| Mon 23 Aug 2004, 8:38 | | RESULTS FOR THE YEAR ENDED JUNE 30 2004 |
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BIDVEST LIMTIED - CONSOLIDATED AUDITED RESULTS FOR THE YEAR ENDED JUNE 30 2004
BIDVEST LIMITED
Registration Number 1946/021180/06
ISIN ZAE000008132
SHARE CODE BVT
CONSOLIDATED AUDITED RESULTS FOR THE YEAR ENDED JUNE 30 2004
Creating value and building strength from diversity
16 consecutive years of growth
Revenue
R51,3bn + 8,9%
Trading income
R2,6bn + 13,9%
Headline earnings*
R1,6bn +14,8%
Headline earnings per share*
546,7c + 17,7%
Distribution per share
250,2c + 13,7%
`People create growth.
Companies report it.
Well done team!`
Brian Joffe - Chief Executive
Basis of Preparation of Financial Statements
The financial statements have been prepared in accordance with South African
Statements of Generally Accepted Accounting Practice.
Audit Report
The consolidated results for the year have been audited by KPMG Inc and their
unqualified audit report is available for inspection at the Company`s registered
office.
Analyst presentation
Details of the presentation to investors will be available on the Bidvest
website from 14:00 onwards, August 23 2004.
www.bidvest.com
Consolidated Income Statement
for the year ended June 30
2004 Percentage 2003 2002
R000`s change Restated Restated
Revenue 51 262 212 8,9 47 073 375 41 950 388
Trading income 2 555 652 13,9 2 244 121 2 012 611
Trading income
before translation
gains 2 553 201 13,0 2 259 197 1 909 966
Translation
gains (losses) 2 451 (15 076) 102 645
Amortisation of
goodwill (77 622) (64 887) (52 646)
Net capital
losses (40 157) (61 548) (11 467)
Net operating
income 2 437 873 15,1 2 117 686 1 948 498
Net finance
expense (168 902) (110 982) (80 163)
Income before
taxation 2 268 971 13,1 2 006 704 1 868 335
Taxation (678 079) (601 908) (525 472)
Income after
taxation 1 590 892 13,2 1 404 796 1 342 863
Income from
associates 24 691 30 328 17 735
Outside
shareholders`
interest (74 759) (97 451) (129 557)
Income attributable
to shareholders 1 540 824 15,2 1 337 673 1 231 041
Number of shares
in issue
(weighted 000`s) 300 643 308 116 299 089
Headline earnings
per share (cents) 546,7 17,7 464,5 432,8
Earnings per
share (cents) 512,5 18,1 434,1 411,6
Distributions per
share (cents)** 250,2 13,7 220,0 190,0
- interim 113,4 108,0 90,0
- final 136,8 112,0 100,0
HEADLINE EARNINGS
The following
adjustments to
income attributable
to shareholders
were taken into
account in the
calculation of
headline earnings:
Income attributable
to shareholders 1 540 824 1 337 673 1 231 041
Net amortisation
of goodwill 75 009 61 449 49 411
Amortisation of
goodwill 77 622 64 887 52 646
Outside
shareholders`
interest (2 613) (3 438) (3 235)
Net loss on
disposal and
discontinuance
of businesses 26 202 11 626 3 913
Loss on disposal
and discontinuance
of businesses 38 595 36 130 11 797
Tax relief (12 392) (16 017) (4 363)
Outside
shareholders`
interest (1) (8 487) (3 521)
Net loss on
disposal of
assets 1 090 19 233 104
Loss (surplus) on
disposal of
assets 1 562 25 418 (330)
Tax relief (472) (7 385) -
Outside
shareholders`
interest - 1 200 434
Impairment of,
and goodwill
in, associates 401 1 240 10 053
Outside
shareholders`
interest
Headline earnings 1 643 526 14,8 1 431 221 1 294 522
Rand/Sterling
exchange rates
Opening rate 12,457 21,7 15,905 11,338
Closing rate 11,285 9,4 12,457 15,905
Average rate 11,939 16,4 14,288 14,544
* CHANGES IN ACCOUNTING POLICIES
In accordance with recently amended statements of Generally Accepted Accounting
Practice, with regard to secondary tax on companies and business combinations,
the Group has changed its accounting policies. Secondary tax on companies is now
treated as part of the tax charge in the income statement as opposed to an
appropriation of equity; and the Group no longer provides for amortisation of
goodwill arising from business combinations subsequent to March 31 2004. These
changes have resulted in an additional tax charge to income, net of outside
shareholders` interest, of R13 million for the year (2003: R45 million); and a
reduction of goodwill amortisation of R13million in the current year. Had these
changes not taken place, the headline earnings per share for the year would have
been 551,2 (2003: 479,0) cents per share, an increase of 15,1%, and earnings per
share would have been 512,8 (2003: 448,6) cents per share, an increase of 14,3%.
