| Mon 27 Feb 2012, 7:05 | | BVT - The Bidvest Group Limited - Results for the half year ended December 3 |
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BVT
BVT
BVT - The Bidvest Group Limited - Results for the half year ended December 3
2011
THE BIDVEST GROUP LIMITED
("Bidvest")
(Registration number 1946/021180/06)
Share code: BVT
ISIN ZAE000117321
Results for the half year ended December 3 2011
Revenue +15,1%
R67,3 billion
Trading profit +14,9%
R3,2 billion
Normalised headline earnings per share* +13,6%
613,4 cents
Normal dividend per share +24,4%
280,0 cents
Special dividend per share (cents) 80,0
Consolidated income statement
for the Half year ended Year ended
December 31 June 30
2011 2010 Percentag 2011
e
R000s Unaudited Unaudited change Audited
Revenue 67 344 875 58 492 467 15,1 118 482
736
Cost of revenue (54 204 (46 774 (93 930
077) 301) 778)
Gross income 13 140 798 11 718 166 24 551 958
Other income 339 958 286 460 451 623
Operating expenses (10 234 (9 179 991) (18 941
175) 920)
Sales and (6 587 742) (5 990 427) (12 541
distribution costs 784)
Administration (2 398 940) (2 129 438) (4 263
expenses 910)
Other costs (1 247 493) (1 060 126) (2 136
226)
Trading profit 3 246 581 2 824 635 14,9 6 061 661
Profit on 399 100 - -
partial sale of
investment in
Mumbai
International
Airport Private
Limited
Acquisition (1 405) - (24 297)
costs
Net capital (101 303) 11 053 (189 453)
items
Operating profit 3 542 973 2 835 688 24,9 5 847 911
Net finance (368 482) (308 475) (644 010)
charges
Finance income 39 997 26 195 69 905
Finance charges (408 479) (334 670) (713 915)
Share of profit of 23 504 45 661 98 417
associates
Dividends 20 054 19 811 32 948
received
Share of current 3 450 25 850 65 469
year earnings
Profit before 3 197 995 2 572 874 24,3 5 302 318
taxation
Taxation (846 751) (741 726) (1 528
169)
Current and (767 776) (672 376) (1 395
deferred taxation 682)
Secondary (78 975) (69 350) (132 487)
taxation on
companies
Profit for the 2 351 244 1 831 148 28,4 3 774 149
period
Attributable to:
Shareholders of 2 199 663 1 729 630 27,2 3 538 748
the Company
Minority 151 581 101 518 235 401
shareholders
2 351 244 1 831 148 28,4 3 774 149
Shares in issue
Total (`000) 310 706 320 306 309 021
Weighted (`000) 309 462 319 279 318 665
Diluted weighted 310 708 320 419 319 612
(`000)
Basic earnings per 710,8 541,7 31,2 1 110,5
share (cents)
Diluted basic 708,0 539,8 31,2 1 107,2
earnings per share
(cents)
Headline earnings 742,3 539,8 37,5 1 157,4
per share (cents)
Diluted headline 739,3 537,9 37,4 1 153,9
earnings per share
(cents)
Normalised 613,4 539,8 13,6 1 153,9
headline earnings
per share (cents)
Normal dividends 280,0 225,0 24,4 480,0
per share (cents)
Special dividend 80,0
per share (cents)
HEADLINE EARNINGS
The following
adjustments to
profit
attributable to
shareholders were
taken into account
in the calculation
of headline
earnings and
normalised
headline earnings:
Profit 2 199 663 1 729 630 27,2 3 538 748
attributable to
shareholders of
the Company
Impairment of 9 829 3 519 140 004
property plant and
equipment;
goodwill and
intangible assets
Property, plant 8 146 922 27 027
and equipment
Goodwill 4 127 2 855 3 571
Intangible - - 151 521
assets
Tax relief (2 444) (258) (42 115)
Net loss (profit) (4 948) - 84
on disposal of
interests in
subsidiaries and
disposal and
closure of
businesses
Loss (profit) on 92 226 (1 739) 209
disposal, and
impairment of
investments in
associates
Impairment of 96 700 - -
investments in
associate
Net loss (4 474) (1 739) 209
(profit) on change
in shareholding in
associates
Net loss (profit) 425 (7 946) 9 114
on disposal of
property, plant
and equipment;and
intangible assets
Property, plant 1 752 (13 091) 5 642
and equipment
Intangible - - 1 399
assets
Tax relief (708) 2 749 (5 760)
Minority (619) 2 396 7 833
shareholders
Headline earnings 2 297 195 1 723 464 33,3 3 688 159
Profit on partial (399 100) - -
sale of investment
in Mumbai
International
Airport Private
Limited
Normalised 1 898 095 1 723 644 10,1 3 688 159
headline earnings*
Consolidated statement of other comprehensive income
for the Half year ended Year
ended
December 31 June 30
2011 2010 2011
R000s Unaudited Unaudited Audited
Profit for the period 2 351 244 1 831 148 3 774 149
Other comprehensive income
(expense)
Increase (decrease) in foreign 994 546 (401 221) 224 774
currency translation reserve
Increase (decrease) in fair 3 502 (795) (1 732)
value of available-for-sale
financial assets
Increase (decrease) in fair 3 502 (1 104) (1 732)
value of available-for-sale
