| Thu 12 Feb 2004, 8:16 | | esults For The Half Year Ended December 31 2003 |
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Bidvest - Bidvest Plc Results For The Half Year Ended December 31 2003
Bidvest Group Limited
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1946/021180/06)
SHARE CODE: BVT ISIN: ZAE000050449
("BIDVEST")
Bidvest plc exceeds expectations and delivers excellent results in flat market
BIDVEST plc is listed on the Luxembourg and Australian Stock Exchanges and
comprises 3663 First for Foodservice in the United Kingdom, Bidvest First for
Foodservice in Australia and Crean First for Foodservice in New Zealand.
Bidvest plc is the 81% held international foodservice subsidiary of The Bidvest
Group Limited in South Africa.
Highlights
- Revenue GBP785.8 million +14%
- Operating income GBP24.7 million +24%
- Income attributable to
shareholders GBP16.5 million +23%
- Headline earnings per share 8.72 pence +22%
- Dividend per share 2.70 pence +23%
Bidvest plc performed ahead of expectations for the six months ended December 31
2003, helped by a strengthening in the Australian dollar/Sterling exchange rate
which added GBP0.8 million to operating income.
The Company posted a 22% rise in headline earnings per share to 8.72 pence and a
24% rise in operating income to GBP24.7 million. This was achieved on a 14% gain
in revenue to GBP785.8 million.
A notable feature of the results was the margin expansion. This was the result
of an ongoing focus on cost containment and the improvement in operational
efficiencies.
Cash flow from operating activities increased to GBP26.8 million (2002: GBP12.2
million). This allowed for a substantial GBP18.9 million (2002: GBP10.2 million)
investment in infrastructure and acquisitions creating capacity for future
expansion.
"Management is commended on achieving growth in flat markets" says Chairman
Brian Joffe.
In the UK, 3663 First For Foodservice performed admirably and continues to post
turnover growth and market share gains in a difficult market. This is one of the
leading foodservice products distribution companies in the UK, and comprises two
divisions: Trading (Multi-Temperature, Frozen, Fresh and Chilled), and
Logistics. Chief Executive Fred Barnes says "All divisions performed well,
increasing operating margins by achieving further operational and buying
improvements to offset pressure on overhead costs."
Multi-Temperature is the largest division and continued to grow revenue and
profits notwithstanding a subdued market. Frozen Products sustained the momentum
in sales growth established last year, significantly improving its
profitability.
It was also a good trading period for the Logistics division, despite
challenging market conditions.
Bidvest First for Foodservice in Australia did well in a stable economic
environment with organic sales growth of 8%. Five small acquisitions were made
during the period, complementing the existing business.
Crean First for Foodservice in New Zealand had an excellent trading period,
delivering a 40% gain in operating profit (in original currency terms) on a 16%
rise in revenues. Most of this growth was organic, though two small acquisitions
were made during the period enhancing the company"s national coverage.
"Both the Australian and New Zealand businesses have shown pleasing
performances, growing revenue and expanding margins further enhancing returns on
the investment in their respective national infrastructure" says Managing
director Bernard Berson.
Looking forward, Mr Joffe says the Group"s strong market position, supported by
an excellent management team, have established a stable platform for further
organic growth. Acquisitions to support the Group"s continued growth will be
pursued.
A dividend of 2.70 pence per share (6.50 Australian cents per share) has been
declared.
Issued on behalf of: The Bidvest Group Limited
By: Clear Distinction Communications
Bidvest Contacts: Brian Joffe (Chairman)
Tel: + 44 (0) 20 7493 4733
Tel: + 27 (0) 11 772 8704
David Cleasby (Investor Relations)
Tel: +27 (0) 11 772 8706
Consultancy Contact: Carol Dundas
Tel: +27 (0) 11 444 0650
Mobile: +27 (0) 83 447 6648
Highlights
Revenue 14%
Operating income 24%
Income attributable to shareholders 23%
Headline earnings per share 22%
Dividend per share 23%
Consolidated income statement for the half year ended December 31
