| Mon 24 Feb 2003, 7:47 | | The Bidvest Group Limited - Results for the half-y |
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The Bidvest Group Limited - Results for the half-year ended December 31 2002
The Bidvest Group Limited
("Bidvest" or "the Group")
Results for the half-year ended December 31, 2002
Overview
Bidvest reported pleasing results with an increase in revenue of 24,1% to
R24,6 billion (2001: R19,8 billion) and growth in operating income of 22,1% to
R1,1 billion (2001: R923,9 million).
Headline earnings increased 19,1% to R754,9 million (2001: R634,0 million)
and headline earnings per share grew 13,6% to 243,2 cents (2001: 214,0 cents).
Bidvest plc reported strong results and contributed 27,4% to the Group operating
income (2001: 27,1%), and 23,1% (2001: 22,9%) to Group attributable income.
The excellent operational performance has been masked by the impact of the
strengthening rand. Excluding the effects of the translation gains, which
reduced from R74,8 million in the comparative period to R3,7 million, headline
earnings per share would have increased by 28,2%.
An interim cash dividend of 54,0 cents per share and a distribution out of share
premium of 54,0 cents per share, in lieu of a dividend, totalling 108,0 (2001:
90,0) cents per share will be paid.
Operational Review
The Services Division
Revenue increased by 30,9% to R9,4 billion (2001: R7,2 billion) and operating
income by 21,8% to R367,9 million (2001: R302,1 million).
Bidfreight
Bidfreight produced static results with a modest 0,8% growth in operating income
to R207,4 million on a 32,4% increase in revenue to R8,3 billion supported by
higher export volumes, expanded facilities and grain imports relating to the
food aid programme.
The good performances by Bidfreight Terminals and Safcor Panalpina were offset
by the impact of the strengthening rand on both Marine Services and fishing
activities, and lower profits from Manica and the logistics businesses.
Bidcorp has made significant progress in restructuring the businesses since
Bidvest acquired a 56,7% interest in January 2002. The loss-making businesses
have been or are being sold, restructured or closed.
Bidserv
Bidserv increased revenue by 19,3% to R833,4 million with a 26,1% increase in
operating income to R70,7 million.
The division`s results were mixed with some excellent performances. Competitive
pressures are reshaping the industry and Bidserv expects to benefit from the
ensuing consolidation and improvements in operating efficiencies. The momentum
in the outsourcing market remains encouraging.
Rennies Financial Services
Revenues increased by 26,1% to R314,0 million, with a 123,1% increase in
operating income to R89,8 million, an excellent result reflecting the cost
cutting measures instituted following September 11 and the low base in the
comparative period.
Business in the corporate market has improved significantly, although it is not
yet at pre-September 11 levels. The strengthening rand should encourage outbound
travel, but this will be limited by current outbound capacity restraints.
Foreign exchange purchases from foreign tourists remains buoyant.
The Foodservice Products Division
Revenues increased by 8,7% to R12,2 billion (2001: R11,2 billion) with a 28,0%
increase in operating income to R453,1 million (2001: R354,0 million).
Bidvest plc
Bidvest plc reported strong results, in the face of tightening market
conditions. Revenue increased by 6,7% to R10,8 billion and operating income by
22,6 % to R309,3 million.
All operating divisions of 3663 First for Foodservice in the United Kingdom
contributed to its continued improvements in revenue and operating income. New
business won in the latter part of the prior year contributed strongly to
growth. Bidvest First for Foodservice in Australia continues to derive the
anticipated synergistic benefits from the John Lewis Foodservice acquisition,
which has now been fully integrated and rationalised. In October 2002, a small
distributor in Perth, Western Australia was acquired, extending their national
coverage. Crean First for Foodservice in New Zealand continued its strong
organic growth.
Caterplus
Caterplus increased revenue by 30,0% to R1,0 billion and operating income by
53,8% to R95,6 million.
Increased tourism played a significant role throughout the country and all
segments of Caterplus` market showed growth. Opportunistic purchasing of an
increased basket of products contributed to improving operating margins, which
continue to be tight.
Combined Foods
Combined Foods increased revenue by 20,0% to R441,4 million with a 22,0%
increase in operating income to R48,3 million. Aggressive sales contributed to
improved operating profits, whilst intense competition had a negative influence
on margins.