financial assets before
taxation
Taxation - 309 -
Total comprehensive income for 3 349 292 1 429 132 3 997 191
the period
Attributable to:
Shareholders of the Company 3 188 070 1 332 766 3 765 319
Minority shareholders 161 222 96 366 231 872
3 349 292 1 429 132 3 997 191
Segmental analysis
for the Half year ended Year ended
December 31 Percentage June 30
R000s 2011 2010 change 2011
REVENUE
Bidvest Commercial 32 183 29 263 10,0 59 012 709
Division 815 381
Bidvest Automotive 10 363 9 114 998 13,7 18 608 261
506
Bidvest Electrical 2 128 379 2 000 741 6,4 4 100 368
Bidvest Financial 815 793 828 090 (1,5) 1 676 700
Services
Bidvest Freight 10 467 9 591 776 9,1 19 253 273
620
Bidvest Industrial 775 245 773 781 0,2 1 486 371
Bidvest Office 2 092 138 1 845 825 13,3 3 684 598
Bidvest Paperplus 1 984 934 1 916 514 3,6 3 705 374
Bidvest Rental and 989 361 840 102 17,8 1 703 084
Products
Bidvest Services 1 542 097 1 498 830 2,9 2 928 372
Bidvest Travel and 1 024 742 852 724 20,2 1 866 308
Aviation
Bidvest Food 35 002 29 210 19,8 59 645 556
Division 381 444
Asia Pacific 11 716 9 563 932 22,5 19 563 066
677
Europe 20 322 17 030 19,3 34 664 912
808 599
Southern Africa 2 962 896 2 615 913 13,3 5 417 578
Bidvest Namibia 1 254 771 923 017 35,9 2 133 749
Bidvest Corporate 364 674 343 924 6,0 691 354
68 805 59 740 15,2 121 483
641 766 368
Inter Group (1 460 (1 248 (3 000
eliminations 766) 299) 632)
67 344 58 492 15,1 118 482
875 467 736
TRADING PROFIT
Bidvest Commercial 1 814 321 1 597 754 13,6 3 408 280
Division
Bidvest Automotive 187 142 108 134 73,1 255 420
Bidvest Electrical 69 957 59 916 16,8 181 832
Bidvest Financial 328 291 348 740 (5,9) 641 621
Services
Bidvest Freight 439 619 399 360 10,1 886 248
Bidvest Industrial 49 232 62 223 (20,9) 118 445
Bidvest Office 141 150 99 641 41,7 215 388
Bidvest Paperplus 186 213 172 776 7,8 325 609
Bidvest Rental and 171 596 146 397 17,2 320 259
Products
Bidvest Services 94 311 95 038 (0,8) 193 190
Bidvest Travel and 146 810 105 529 39,1 270 268
Aviation
Bidvest Food 1 064 283 956 244 11,3 2 031 705
Division
Asia Pacific 495 371 400 361 23,7 833 125
Europe 378 987 370 440 2,3 842 455
Southern Africa 189 925 185 443 2,4 356 125
Bidvest Namibia 314 401 220 603 42,5 540 154
Bidvest Corporate 95 375 66 788 42,8 144 174
3 288 380 2 841 389 15,7 6 124 313
Share-based (41 799) (16 754) (62 652)
payment expense
3 246 581 2 824 635 14,9 6 061 661
Consolidated condensed statement of cash flows
for the Half year ended Year
ended
December 31 June 30
2011 2010 2011
R000s Unaudited Unaudited Audited
Cash flows from operating 361 247 774 839 4 490 872
activities
Operating profit 3 542 973 2 835 688 5 847 911
Dividends from associates 20 054 19 811 32 948
Acquisition costs 1 405 - 24 297
Depreciation and 981 822 916 173 1 811 698
amortisation
Other non-cash items (574 764) (150 456) 64 653
Cash generated by operations 3 971 490 3 621 216 7 781 507
before changes in working
capital
Changes in working capital (1 637 020) (1 006 405 727
005)
Cash generated by operations 2 334 470 2 615 211 8 187 234
Net finance charges paid (366 084) (306 532) (559 214)
Taxation paid (736 283) (751 060) (1 577
411)
Dividends paid by- Company (794 809) (725 113) (1 452
491)
- subsidiaries (76 047) (57 667) (107 246)
Cash effects of investment (1 043 847) (1 660 (3 877
activities 868) 688)
Net additions to vehicle (320 126) (33 142) (282 940)
rental fleet
Net additions to property, (1 093 543) (1 312 (2 523
plant and equipment 553) 231)
Net additions to intangible (137 692) (122 014) (237 389)
assets
Net disposal (acquisition) 507 514 (193 159) (834 128)
of subsidiaries, businesses,
associates and investments
Cash effects of financing 536 972 300 914 (735 423)
activities
Proceeds from shares issued 56 227 - -
Net issue (purchase) of 113 436 87 544 (1 426
treasury shares 546)
Share buy back costs - - (11 980)
Net borrowings raised 367 309 213 370 703 103
Net decrease in cash and cash (145 628) (585 115) (122 239)
equivalents
Net cash and cash equivalents 2 809 043 2 905 453 2 905 453
at the beginning of the
period
Exchange rate adjustment 213 494 (112 953) 25 829
Net cash and cash equivalents 2 876 909 2 207 385 2 809 043
at end of the period
Net cash and cash equivalents
comprise:
Cash and cash equivalents 4 370 118 3 551 806 4 437 268
Bank overdrafts shown as (1 493 209) (1 344 (1 628
short-term portion of 421) 225)
interest bearing debt
2 876 909 2 207 385 2 809 043
Consolidated statement of financial position
as at December 31 June 30
2011 2010 2011