**Includes distribution from share premium.
Pro forma Income Statement
for the year ended June 30 2004 Reported
R000`s Pro forma Headline earnings
REVENUE 57 331 309 51 262 212
Trading income 2 743 856 2 555 652
Net finance expense (309 398) (168 902)
Income before taxation 2 434 458 2 386 750
Taxation (722 072) (690 943)
Income after taxation 1 712 386 1 695 807
Income from associates 26 457 25 092
Outside shareholders` interests (37 579) (77 373)
Headline earnings 1 701 264 1 643 526
Number of shares in
issue (weighted 000`s 300 643
Headline earnings per share (cents) 565,9
Basis of preparation
This pro forma income statement has been prepared on the basis that the
acquisition of McCarthy, and the minority interests in Bidvest plc and Bidcorp
plc, were effective for the full reporting period, after taking into account
imputed funding costs and after STC that would have been payable a larger
dividend.Headline earnings exclude adjustments for goodwill and capital items.
Consolidated Balance Sheets
at June 30
R000`s 2004 2003 2002
ASSETS
Non current assets 6 406 635 4 904 544 5 089 552
Fixed assets 3 663 846 3 493 246 3 602 498
Intangible assets 1 959 223 689 218 681 903
Deferred tax 262 727 219 340 262 747
Investments and advances 498 853 384 072 378 997
Banking and other advances 21 986 118 668 163 407
Current assets 11 542 389 9 666 838 10 027 552
Other current assets 9 232 228 7 306 277 7 282 060
Liquid funds 2 305 161 2 360 561 2 745 492
Total assets 17 949 024 14 571 382 15 117 104
EQUITY AND LIABILITIES
Capital and reserves 6 426 618 6 103 451 6 370 033
Shareholders` interest 6 056 612 5 412 659 5 563 617
Outside shareholders`
interest 370 006 690 792 806 416
Non current liabilities 1 242 783 972 050 588 136
Deferred taxation 89 554 115 824 252 048
Post retirement obligations 225 040 190 179 200 250
Life assurance fund 5 106 - -
Long term portion of
interest bearing borrowings 923 083 666 047 135 838
Current liabilities 10 279 623 7 495 881 8 158 935
Other current liabilities 8 166 917 6 794 077 6 887 622
Current portion of
interest bearing borrowings 2 112 706 701 804 1 271 313
Total equity and liabilities 17 949 024 14 571 382 15 117 104
Number of shares
in issue (ooo`s) 302 169 302 679 311 217
Net tangible asset value
per share (cents) 1 356 1 561 1 569
Consolidated Cash Flow Statements
for the year ended June 30
R000`s 2004 2003 2002
Cash flow from operating
activities 2 798 728 1 506 715 1 967 371
Trading income net of
capital losses 2 515 495 2 182 573 2 001 144
Depreciation and other
non-cash items 742 849 746 026 543 348
Changes in working capital 502 505 (261 904) 207 183
Cash generated by operations 3 760 849 2 666 695 2 751 675
Net finance expense (102 907) (110 982) (80 163)
Taxation paid (645 451) (521 617) (395 737)
Dividends paid - Company (168 608) (475 284) (267 763)
- Subsidiaries (45 155) (52 097) (40 641)
Cash effects of investment
activities (3 136 445) (1 167 628) (1 596 063)
Net additions to fixed assets (909 602) (991 232) (695 118)
Net additions to intangible