The Commercial Products Division
Revenues increased by 102,8% to R3,8 billion (2001: R1,9 billion), with
operating income increasing by 71,0% to R290,8 million.
Bidoffice
Bidoffice performed well with a 49,2% increase in revenue to R2,3 billion and a
41,3% increase in operating income to R180,7 million with particularly strong
contributions from both the Stationery and Printing divisions. Buoyant trade and
increased activity produced excellent results.
The assets of the largest business forms manufacturing and distribution business
in France was acquired in September 2002. Management is confident that the
business, now known as Lithotech France, will be successful and generate
acceptable returns in the short- to medium-term.
Bidpac
Bidpac produced excellent results and maximised its position in an active
manufacturing sector, increasing revenue by 23,7% to R393,1 million and
operating income by 47,3% to R62,1 million. All businesses gained market share
amidst fierce competition, benefiting from an aggressive sales drive with new
products and services on offer to existing and new customers. All factories
increased their volume throughput and generated over recoveries.
Bidpac`s focus was on growing business from export-led companies and large
manufacturing organisations. The export programme did well into Africa, but met
with competitive pressures in the United Kingdom, due to the strengthening rand.
Voltex
Voltex traded extremely well generating revenues of R1,1 billion and operating
income of R48,0 million. The momentum in the first half of calendar 2002 was
enhanced by the strong trading conditions in most divisions stemming from a
cyclical housing boom, significant agricultural expansion and increased activity
in the building and construction sectors. The mining and industrial sectors have
been specifically targeted.
IT services
I-Fusion
I-Fusion continued to focus its activities on value added networking and network
services. The cabling business has been downscaled.
mymarket.com
The mymarket.com platform is trading well in South Africa. Thirty national
customers have registered a total of 2 500 buyers that conclude an average of 10
000 purchases per month from 600 different suppliers. Customers, including
Bidvest companies, are benefitting from significant synergies, cost and process
savings, as well as more efficient purchasing practices. Operations in the
United Kingdom are in the final stages of rollout and training.
Prospects
These results reflect the strategy and business principles at the heart of
Bidvest. The Group`s above average growth has been achieved from very different
markets and produced by a highly motivated, empowered and incentivised
management team, who operate in an entrepreneurial and decentralised
environment.
The impact of the strengthening, yet volatile, rand will continue to be
significant and will challenge our management to ensure the optimal positioning
for all Group operations. Despite this, all South African businesses are
expected to trade well in 2003.
Bidvest is pursuing further initiatives that will realise the Group`s
empowerment aspirations and solidify its South African roots, which, together
with the 24% of Bidvest currently held by institutions for the benefit of
historically disadvantaged individuals (HDI), will result in a significant black
economic empowerment and HDI interest in the Group.
Bidvest continues to look for acquisition opportunities within its core
competencies in trading, distribution and services. Bidvest is well funded and
well positioned to continue producing strong growth and acceptable returns.
The Group`s prospects remain positive.
The BidVest Group Limited resultS FOR THE HALF-YEAR ended December 31 2002
highlights
- Revenue 24,1%
- Operating income 22,1%
- Headline earnings 19,1%
- Headline earnings per share 13,6%
- Headline earnings per share excluding
- Translation gains 28,2%
- Distribution per share 20,0%
Consolidated income statement