R000s Unaudited Unaudited Audited
ASSETS
Non-current assets 23 354 333 19 735 948 21 860 236
Property, plant and 12 451 215 10 770 264 11 603 183
equipment
Intangible assets 777 620 659 488 672 105
Goodwill 7 050 206 5 524 899 6 354 825
Deferred tax asset 310 423 447 918 390 792
Defined benefit pension 91 840 129 850 111 692
surplus
Interest in associates 589 947 652 530 684 405
Investments 1 614 753 1 408 885 1 749 577
Banking and other advances 468 329 142 114 293 657
Current assets 29 298 887 23 812 631 25 969 682
Vehicle rental fleet 1 295 834 876 186 1 063 371
Inventories 10 213 490 8 446 739 8 750 609
Short-term portion of 180 755 202 310 154 279
banking and other advances
Trade and other receivables 13 238 690 10 735 590 11 564 155
Cash and cash equivalents 4 370 118 3 551 806 4 437 268
Total assets 52 653 220 43 548 579 47 829 918
EQUITY AND LIABILITIES
Capital and reserves 21 097 711 18 150 811 18 456 992
Attributable to shareholders 20 210 157 17 447 298 17 669 264
of the Company
Minority shareholders 887 554 703 513 787 728
Non- current liabilities 5 823 165 4 604 980 5 769 111
Deferred tax liability 441 516 411 324 507 505
Life assurance fund 33 116 40 469 34 014
Long-term portion of 4 449 657 3 357 587 4 391 429
borrowings
Post-retirement obligations 384 316 367 324 381 332
Long-term portion of 291 351 216 685 272 400
provisions
Long term portion of 223 209 211 591 182 431
operating lease liabilities
Current liabilities 25 732 344 20 792 788 23 603 815
Trade and other payables 18 039 344 14 219 051 16 812 487
Short-term portion of 253 360 298 193 237 471
provisions
Vendors for acquisition 5 539 539 539
Taxation 347 285 334 351 201 313
Short-term portion of 1 541 379 1 122 957 1 275 897
banking liabilities
Short-term portion of 5 545 437 4 817 697 5 076 108
borrowings
Total equity and liabilities 52 653 220 43 548 579 47 829 918
Net tangible asset value per 3 985 3 516 3 444
share (cents)
Net asset value per share 6 505 5 447 5 718
(cents)
Consolidated statement of changes in equity
for the Half year ended Year ended
December 31 June 30
2011 2010 2011
R000s Unaudited Unaudited Audited
Share capital 16 386 16 367 16 367
Balance at beginning of the 16 367 17 507 17 507
period
Shares issued during the 19 - -
period
Cancellation of treasury - (1 140) (1 140)
shares
Share premium 137 466 81 258 81 258
Balance at beginning of the 81 258 81 258 81 258
period
Shares issued during the 56 246 - -
period
Share issue costs (38) - -
Foreign currency translation 1 213 287 (375 542) 248 830
reserve
Balance at beginning of the 248 830 20 527 20 527
period
Realisation of reserve on (20 448) - -
disposal of subsidiaries
Arising during the period 984 905 (396 069) 228 303
Statutory reserves 13 801 11 940 15 894
Balance at beginning of the 15 894 15 215 15 215
period
Transfer from (to) retained (2 093) (3 275) 679
earnings
Equity-settled share-based 377 494 345 390 391 430
payment reserve
Balance at beginning of the 391 430 328 640 328 640
period
Arising during the period (13 936) 16 750 62 790
Retained earnings 20 524 160 18 039 19 101 358
668
Balance at the beginning of 19 101 358 18 619 18 619 202
the period 202
Attributable profit 2 199 663 1 729 630 3 538 748
Change in fair value of 3 502 (795) (1 732)
available-for-sale financial
assets
Dividends paid (794 809) (725 113) (1 452
491)
Transfer of reserves as a 12 353 (1 152) (4 331)
result of changes in
shareholding of subsidiaries
Cancellation of treasury - (1 585 (1 597
shares and related costs 379) 359)
Transfer from (to) statutory 2 093 3 275 (679)
reserves
Treasury shares (2 072 437) (671 783) (2 185
873)
Balance at the beginning of (2 185 873) (2 345 (2 345
the period 846) 846)
Purchase of shares by - - (1 581
subsidiaries 285)
Shares disposed of in terms 113 436 87 544 154 739
of share incentive scheme
Cancellation of treasury - 1 586 519 1 586 519
shares
20 210 157 17 447 17 669 264
298
Equity attributable to
minority shareholders of the
Company
Balance at beginning of the 787 728 656 434 656 434
year
Attributable profit 151 581 101 518 235 401
Dividends paid (76 047) (57 667) (107 246)
Movement in foreign currency 9 641 (5 152) (3 529)
translation reserve
Movement in equity-settled - 4 60
share-based payment reserve
Transactions with minorities 27 004 7 224 2 277
Transfer of reserves as a (12 353) 1 152 4 331
result of changes in
shareholding of subsidiaries
887 554 703 513 787 728
Total equity 21 097 711 18 150 18 456 992
811
Comment
The Group delivered a pleasing trading performance for the six months ended