assets (14 817) (8 442) (18 759)
Net acquisition of
subsidiaries, businesses,
associates and investments (2 212 026) (167 954) (882 186)
Cash effects of financing
activities 314 018 (70 234) 525 622
Proceeds from shares
issued - Company 83 702 31 710 596 462
- Subsidiaries 1 009 7 670 506
Purchase of treasury shares (115 417) (401 333) (26 756)
Distribution of share
premium to shareholders (528 163) (168 797) (159 743)
Net borrowings raised 872 887 460 516 115 153
Net increase (decrease) in
cash and cash equivalents (23 699) 268 853 896 930
Net cash and cash equivalents
at the beginning of the year 2 220 344 2 202 331 1 058 213
Currency adjustments (95 663) (250 840) 247 188
Net cash and cash equivalents
at the end of the year 2 100 982 2 220 344 2 202 331
Net cash equivalents are made
up as follows
Cash on hand and in the bank 2 305 161 2 360 561 2 745 492
Bank overdrafts shown as
current portion of
interest bearing debt (204 179) (140 217) (543 161)
2 100 982 2 220 344 2 202 331
Segmental Analysis
for the year ended June 30
2004 Percentage 2003 2002R000`s
change
REVENUE
The Services
Division 16 675 368 18 292 281 16 424 403
Bidfreight 12 105 642 (11,5) 13 676 421 12 984 127
Bidcorp 1 463 166 (25,2) 1 956 688 1 078 403
Namsov fishing 282 827 0,3 282 107 320 993
Bidserv 2 165 517 24,8 1 735 005 1 505 982
Renfin 658 216 2,5 642 060 534 898
The Foodservice
Products Division 22 266 741 22 557 416 21 121 321
Bidvest
United Kingdom 14 161 750 (7,7) 15 348 018 14 556 975
Bidvest
Australasia 5 176 737 18,0 4 385 736 4 184 514
Caterplus 1 967 570 (0,2) 1 970 925 1 653 732
Combined Foods 960 684 12,7 852 737 726 100
The Commercial
Products
Division 7 777 656 7 584 909 5 500 712
Bidoffice 4 766 335 0,5 4 743 195 3 512 837
Bidpac 748 224 2,4 730 579 625 537
Voltex 2 263 097 7,2 2 111 135 1 362 338
The Automotive
Products
Division
McCarthy+ 5 904 843 - - -
Corporate
Services 58 206 93 920 159 387
Bidnet 50 298 (44,5) 90 665 159 225
mymarket.com 7 908 142,9 3 255 162
Inter Group
eliminations (1 420 602) - (1 455 151) (1 255 435)
51 262 212 8,9 47 073 375 41 950 388
TRADING INCOME
The Services
Division 763 685 750 502 718 570
Bidfreight 417 273 5,5 395 400 355 971
Bidcorp (21 833) - 834 14 034
Namsov fishing 35 201 11,8 31 497 104 509
Bidserv 205 600 23,3 166 713 134 317
Renfin 127 444 (18,3) 156 058 109 739
The Foodservice
Products
Division 889 581 843 449 672 927
Bidvest
United Kingdom 459 948 2,3 449 611 376 150
Bidvest
Australasia 137 954 15,1 119 823 84 725
Caterplus 170 343 (5,3) 179 817 132 493
Combined Foods 121 336 28,8 94 198 79 559
The Commercial
Products
Division 636 944 613 342 487 675
Bidoffice 383 910 (2,5) 393 845 313 715
Bidpac 110 878 7,6 103 069 84 142
Voltex 142 156 22,1 116 428 89 818
The Automotive
Products Division
McCarthy+ 217 606
Corporate
Services 47 836 36 828 133 439
Bidnet 578 - (5 042) (9 096)
mymarket.com (7 709) - (7 242) (2 172)
Investment and
other income 10 346 24,4 8 317 108 904
Bidprop 44 621 9,4 40 795 35 803
2 555 652 13,9 2 244 121 2 012 611
+Results for the six months ended June 30 2004.