Half year ended Year ended
December 31 June 30
Per-
2002 2001+ centage 2002
R`000 Unaudited Unaudited change Audited
Revenue 24 565 364 19 790 404 24,1 41 950 388
Operating
income 1 128 347 923 947 22,1 2 012 611
Operating income
pre-translation
gains 1 124 621 849 105 32,4 1 909 966
Translation
gains 3 726 74 842 102 645
Amortisation
of goodwill (22 449) (15 714) (52 646)
Net capital
items (877) 26 (11 467)
Net finance
expense (36 865) (8 521) (80 163)
Income before
taxation 1 068 156 899 738 18,7 1 868 335
Taxation (299 607) (235 321) (515 264)
Income after
taxation 768 549 664 417 15,7 1 353 071
Income from
associates 15 921 13 491 17 735
Trading profits 16 078 13 624 27 788
Impairment of
and goodwill
in associates (157) (133) (10 053)
Outside
shareholders`
interest (52 158) (57 846) (129 557)
Income
attributable
to shareholders 732 312 620 062 18,1 1 241 249
Number of
shares in
issue
(weighted 000) 310 402 296 251 299 089
Headline earnings
per share (cents) 243,2 214,0 13,6 436,2
Earnings per
share (cents) 235,9 209,3 12,7 415,0
Distribution per
share* (cents) 108,0 90,0 20,0 190,0
Headline earnings
The following
adjustments to
income attributable
to shareholders
were taken into
account in the
calculation of
headline earnings:
Income attributable
to shareholders 732 312 620 062 1 241 249
Amortisation of
goodwill 22 449 15 714 52 646
Net loss (surplus)
on disposal of
assets and
businesses 877 (26) (3 610)
Costs relating ]
to unsuccessful
bid for Brake
Bros plc - - 20 403
Underwriting
commission
received net of
costs from
Bidcorp plc - - (5 326)
Impairment of
and goodwill
in associates 157 133 10 053
Tax charge
(relief) - - (4 363)
Outside shareholders`
interest (889) (1 855) (6 322)
Headline earnings 754 906 634 028 19,1 1 304 730
Rand/Sterling
exchange rates
Opening rate 15,91 11,34 11,34
Closing rate 13,86 17,40 15,91
Average rate 15,61 15,62# 14,54
#Computed on a projected annualised basis.
Segmental analysis
Half year ended Year ended
December 31 June 30
Per-
2002 2001+ centage 2002
R`000 Unaudited Unaudited change Audited
Revenue
The Services
Division 9 398 787 7 179 587 30,9 16 424 403
Bidfreight 8 251 319 6 231 818 32,4 14 383 523
Bidserv 833 433 698 736 19,3 1 505 982
Renfin 314 035 249 033 26,1 534 898
The Foodservice
Products Division 12 227 027 11 246 386 8,7 21 121 321
Bidvest plc 10 764 086 10 092 618 6,7 18 741 489
Caterplus 1 021 572 786 025 30,0 1 653 732
Combined Foods 441 369 367 743 20,0 726 100
The Commercial
Products Division 3 826 074 1 886 772 102,8 5 500 712
Bidoffice 2 340 844 1 569 042 49,2 3 512 837
Bidpac 393 114 317 730 23,7 625 537
Voltex 1 092 116 - - 1 362 338
Corporate Services 34 263 74 627 (54,1) 159 387
I-Fusion 32 948 74 627 (55,8) 159 225
mymarket.com 1 315 - - 162
Intergroup
eliminations (920 787) (596 968) - (1 255 435)
24 565 364 19 790 404 24,1 41 950 388
Operating income
The Services
Division 367 911 302 075 21,8 718 570
Bidfreight 207 375 205 751 0,8 474 514
Bidserv 70 748 56 085 26,1 134 317
Renfin 89 788 40 239 123,1 109 739
The Foodservice
Products Division 453 134 353 965 28,0 672 927
Bidvest plc 309 272 252 239 22,6 460 875
Caterplus 95 569 62 140 53,8 132 493
Combined Foods 48 293 39 586 22,0 79 559
The Commercial
Products Division 290 848 170 088 71,0 487 675
Bidoffice 180 710 127 921 41,3 313 715
Bidpac 62 133 42 167 47,3 84 142
Voltex 48 005 - - 89 818
Corporate Services 16 454 97 819 (83,2) 133 439
I-Fusion (3 540 (5 669) - (9 096)
mymarket.com (3 391) - - (2 172)
Investment and
other income 1 181 11 828 (90,0) 6 259
Translation gains 3 726 74 842 (95,0) 102 645
Group properties 18 478 16 818 9,9 35 803
1 128 347 923 947 22,1 2 012 611
Consolidated cash flow statement
Half year ended Year ended
December 31 June 30
2002 2001+ 2002
R`000 Unaudited Unaudited Audited
Cash flow from
operating activities (119 730) 157 745 2 002 904
Operating income
net of capital items 1 127 470 923 973 2 001 144
Depreciation and
