Friday, September 23 2011
Payment date: Monday, September 26 2011
The share cannot be dematerialised or rematerialised between Monday, September
19 2011 and Friday, September 23 2011, both dates inclusive.
For and on behalf of the board
CA Brighten
Company secretary
Johannesburg
August 29 2011
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.
Restatement of segmental information
During the year, operations in South Africa were reorganised, resulting in the
creation of new segments and the reorganisation of operations within others. The
comparative year`s segmental results have been restated to reflect these
changes.
The above reorganisation had no impact on the results of the Group as previously
reported, and as such, a restated consolidated financial position for the year
to June 30? 2009 has not been included with this announcement.
Exchange rates
The following principal exchange rates were used in the conversion of foreign
interests and foreign transactions during the years:
June 30 2011 2010
Rand/Sterling
?Closing rate 10,97 11,53
?Average rate 11,18 12,05
Rand/Euro
?Closing rate 9,84 9,34
?Average rate 9,56 10,60
Rand/Australian dollar
?Closing rate 7,25 6,56
?Average rate 6,94 6,71
Audit report
The auditors, Deloitte & Touche, have issued their opinion on the Group`s
financial statements for the year ended June 30?2011. The audit was conducted in
accordance with International Standards on Auditing. They have issued an
unmodified audit opinion. These summarised provisional financial statements
have been derived from the Group`s financial statements and are consistent in
all material respects, with the Group financial statements. A copy of their
audit report is available for inspection at the company`s registered office.
Any reference to future prospects included in this announcement, has not been
reviewed or reported on by the Company`s auditors.
Preparer of financial statements
These condensed consolidated financial statements have been prepared under the
supervision of NEJ Goodwin CA(SA).
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, LP Ralphs, AC Salomon
(*British?**Australian)
Company secretary
CA Brighten
Share transfer secretaries
Computershare Investor Services (Pty) Limited
Registration number 2004/003647/07)
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107?South Africa
Telephone +27 (11) 370 5000
Telefax +27 (11) 688 7717
Registered office
Bidvest House, 18 Crescent Drive
Melrose Arch, Melrose, Johannesburg, 2196
South Africa
PO Box 87274, Houghton,
Johannesburg, 2041
South Africa
Contact details
Telephone +27 (11) 772 8700
Facsimile +27 (11) 772 8970
e-mail investor@bidvest.co.za
Further detailed information regarding our Group can be found on the Bidvest
website:
www.bidvest.com
Date: 29/08/2011 07:05:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