December 31?2011, with the overall result being enhanced by profit of R399,1
million realised on the sale of 50% of the Group`s beneficial holding interest
in Mumbai International Airport Private Limited (MIAL). Headline earnings per
share (HEPS) has increased by 37,5% to 742,3 cents per share whilst basic
earnings per share (EPS) increased by 31,2% to 710,8 cents per share. Normalised
HEPS (i.e. excluding the MIAL profit) has increased by 13,6% to 613,4 cents per
share. EPS were negatively impacted by an impairment of the Group`s investment
in Comair Limited of R96,7 million.
Trading conditions in southern Africa have improved but certain segments such as
light manufacturing, construction and discretionary consumer spending remains
weak. Asia Pacific continues to show solid results albeit that Singapore`s
performance lags that of the other businesses. The trading in the core
Australian market remains tough but the business continues to perform well.
Bidvest Europe`s results are flat in Rand terms. The improvement in 3663
Wholesale was offset as Nowaco in Czech Republic and Deli XL Netherlands
reported declines in trading profit. Bidvest Namibia`s growth trajectory has
continued.
The average Rand exchange rate was weaker against the major currencies in which
the Group operates and in particular against the Australian Dollar and Euro.
This had a positive impact on translation of foreign operations equivalent to
3,7% of normalised HEPS, with normalised HEPS on a constant currency basis
calculated at 593,1 cents per share, an increase of 9,9%.
The Group`s balance sheet remains robust, with the seasonal investment into
working capital once again evident as many businesses achieved growth.
Financial overview
The Group has achieved improved trading results for the six months to December
31?2011. Revenue grew 15,1% to R67,3 billion (2010: R58,5 billion) and trading
profit increased by 14,9% to R3,2 billion (2010: R2,8 billion). Trading margins
have been maintained at 4,8% despite the greater contribution from the lower
margin automotive retailing and clearing and forwarding businesses.
The improvement in trading profit has been offset to a degree by an increase in
net interest paid of R60,0 million, which in the main can be ascribed to the
additional debt assumed for the Seafood Holdings acquisition from January 2011
and the R1,6 billion spent on the Dinatla share buyback in May 2011. This has
been reduced by the interest saving on the net proceeds received on the disposal
of MIAL towards the end of October 2011. Normalised interest cover remained flat
at 8,8 times (2010: 9,1 times). The Group continues to benefit from exposure to
the short end of the funding market, which has assisted overall funding costs.
Associate earnings are 48,5% lower primarily as a result of the accrual of the
Group`s share of losses incurred at Comair Limited.
The Group`s financial position movements reflect the seasonal increase in
working capital and the increase in Rand values of the consolidated foreign
operations. Net debt has increased to R5,6 billion (2010: R4,6 billion) compared
to R5,0 billion at June 2011. Bidvest`s attitude to gearing remains conservative
and is appropriate in the current climate.
Cash generated by operations before working capital changes improved 9,7% to
R4,0 billion. The gains made in reducing working capital over the past two years
have now reversed in line with more normalised seasonal patterns on the back of
robust growth. The Group utilised R1,6 billion of working capital compared to a
R1,0 billion utilisation in 2010. Net capital expenditure on property, plant and
equipment and intangibles of R1,4 billion (2010: R1,3 billion) included
investment into the vehicle rental fleet, asset-based leasing and terminals
assets.
Ratings upgrade
In December 2011, Fitch Ratings upgraded the national long-term rating to `AA-
(zaf)` from `A+(zaf)` and national short-term rating to `F1+(zaf)` from
`F1(zaf)`. The rating action was prompted by Bidvest`s steady through-the-cycle
credit profile, which has outperformed that of its national peer group.
Prospects
In a business world where the benchmarks of the past don`t hold for tomorrow and
economic growth remains subdued, we believe in our tried and tested
entrepreneurial and decentralised business model as a vehicle to build further
value through organic and acquisitive growth. Bidvest is a demand driven
business where our customers drive our focus and our results are driven by our
behaviour.