other non-cash items 348 795 248 190 580 019
Changes in working
capital (941 766) (846 830) 207 183
Cash generated
by operations 534 499 325 333 2 788 346
Net finance expense (36 865) (8 521) (80 163)
Taxation paid (277 656) (137 613) (395 737)
Dividends paid
- Company (311 892) - (268 901)
- subsidiaries (27 816) (21 454) (40 641)
Cash effects of
investment activities (671 041) (718 340) (1 658 352)
Net additions to
fixed assets (439 726) (285 215) (695 117)
Net additions to
intangible assets 1 564 (10 459) (18 760)
Net acquisition of
subsidiaries, businesses,
associates and investments (232 879) (422 666) (944 475)
Cash effects of
financing activities (64 149) 314 608 552 378
Proceeds from
shares issued
- Company 21 212 23 189 596 462
- subsidiaries 5 693 465 506
Distribution of
share premium
to shareholders - (159 743) (159 743)
Net borrowings
raised (repaid) (91 054) 450 697 115 153
Net increase (decrease)
in cash and
cash equivalents (854 920) (245 987) 896 930
Net cash and cash
equivalents at the
beginning of the period 2 202 331 1 058 213 1 058 213
Currency adjustments (154 808) 367 937 247 188
Net cash and cash
equivalents at the
end of the period 1 192 603 1 180 163 2 202 331
Cash equivalents
made up as follows:
Cash on hand and
in the bank 1 946 130 1 993 618 2 745 492
Bank overdrafts
shown as current
portion of
interest-bearing
borrowings (753 527) (813 455) (543 161)
1 192 603 1 180 163 2 202 331
Consolidated balance sheet
December 31 June 30
2002 2001+ 2002
R`000 Unaudited Unaudited Audited
Assets
Non-current assets 4 987 541 4 180 978 5 132 443
Fixed assets 3 474 061 2 679 254 3 602 498
Intangible assets 667 229 525 236 681 903
Deferred taxation 199 229 255 249 251 282
Investments and advances 472 212 469 525 404 615
Banking and other advances 174 810 251 714 192 145
Current assets 9 764 886 8 279 367 9 998 814
Other current assets 7 818 756 6 285 749 7 253 322
Liquid funds 1 946 130 1 993 618 2 745 492
Total assets 14 752 427 12 460 345 15 131 257
Equity and liabilities
Capital and reserves 6 432 881 5 258 220 6 395 651
Shareholders` interest 5 696 931 4 849 546 5 589 235
Outside shareholders`
interest 735 950 408 674 806 416
Non-current liabilities 436 139 351 400 604 371
Deferred taxation 164 734 117 864 252 048
Post-retirement obligations 182 701 164 608 188 785
Long-term portion
of interest-bearing
borrowings 70 032 36 039 135 838
Banking liabilities 18 672 32 889 27 700
Current liabilities 7 883 407 6 850 725 8 131 235
Other current
liabilities 6 533 993 5 455 929 6 887 622
Current portion of
interest-bearing
borrowings 1 349 414 1 394 796 1 243 613
Total equity and
liabilities 14 752 427 12 460 345 15 131 257
Number of shares
in issue (000) 312 588 298 778 311 839
Net tangible asset
value per
share (cents) 1 609 1 447 1 574
Statement of changes in shareholders` interest
Half year ended Year ended
December 31 June 30
2002 2001+ 2002
R`000 Unaudited Unaudited Audited
Shareholders` interest
at the beginning
of the period 5 589 235 3 860 494 3 860 494
Share capital issued 35 148 801
- capitalisation issue - 107 107
- cash issue - - 623
- in terms of the
share incentive scheme 35 41 71
Share premium
arising on
shares issued 21 177 (136 595) 436 025
- in terms of
the share incentive scheme 21 240 23 237 40 067
- cash issue - - 557 377
- refund of share
premium to shareholders - (159 743) (159 743)
- costs (63) (89) (1 676)
Movement in
non-distributable
reserves
- foreign currency
translation reserve (306 297) 505 689 329 882
Movement in
retained income 392 781 619 810 962 033
- income attributable
to shareholders 732 312 620 062 1 241 249
- dividends and
capitalisation issues (311 892) (107) (269 008)
- secondary tax
on companies (27 639) (145) (10 208)
Shareholders` interest
at the end of
the period 5 696 931 4 849 546 5 589 235
COMMENTS
Overview
The Group reports pleasing results, with headline earnings increasing by 19,1%
to R755 million and headline earnings per share by 13,6% to 243,2 cents.