Statements of Changes in Shareholders` Interest
for the year ended June 30
2004 2003 2002
R000`s Restated Restated
Shareholders` interest at the
beginning of the year 5 412 659 5 563 617 3 860 494
Share capital issued (26) (427) 770
- capitalisation issue - - 107
- cash issue - - 623
- in terms of the share
incentive scheme 127 62 71
- repurchase of shares by
subsidiary (153) (489) (31)
Share premium arising on
shares issued (559 852) (537 993) 409 300
- in terms of the share
incentive scheme 83 617 31 780 40 067
- cash issue - - 557 377
- refund of share premium to
shareholders (528 163) (168 797) (159 743)
- net repurchase of shares
by subsidiary (115 264) (400 844) (26 725)
- share issue costs (42) (132) (1 676)
Movement in non distributable
reserves (172 579) (474 927) 329 882
- foreign currency translation
reserve (169 698) (474 927) 329 882
- on acquisition of businesses 1 313 - -
- transferred to distributable
reserves (4 194) - -
Movement in retained income 1 376 410 862 389 963 171
- income attributable to
shareholders 1 540 824 1 337 673 1 231 041
- dividends and capitalisation
issues (168 608) (475 284) (267 870)
- transfer from
non-distributable reserves 4 194 - -
Shareholders` interest at the
end of the year 6 056 612 5 412 659 5 563 617
Comment
Bidvest`s results are pleasing given the challenging trading environment
experienced during the year. Deflation and the effects of an appreciating
currency significantly impacted markets, however there was evidence of improving
conditions in the last quarter of the year.
The McCarthy Group which was acquired for R980 million with effect from January
2004 positively benefited the Group for the period of its inclusion. Steps were
taken to bring our listed subsidiaries under full ownership in line with the
Group philosophy. Bidvest made an offer, which immediately became unconditional,
to acquire the minority interests in Bidvest plc with effect from April 2004. In
June 2004, an offer was also made to the Bidcorp plc minorities which became
effective on August 2 2004. Consequently Bidcorp plc became a wholly owned
subsidiary from that date. The full effects of these acquisitions will benefit
the Group next year.
Financial Highlights
Revenue grew 8,9% to R51,3 billion (2003: R47,1 billion) and the trading margin
increased to 5,0% (2003: 4,7%). Trading income reached R2,6 billion (2003: R2,2
billion), an increase of 13,9%. Income attributable to shareholders increased by
15,2% to R1,5 billion (2003: R1,3 billion).
The Group achieved credible growth in headline earnings per share of 15,1% prior
to the change in the basis of accounting for secondary tax on companies and
goodwill. Following the restatement, headline earnings per share increased 17,7%
to 546,7 cents per share (2003: 464,5 cents per share).
The impact of the strength of the rand on the results of the Group is material.
On a constant currency translation of foreign businesses, headline earnings per
share would have been 565,6 cents per share, an increase of 21,8%.
Shareholders` attention is drawn to the pro forma income statement, which
highlights the full annual effects of the acquisitions of McCarthy and the
minorities of Bidvest plc and Bidcorp plc on the current results.
An annual compound growth rate in headline earnings per share of 26,5% per year
has been achieved over the last 13 years.
Total distributions to shareholders increased 13,7% to 250,2 cents per share
(2003: 220 cents per share). In terms of the Dinatla scheme of arrangement, all
Dinatla`s normal dividends and distributions accrue to the scheme participants
or their successors and not to Dinatla itself. As a result, the final
distributions to shareholders has increased by 16,6% to 159,48 cents per share.
Bidvest`s dividend and distribution policy is to approximately twice cover cash
earnings available for distribution.
The balance sheet remains strong and cash generation has been significant.
Bidvest consciously increased its gearing during the year, though borrowings
were well within the targeted range. It is Bidvest`s intention to keep the debt-
to-equity ratio below 40%. At year end, the gearing ratio was about 10%.
GBP103 million was raised to fund the buy-out of minority shareholders in
Bidvest plc. A facility for a further GBP25million was arranged for the
acquisition of Bidcorp plc shares not already owned. The acquisition of the
minority interests will further allow the unrestricted allocation of funds
within Bidvest and release cash resources to repay a large part of these
borrowings.
Our credit rating of AA- (zaf) was reaffirmed by Fitch Ratings. Bidvest, a black
influenced company and a satifactory broad based BEE contributor with
unrestricted operational capacity has a `BBB` empowerment rating from
Empowerdex.
Business Highlights
The Dinatla partnership
An important development for the long term was the completion of a BEE
transaction in December 2003 resulting in the acquisition of a 15% equity stake
in Bidvest by Dinatla Investment Holdings. Dinatla is the single largest
shareholder in a company with a market capitalisation of R18billion. This stake
has enabled Dinatla to participate at the Group level in both the local and
international activities of Bidvest.