Economic conditions in South Africa have improved and although the rate of
growth is low, management are quietly optimistic the recent momentum will be
maintained. Exposures to industries such as construction are expected to improve
in the medium term as the benefits of the highly awaited government
infrastructural programme kick off. Discretionary spend by consumers is expected
to improve, benefitting the automotive retailing and foodservice businesses.
Activity levels are anticipated to improve within the European geographies in
which the Group operates but consumer confidence remains fragile. In Asia
Pacific, management are confident of further growth as demand for delivered
wholesale food and value added products presents further opportunities.
Management continues to retain a critical focus on asset management and cost
efficiency as we drive our businesses to deliver superior returns from funds
employed. Our financial position is sound and we are well capitalised with ample
capacity to fund expansion. Notwithstanding the difficult and volatile economic
environments, management see genuine opportunities to further expand our
geographic footprint and product and service offering enabling continued real
organic and acquisitive growth.
MC Ramaphosa B Joffe
Chairman Chief Executive
Analyst presentation
The investor presentation will be available on the Bidvest website from 11:00 on
February 27 2012.
Divisional review
Bidvest Commercial Division
The division, formerly known as Bidvest South Africa, produced a solid set of
results where revenue increased 10,0% to R32,2 billion (2010: R29,3 billion) and
trading profit improved 13,6% to R1,8 billion (2010: R1,6 billion). Trading
conditions remained tough but management rose to the challenge aggressively. The
new divisional structures have bedded down well.
Bidvest Automotive
Automotive made a positive start to the year, with trading profit up 73,1% at
R187,1 million (2010: R108,1 million) while revenue rose to R10,4 billion (2010:
R9,1 billion). Results were driven by strong new vehicle sales, the efforts of
more focused decentralised teams and more efficient expense management following
the restructuring of the central services. Profitability was also assisted by a
R27,8 million contribution from Bidvest Financial Services arising out of
insurances and financing commissions.
Though new vehicle sales were robust, day-by-day activity levels dipped in the
second quarter. Margin pressure was intense and the trading environment remained
challenging. The VW/Audi branches had an outstanding six months. The smaller
franchises faced continued pressure, however, and some recorded losses. Working
capital management remains a focus area. Used vehicle sales were sluggish and
performance at the parts departments was flat. The service contribution moved
higher. Improved performance was seen late in the period at Burchmores as the
introduction of the online Autobid system for trade buyers proved positive. The
new management team will focus on underperforming franchises and margin
restoration as trading is expected to remain difficult in the second half of the
financial year. New vehicle sales growth should be supported by improving
consumer sentiments, low interest rates, new model introductions and declining
vehicle prices in real terms.
Bidvest Electrical
Electrical delivered pleasing results in view of continuing pressure on the
building and construction industry in both the residential and commercial
sectors. Revenue rose 6,4% to R2,1 billion (2010: R2,0 billion) while trading
profit moved 16,8% higher to R70,0 million (R2010: R59,9 million).
Trading challenges were compounded by copper price volatility. Margin pressures
are intense and debtors management and expense control remain key focus areas.
Repositioning and rebranding of the operations continues across the division.
Significant management effort has enabled the integration of the loss-making
Solutions business into the core Voltex operations. Atlas maintained good
volumes, but margin pressure is severe. Most Voltex regions delivered reasonable
performances other than the eastern Cape where trading conditions remain weak.
Overall management focus remains on margin management. Sanlic performance was
disappointing, but Waco returned another satisfactory result. Voltex Retail did
well. Staff motivation remains good despite the high levels of change and the
division is well positioned to meet the challenges ahead.
Bidvest Financial Services
Financial Services returned acceptable results in a tough low-growth market.
Bidvest Bank achieved 10,6% growth in profit before tax to R207,2 million (2010:
R187,3 million) on a strong second quarter, a weaker rand and the low interest
rate environment. Capital adequacy remained healthy at 17,4%. Deposits grew to
R1,5 billion (2010: R1,2 billion) and total assets reached R3,9 billion (R3,1
billion). Expenses were effectively managed while maintaining marketing
investment to support the Bidvest Bank brand and promote more diversified
product offerings. Net cash flow from operations was R545 million. Branch
modernisation continued and four new branches were opened. Product innovation
gained momentum while encouraging growth in corporate leasing was achieved. The
leasing business successfully diversified its leasing revenue streams and its
fleet topped the 12 000 vehicle-mark.
The insurance businesses returned good results, notwithstanding an 8,1% drop in
profit before tax to R110,6 million (2010: R120,4 million). Net underwriting
profit grew 22,0% to R89,2 million (2010: R73,1 million). Policy penetration
levels remained healthy, benefitting from higher new vehicle sales. Vehicle
financing returns improved significantly due to higher deal approvals and the
improved bad debt profile on the book. Profitability was impacted by R27,8
million payment to Bidvest Automotive in respect of insurance and financing
commissions. Overall expenses remained well controlled despite additional
investment into systems development and growth strategies. The equity portfolio
delivered unrealised profits of R29,1 million (2010: R41,9 million), impacted by
the volatility in the overall JSE. Management have laid solid foundations for
growth into 2012.