The excellent operational performance has been masked by the impact of the
strengthening rand. Excluding the effects of the translation gains, which
reduced from R74,8 million in the comparative period to R3,7 million, headline
earnings per share would have increased by 28,2%.
Empowerment
Bidvest is pursuing further initiatives that will realise the Group`s
empowerment aspirations and solidify its South African roots, which, together
with the 24% of Bidvest currently held by institutions for the benefit of
historically disadvantaged individuals ("HDI"), will result in a significant
black economic empowerment and HDI interest in the Group.
Prospects
These results reflect the strategy and business principles at the heart of
Bidvest. The Group`s above average growth has been achieved in difficult markets
and produced by a highly motivated, empowered and incentivised management team
who operate in an entrepreneurial and decentralised environment.
The impact of the strengthening, yet volatile, rand is likely to continue to be
significant and will challenge South African management to ensure the optimal
positioning of their operations, which are expected to trade well in 2003.
Bidvest continues to look for acquisition opportunities within its core
competencies in trading, distribution and services. Bidvest is well funded and
well positioned to continue producing strong growth and acceptable returns, both
locally and abroad.
The Group`s prospects remain positive.
Accounting Policies+
The results for the half-year have been prepared in accordance with South
African statements of Generally Accepted Accounting Practice. The accounting
policies used are consistent with those used in the financial statements for the
year ended June 30, 2002.
The results for the comparative period have been restated to reflect the Group`s
new accounting policies adopted in the year ended June 30, 2002 in respect of
the depreciation of buildings and employee benefits. The Group now provides for
post retirement employee benefits, full leave pay and depreciation of buildings.
This change resulted in a decrease in attributable and headline earnings of R5,4
million for the half year ended December 31 2001.
Dividend declaration and distribution out of share premium*
Notice is hereby given that an interim cash dividend of 54,0 cents per share and
a distribution out of share premium of 54,0 cents per share, in lieu of a
dividend, (collectively "the distribution"), has been awarded to members
recorded in the register of the Company at the close of business on Thursday,
March 20, 2003. The total value awarded to shareholders amounts to 108,0 (2001:
90,0) cents per share.
Shareholders are advised that the last day to trade "CUM" the distribution will
be Thursday, March 13, 2003. The shares will trade "EX" the distribution as from
Friday, March 14, 2003 and the record date will be Thursday, March 20, 2003.
Share certificates may not be dematerialised or rematerialised during the period
Friday, March 14, 2003 and Thursday, March 20, 2003, both days inclusive.
Payment will be made on Monday, March 24, 2003.
In terms of the requirements of the Companies Act, the directors confirm that
after the payment of the distribution, the Company will be able to pay its debts
as they become due in the ordinary course of business, and its consolidated
assets, fairly valued, will exceed its consolidated liabilities.
For and on behalf of the Board
B Joffe M Chipkin
Executive Chairman Deputy Chairman
Johannesburg
February 24, 2003
The Bidvest Group Limited
Directors: B Joffe (Executive Chairman), M Chipkin (Deputy Chairman), IA Berman,
MC Berzack, LG Boyle, LI Chimes BR Chipkin*, E Ellerine*, RW Graham, AM
Griffith, CH Kretzmann, S Koseff*, D Masson*, LK Matisonn*, SP Ngwenya*, P
Nyman, JL Pamensky*, LP Ralphs, TH Reitman* (British), FEA Robarts, DK Rosevear,
AC Salomon (Alternate HL Greenstein), CE Singer, PC Steyn, F Titi*, R Wainer, CE
Watt, PD Womersley.
*Non-executive
Company Secretary: MA David
Transfer Secretaries: Computershare Investor Services Limited, 70 Marshall
Street, Marshalltown 2001. PO Box 61051, Marshalltown 2107, South Africa.
Registered office: Bidvest House, 18 Crescent Drive, Melrose Arch, Melrose 2196,
Johannesburg, South Africa. PO Box 87274, Houghton 2041, Johannesburg, South
Africa.
Registration number: 1946/021180/06
ISIN number: ZAE000008132
Share code: BVT
Website: www.bidvest.com
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FROM DIVERSITY COMES STRENGTH
Date: 24/02/2003 07:01:01 AM Supplied by www.sharenet.co.za
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