Half year ended Year ended
December 31 June 30 Change
Reviewed Reviewed Audited on last
GBP000"s Notes 2003 2002 2003 year
Revenue 2 785,791 689,369 1,381,190 14%
Cost of revenue (608,368) (551,344) (1,095,412)
Gross income 177,423 138,025 285,778 29%
Operating expenses (152,772) (118,218) (245,923)
sales and distribution
costs (103,324) (80,583) (165,172)
administrative
expenses (49,448) (37,635) (80,751)
Operating income 2 24,651 19,807 39,855 24%
Goodwill amortisation (716) (637) (1,253)
Net income before
finance charges 23,935 19,170 38,602 25%
Net finance charges (317) (287) (575)
Income before taxation 23,618 18,883 38,027 25%
Taxation (7,136) (5,463) (11,439)
Income attributable
to shareholders 16,482 13,420 26,588 23%
Number of shares in issue
(weighted 000) 197,312 196,551 196,851
Headline earnings
per share 3
British pence 8.72 7.15 14.14 22%
Australian cents 21.10 20.33 38.43 4%
Average A$/GBP sterling
translation rate 2.42 2.84 2.72
Earnings per share
- pence 8.35 6.83 13.51 22%
Diluted earnings per
share - pence 8.13 6.69 13.24 21%
Dividend per share 6
British pence 2.70 2.20 4.45 23%
Australian cents 6.50 6.00 11.50 8%
Consolidated cash flow statement
for the half year ended December 31
Half year ended Year ended
December 31 June 30
Reviewed Reviewed Audited
GBP000"s Notes 2003 2002 2003
Cash flow from
operating activities 26,832 12,156 33,929
Cash generated by
operations 4 37,218 18,918 50,154
Net finance charges (317) (287) (575)
Taxation paid (5,636) (2,958) (7,776)
Dividends paid (4,433) (3,517) (7,874)
Cash effects of
investment activities (18,945) (10,214) (21,717)
Fixed asset additions (14,268) (8,869) (20,481)
Proceeds on disposal
of fixed assets 354 143 483
Disposal of business - - 3,889
Acquisition of businesses (5,031) (1,488) (5,608)
Cash effects of financing
activities 1,554 1,321 (1,250)
Proceeds from share
issues 87 389 557
Interest-bearing debt raised
(repaid) 1,467 932 (1,807)
Cash inflow 9,441 3,263 10,962
Liquid funds at the beginning
of the period 77,689 66,490 66,490
Foreign exchange adjustments 1,445 (1,067) 237
Liquid funds at the end
of the period 88,575 68,686 77,689
Consolidated Balance sheet
at December 31
December 31 June 30
Reviewed Reviewed Audited
GBP000"s 2003 2002 2003
Assets
Non-current assets 114,139 96,039 102,997
Fixed assets and
investments 91,731 76,727 82,470
Intangible assets 20,491 18,015 18,738
Deferred tax asset 1,917 1,297 1,789
Current assets 307,263 249,732 262,908
Inventories 75,834 61,671 58,933
Receivables 142,854 119,375 126,286
Liquid funds 88,575 68,686 77,689
Total assets 421,402 345,771 365,905
Equity and liabilities
Shareholders" interest 140,332 114,296 127,080
Current liabilities 281,070 231,475 238,825
Accounts payable 233,942 192,468 196,555
Taxation 8,181 5,111 6,530
Deferred tax liability 1,646 2,011 1,787
Interest-bearing debt 37,301 31,885 33,953
Total equity and liabilities 421,402 345,771 365,905
Number of shares in
issue (000) 197,392 197,037 197,282
Net asset value per share
British pence 71.09 58.01 64.42
Australian cents 168.92 165.84 158.49
Statement of changes in shareholders" interest
for the half year ended December 31
Half year ended Year ended
December 31 June 30
Reviewed Reviewed Audited
GBP000"s 2003 2002 2003
Shareholders" interest at
the beginning of the period 127,080 105,232 105,232
Share capital issued for
cash - options 2 14 21
Share premium - options 84 376 536
Non-distributable reserves
- exchange fluctuations 1,447 (1,724) 2,801
Distributable reserve 11,719 10,398 18,490
- income for period 16,482 13,420 26,588
- dividends declared (4,439) (3,536) (7,871)
- goodwill exchange
fluctuations (324) 514 (227)
Shareholders" interest at the
end of the period 140,332 114,296 127,080
Performance ratios
Income before taxation/revenue 3.0% 2.7% 2.8%
Income attributable to
shareholders/equity interests 23.5% 23.5% 20.9%
Notes
for the half year ended December 31
Half year ended Year ended
December 31 June 30 Change
Reviewed Reviewed Audited on last
GBP000"s 2003 2002 2003 year
1. This preliminary
announcement is
based on South African
Generally Accepted Acounting
Practice. The policies
applied are those
set out in the annual report
and accounts for the
year ended June 30 2003.
The preliminary announcement
should therefore be read in
conjunction with the 2003 annual
report and accounts.