Bidvest Freight
Growth at Freight was driven by an excellent contribution from the bulk
terminals operations. Trading profit of R439,6 million was up 10,1% on the
corresponding period (2010: R399,4 million) while revenue rose to R10,5 billion
(2010: R9,6 billion), up 9,1%.
Island View Storage turned in acceptable trading results despite disappointing
throughput levels. Southern Africa Bulk Terminals had a record six months,
boosted by high maize export volumes. Additional external storage facility usage
added to overall costs. Bidfreight Port Operations experienced difficult trading
on lower volumes from key clients. Safcor Panalpina and Rennies Distribution
Services were amalgamated into a new business - Bidvest Panalpina Logistics - to
provide customers with a broader service range. Marketplace acceptance has been
good. SACD Frieght faced volume pressures. Bulk Connections achieved pleasing
growth. Rail service improvements were evident and good progress was made on the
facilities upgrade. Lower volumes contributed to a lower result at Naval. Manica
continued to under-perform. New management have been appointed.
Bidvest Industrial
Industrial returned disappointing results. Revenue was flat at R775,3 million
(2010: R773,8 million). Trading profit fell 20,9% to R49,2 million. Challenges
were particularly evident early in the financial year however some improvements
were recorded in the second quarter. Performance at Afcom and Vulcan was
affected by industry-wide strikes. Price pressures remain acute and exchange
rate volatility complicated the trading challenge. Operating expenses moved
higher on investment in the World of Yamaha project and Materials Handling
expansion. Afcom returned poor results as market conditions remained difficult.
Berzack Brothers turnover declined as the sewing machine division experienced a
difficult period. Materials Handling achieved pleasing turnover growth as new
branch expansion progressed. Machine rental business opportunities are being
pursued. Results at Buffalo Executape were flat, but momentum was built in the
second quarter. Vulcan had a much improved first half, achieving solid sales
growth as factory volumes improved. Yamaha sales dipped and overall performance
was disappointing. Management was strengthened.
Significant work is being undertaken within each business so as to maximize
opportunities going forward.
Bidvest Office
Office put in a good performance, boosted by a strong second quarter. Revenue at
R2,1 billion was 13,3% up (2010: R1,8 billion) while trading profit rose 41,7%
to R141,2 million (2010: R99,6 million). ROFE showed pleasing improvement and
expenses were well controlled. Management has been strengthened following the
appointment of a new Waltons MD and a manufacturing manager at the Cape Town
furniture factory. Strong technology sales were a key driver of overall
performance, with a big contribution from Global Payment Technologies. The
furniture sector showed signs of revival and Cecil Nurse optimised the market
opportunity. Furniture manufacturing performed above expectations. Closer
collaboration across business units is increasingly evident. The division has
built momentum ahead of the second half, but the trading environment remains
uncertain.
Bidvest Paperplus
Paperplus achieved a pleasing first-half result, despite intensely competitive
markets, rising costs and a weakening rand. Revenue rose 3,6% to R2,0 billion
(R1,9 billion) while trading profit moved 7,8% higher to R186,2 million (2010:
R172,8 million). Results were lifted by a strong December. A new sub-divisional
structure is in place and Kolok is now well integrated into the business. Print
and Conversion was impacted by falling demand and ongoing restructuring costs.
Print Sales optimised revenue and export opportunities were delivered. Labels
and Packaging faced cost increases following the creation of separate packaging
production facilities. Sprint continues to perform in line with expectation.
Silverray Statmark showed improvement and Kolok did particularly well.
Personalisation and Mail achieved good growth on the back of exceptional
performance at Email Connection. Afric Mail entrenched its leadership position
with further investment into full colour digital printing in progress. Labels
continued to improve off a low base and Lufil enjoyed good volume growth.
Expenses and debtors were well managed across the business.
Bidvest Rental and Products
Rental and Products performed well, with revenue up 17,8% to R989,4 million
(2010: R840,1 million) and trading profit 17,2% higher at R171,6 million (2010:
R146,4 million). Results reflect the first contribution of newly acquired
Alsafe. Steiner again returned another set of good results, underpinned by
stringent cost controls and good margin management. Promising new business gains
were achieved. Laundry was impacted by low revenue and rising factory and
distribution costs, but First Garment improved market share despite stiff
competition. In Industrial Products, G Fox put in another strong performance.
Phased integration of Alsafe operations is under way. Pureau performed
reasonably off low revenue growth. Execuflora did well and secured good revenue
streams for the second half. Silk by Design exceeded expectations. Synergies
with Execuflora are being explored. Hotel Amenities performed strongly while
improving expense management. Steripic was impacted by rising costs. Liquipak
under-performed.
The division will continue to pursue aggressive growth strategies in order to
bulk up the various parts of the smaller businesses.
Bidvest Services
Services was impacted by margin pressure in an intensely competitive sector.
Revenue increased by 2,9% to R1,5 billion (2010: R1,5 billion) while trading
profit remained flat at R94,3 million (2010: R95,0 million). Prestige performed
to expectation, maintaining margins despite rising wage and operating costs.
Margin management improved and costs were well controlled at the Security
cluster. Magnum put in a solid performance with the guarding side of the
business doing well other than the mining sector. Bidtrack recorded good results
and solid growth. Corrective action continues at TMS. CID and Vericon business
units performed well, but overall results remain disappointing. Further cost
savings will be sought. TopTurf was impacted by low contracting volumes but the
maintenance business remains resilient.
Bidvest Travel and Aviation
Travel and Aviation recorded pleasing results, with revenue growing by 20,2% to
R1,0 billion (2010: R852,7 million) and trading profit up 39,1% to R146,8
million (2010: R105,5 million). Performance was driven by an exceptionally
strong showing by Bidtravel, which reaped the benefits of recent restructuring.
The business enjoyed major tender successes and overheads were well controlled
despite the impact of retrenchment costs. myMarket has been split into three
distinct operations - procurement, online bookings and travel management. Bidair
under-performed on the back of account losses, intense price competition and
margin pressure. Further rationalisation is planned to secure continued
efficiencies. Domestic cargo volumes were also under intense pressure. Premier
Lounges returned improved results, buoyed by increasing passenger numbers.
Budget Rent a Car traded well as additional business absorbed excess capacity.
New channels to market used vehicles are being exploited. The team did well to
secure new volume business and improvements were seen in the inbound sector.
Bidvest Food Division
Business conditions remained challenging, with slowing food inflation and
sluggish consumer demand. Despite this, improvements on the corresponding period
were achieved with revenue at R35,0 billion (2010: R29,2 billion) and trading
profit of R1,1 billion (2010: R956,2 million), although the weaker Rand has
contributed in part to this. The major contribution came from Asia Pacific,
though momentum slackened in Singapore as the business transitions from
wholesaling to foodservice operations. New Zealand exceeded expectations. Europe
was impacted by adverse economic headwinds, though our UK businesses made good
progress. European results were also affected by poor performance in the
Netherlands and Czech Republic, where a poor summer hit ice-cream sales.
Disappointing results were recorded in southern Africa.
Asia Pacific
Bidvest Australia showed a modest increase in trading profit over last year. The
business experienced a tough six months where rising unemployment has affected
consumer confidence and the tourism sector has been impacted by international
uncertainty. The core Foodservice businesses performed strongly in a subdued
market, but Fresh and Logistics (QSR) came under pressure. Corporate sales were
particularly healthy in the Foodservice operation. Hospitality achieved good
growth with packaging and disposable products. Fresh purchased another small
fruit and vegetable distributor in Adelaide. Going forward, expense management,
labour efficiencies and innovation will receive growing attention. Growth
opportunities will be sought in fresh produce and meat. Bidvest New Zealand
achieved satisfactory results in a changeable trading environment. Consumer
confidence remains fragile and competition has sharpened from direct importers.
Improved asset management was a highlight. Cash generation remains strong. The
Foodservice and Fresh teams exceeded expectations but the Logistics businesses
were challenged by falling sales, especially ice cream. Christchurch is still
slowly recovering from the earthquakes. Results at Angliss Singapore were below
expectations, mainly as a result of the Local and Export operations. Seafood
achieved higher volumes and Foodservice showed a slight improvement. Angliss
Greater China achieved pleasing sales growth and profitability growth in all its
markets. Performance was boosted by record sales in the second quarter.
Europe
Europe expanded its geographical footprint, with the entry into the Baltic
States of Latvia, Lithuania and Estonia, through a very small acquisition.
Across the region as a whole, economic growth remained low or even negative, and
trading challenges heightened. In the UK, 3663 Wholesale staged a welcome
recovery buoyed by improved volumes, particularly in the free trade sector.
Margin management remains a priority. The IT upgrade is proceeding on schedule.
Bidvest Logistics returned to profit on the back of significant contract wins
resulting in additional operational costs. The vehicle fleet modernisation was
completed. Seafood Holdings was impacted by pressure on customer spend and lower
average drop values, but growth in net sales was achieved. Continued falls in
domestic consumption impacted Deli XL Netherlands. Pressure in the institutional
sector was severe. Hospitality teams performed well. In neighbouring Belgium,
all segments performed ahead of budget but trading conditions continue to
deteriorate. The Middle East businesses secured continued growth, with a
particularly pleasing sales performance in Saudi Arabia. In Eastern Europe,
Nowaco faced downtrading and margin pressure in its core markets. Retail remains
under pressure but hospitality, restaurant and catering volumes showed
reasonable growth. Farutex outperformed, maximising opportunities in the
recession-free Polish market.
Southern Africa
Southern Africa delivered disappointing results in a fragile market
characterised by rising food inflation and rising customer price resistance.