2. The principal activities may
be analysed as follows:
Revenue
United Kingdom - trading 346,211 321,850 643,466 8%
- logistics 252,259 215,205 430,761 17%
Australasia 187,321 152,314 306,963 23%
785,791 689,369 1,381,190 14%
Operating income
United Kingdom 18,854 15,551 31,986 21%
Australasia 6,316 4,491 8,392 41%
Corporate (519) (235) (523)
24,651 19,807 39,855 24%
Funds employed
United Kingdom 34,281 29,876 33,500
Australasia 44,835 37,476 40,530
Corporate (2,640) (2,047) (2,772)
76,476 65,305 71,258
3. Headline earnings
Income attributable to
shareholders(per income
statement) 16,482 13,420 26,588
Goodwill amortisation 716 637 1,253
17,198 14,057 27,841 22%
4. Cash generated by operations
Operating income 23,935 19,170 38,602
Amortisation 716 637 1,253
Depreciation 7,700 6,901 16,147
Other non-cash movements (58) (28) (125)
Working capital 4,925 (7,762) (5,723)
Cash generated by operations 37,218 18,918 50,154
5. These preliminary results may be
reconciled to Australian Generally
Accepted Accouting Practice
("A GAAP") as follows:
Income before taxation 24,651 19,807 39,855
Additional goodwill
amortisation (1,833) (2,368) (3,637)
Income before taxation in
accordance with A GAAP 22,818 17,439 36,218 31%
Earnings per share (pence) 7.42 5.62 11.66 32%
Shareholders" interest 140,332 114,296 127,080
Adjustment for capitalised
goodwill 55,806 58,468 57,445
Shareholders" interest in
accordance with A GAAP 196,138 172,764 184,525
Net asset value per share
(pence) 99.36 87.68 93.53
6. Dividends per share for
the year are as follows: per share per share per share
Interim dividend (pence) 2.70 2.20 2.20
Final dividend (pence) 2.25
2.70 2.20 4.45 23%
Interim dividend (AUD cents) 6.50 6.00 6.00
Final dividend (AUD cents) 5.50
6.50 6.00 11.50 8%
No Australian franking credits are available as Bidvest plc is incorporated in
the Isle of Man.
Comment
Financial and operational review
The underlying trading performance of Bidvest plc has been above expectation,
enhanced by the strengthening of the average Australian dollar/sterling exchange
rate, adding GBP0.8 million to operating income. Operating income increased by
24% to GBP24.7 million (2002: GBP19.8 million) and headline earnings per share
increased by 22% to 8.72 pence (2002: 7.15 pence).
United Kingdom
3663 First for Foodservice recorded a strong performance achieving revenue
growth in a difficult market. A small acquisition was made in the period to
augment the product range.
The Multi-Temperature division performed admirably, notwithstanding a subdued
marketplace. The Frozen Products division made a significant profit, maintaining
the sales growth experienced in the previous financial year. Both divisions
increased operating margins by achieving further operational and buying
improvements to offset pressure on overhead costs.
The Logistics division has produced good results, despite challenging
conditions. Central Distribution achieved efficiencies in costs on account of
greater utilisation of facilities due to robust performance of the main
contracts. The MoD operation continued to perform well.
Australasia
Bidvest Australia performed satisfactorily in a stable economic environment
recording a 20% improvement in operating income in its original currency.
Organic sales growth was 8% excluding Darwin, a retail sales business sold in
March 2003, but included in the comparative period. Five small acquisitions were
made, complementing the existing business.
Crean First for Foodservice in New Zealand has continued its strong organic
growth, delivering, in original currency terms, a 40% increase in operating
profit on a 16% increase in revenues. Two small acquisitions were made to
further enhance its national coverage.
Prospects
Bidvest plc has an excellent management team and a sound financial base on which
to sustain its organic growth and pursue acquisitions. The Group is committed to
service its customer base through investment in modern infrastructure and
improvement in operational efficiencies.
Management anticipates growth in earnings for the remainder of the financial
year against the backdrop of unpredictable market conditions.
Independent review
Introduction
We have been instructed by the Company to review the financial information for
the six months ended December 31 2003, which comprises the consolidated income
statement, consolidated cash flow statement, consolidated balance sheet,
statement of changes in shareholders" interest and accompanying notes. We have
read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.
Directors" responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the Directors. The Directors
are responsible for preparing the interim report in accordance with the South
African Statement of Generally Accepted Accounting Practice AC127 Interim
Financial Reporting, which requires that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts, except where any changes,
and the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and underlying financial data and, based
thereon, assessing whether the accounting policies and presentation have been
consistently applied, unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly, we do not express an audit
opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended December 31 2003.
KPMG Audit LLC, Isle of Man
Dividend
A dividend of 2.70 pence per share, which for shareholders on the Australian
register will be 6.50 AUD cents per share, has been declared to shareholders
registered in the books of the Company at the close of business on March 5
2004. Dividend cheques will be posted on or about March 12 2004.
For and on behalf of the board
B Joffe PJ Wentzel
Chairman Director
February 11 2004
Directors
B Joffe (Chairman), FJ Barnes, BL Berson, KH Bielby, M Chipkin, EM Cowley*, A
Fisher, CH Kretzmann, P Nyman*, JL Pamensky*, TH Reitman*, DK Rosevear*, A
Selley, PJ Wentzel*
*Non-executive
Registration number
92157C
Transfer secretaries
Bid Corporate Services (IOM) Limited, Murdoch Chambers
Douglas Head Road, South Quay,
Douglas Isle of Man, IM1 5AS
Computershare Limited, Level 3,
60 Carrington Street
Sydney, NSW 1115, Australia
Administration and registered office
Murdoch Chambers, Douglas Head Road, South Quay
Douglas, Isle of Man, IM1 5AS
URL
www.bidvest-plc.com
Bidvest
A member of The Bidvest Group Limited
Date: 12/02/2004 07:19:36 AM Produced by the JSE SENS Department