Bidvest Foodservice SA achieved pleasing sales growth, with solid gains in
national business. Overall performance was impacted by margin pressures and
rising operational costs. Credit risk increased, particularly in the restaurant
channel. Migration of branches into multi-temperature operations continued as
did the roll-out of a new ERP solution. Acquisition of the A&S food distribution
business was successfully completed. Bidfood Ingredients increased sales, but
gross margins were affected by higher input costs, increased discounts on
consumer yeast, higher volumes in the supermarket channel and rising expenses.
Continued efficiencies are being sought through IT development. New food safety
systems are rolling out to trading branches. Crown factory volumes rose
significantly. Conditions in the bakery division remain challenging. Speciality
grew first-half sales, but results were impacted by margin pressures. Labour
disruptions ahead of the annual trading peak meant second-quarter opportunities
could not be optimised. Internal controls and debtors` management are receiving
focused management attention.
Bidvest Namibia
The business performed strongly, increasing revenue by 35,9% to R1,3 billion
(2010: R923,0 million) while trading profit grew by 42,5% to R314,4 million
(2010: R220,6 million). Excellent results were again achieved by the fishing
division, buoyed by good catch rates and strong African demand for horse
mackerel. All fishing businesses recorded profits at operational level,
including the Angolan JV. The commercial division showed signs of an encouraging
turnaround though Caterplus and Manica face continuing challenges. Taeuber &
Corssen SWA (Proprietary) Limited, a leading distributor of fast moving consumer
goods in Namibia, was acquired for R188,7 million with effect from December 1
2011.
Bidvest Corporate
The sale of half of the economic interest in MIAL for a profit of R399,1 million
was completed in October 2011. Bidvest Properties continued to grow its
portfolio both via additional developments, such as the Waltons property in
Durban, as well as further strategic investments. Ontime Automotive in the UK
faced challenging conditions, particularly in Rescue and Recovery. Recent
contract wins will benefit the Ontime business going forward.
Directorate
As announced on September 7 2011 Mr. Myron Cyril Berzack decided to leave
Bidvest to pursue his own interests and tendered his resignation as director.
Bidvest acknowledges Myron for his loyalty and commitment, and for his
leadership during his long period of service to the Group. Mr Nkateko Peter
Mageza made himself unavailable for re-election to the Audit Committee at the
annual general meeting and tendered his resignation as director of the board
with effect from November 21 2011. The board would like to thank Peter for his
contribution to Bidvest. Mrs Lilian Garner Boyle tendered her resignation as
director with effect from February 17 2012. Bidvest thanks Lilian for her
services and advice over the past number of years.
MC Ramaphosa B Joffe
Chairman Chief Executive
Dividends
Notice is hereby given that a normal interim cash dividend of 280,0 cents per
share and a special cash dividend of 80,0 cents per share has been awarded to
members recorded in the register of the Company at the close of business on
Friday, April 13 2012.
The salient dates applicable to the cash dividend are as follows:
Last day to trade cum dividend Wednesday, April 4 2012
First day to trade ex dividend Thursday, April 5 2012
Record date Friday, April 13 2012
Payment date Monday, April 16 2012
Share Certificates cannot be dematerialised or rematerialised between Thursday,
April 5 2012 and Friday, April 13 2012, both dates inclusive.
For and on behalf of the board
CA Brighten
Company secretary
Johannesburg
February 27 2012
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 have been prepared in compliance
with IAS 34: Interim Financial Reporting and the Companies Act of South Africa.
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?2011.
In the second half of the 2011 financial year operations in Southern Africa were
reorganised under new management, resulting in the creation of new segments and
the reorganisation of operations within others. The comparative period`s
segmental results have been restated to reflect these changes.
Unaudited results
These results have not been reviewed or reported on by the Group`s auditors. The
condensed financial statements have been prepared under the supervision of NEJ
Goodwin CA(SA) and were approved by the board of directors on February 24?2012.
Exchange rates
The following exchange rates were used in the conversion of foreign interests
and foreign transactions during the periods:
December 31 June 30
2011 2010 2011
Rand/Sterling
Closing rate 12,58 10,28 10,97
Average rate 12,13 11,18 11,18
Rand/euro
Closing rate 10,51 8,81 9,84
Average rate 10,53 9,45 9,56
Rand/Australian dollar
Closing rate 8,29 6,76 7,25
Average rate 7,86 6,74 6,94
The Bidvest Group Limited
Incorporated in the Republic of South Africa ("Bidvest" or "the Group" or "the
Company")
Directors
Chairman: MC Ramaphosa
Independent non-executive: DDB Band, MBN Dube, S Koseff, 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**, DE Cleasby, AW Dawe, LI
Jacobs, P Nyman, LP Ralphs, AC Salomon (*British **Australian)
Company Secretary
CA Brighten
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
Registration number 1946/021180/06
Share code: BVT ISIN: ZAE000117321
Further information regarding our Group can be found on the Bidvest website
www.bidvest.com
Date: 27/02/2012 07:05:01 Produced by the JSE SENS Department.
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