Since the commencement of the partnership, Dinatla has four seats on the board,
seven new HDI commercial directors have been appointed in the divisions, The
Bidvest Charter has been drawn up and open days between Dinatla and Bidvest
companies have been held throughout the country, to form linkages for BEE
procurement opportunities.
Corporate governance
In line with international norms and the requirements of the JSE Securities
Exchange South Africa, the roles of chairman and chief executive have been
separated.
Cyril Ramaphosa, a leading businessman and prominent champion of broad-based
Black Economic Empowerment, has been appointed non-executive chairman of
Bidvest. Brian Joffe, previously executive chairman, continues in the role of
chief executive. His executive responsibilities are unchanged.
As chief executive, Brian Joffe will ensure the continuation of the strategies
that have delivered unprecedented success for Bidvest since inception 16 years
ago.
The appointment of Cyril Ramaphosa adds further impetus to Bidvest`s successful
BEE strategy while entrenching a long-standing relationship between the business
leader and the Group.
New BEE impetus
Shanduka Group, the black-owned and managed business chaired by Cyril Ramaphosa,
will by agreement obtain a 15% stake in Dinatla.
Bidvest has helped to create a new BEE investment vehicle - Dinatla New
Ventures, which with the participation of certain major financial institutions,
will pursue large investment opportunities and be positioned as a potential
empowerment partner capable of adding value to any business in which it makes an
investment. Dinatla New Ventures will focus on areas that involve no competition
or conflicts with Bidvest`s current activities.
Strategic Review
Growth despite deflation and the effects of an appreciating currency is further
confirmation of the resilience of Bidvest`s entrepreneurial business model and
the depth of the Group`s management.
Our market may be small by world standards, but offers a growing number of
opportunities which are possible due to the fertile environment of political
stability and prudent fiscal management found in democratic South Africa.
Business is indebted to our national leaders for the democratic transformation
and our economic revival since 1994.
Within South Africa, many opportunities exist for growth through acquisition.
Bidvest is by nature an acquisitive company. The quest for BEE partners or
credible BEE companies creates opportunities for strategic expansion and has led
to discussions with several businesses, as an increasing number of companies
review their BEE options.
Prospects
Bidvest`s primary goal will be consolidation and the extraction of synergies and
efficiencies created by low inflation and current economic conditions. Our
businesses are well placed to add further impetus to the underlying momentum.
The full benefits of the inclusion of McCarthy and 100% of Bidvest plc will be
realised in the year ahead. Under-performing offshore businesses are expected to
make a positive contribution. Further investment in African markets to boost
export initiatives will be investigated.
The Group will continue to seek out acquisitive opportunities whilst organic
growth will be vigorously pursued. Management is budgeting for real growth in
earnings off the pro forma base. Focus will be on enhancing stronger
relationships across the businesses accompanied by significant personal
development of the people of Bidvest.
Operational Review
The Services Division
Bidfreight
Bidfreight`s revenue decreased by 11,5% to R12,1 billion (2003: R13,7 billion),
however trading income rose 5,5% to R417,3 million (2003: R395,4 million).
Within South Africa, the two key macro-economic factors of 2004, falling
interest rates and a strong rand, were negative for Bidfreight. Some export
volumes dropped, margins came under pressure and competition intensified.
However, the broad spread of activities and strong relationships with a blue-
chip client base enabled growth in most areas of the business.
The challenges of freight management and port operations, both for South Africa
and Bidfreight, are those of growth. Trade volumes continue at a high level as
South Africa reintegrates into the global economy. Investment in modern
infrastructure is ongoing and employment is being created.
An encouraging development is the growing sense of partnership with the National
Ports Authority, Transnet, and other state agencies. We have a common agenda -
efficient harbours, transport infrastructure and freight management systems.
Bidfreight supports government policy of creating clear lines of responsibility
between a National Ports Authority tasked with providing world-class port
systems and South African Port Operations.
Bidcorp: Revenue decreased by 25,2% to R1,5 billion (2003: R1,9 billion)
resulting in a trading loss of R21,8million (2003: R0,8 million trading income).
Following 30 months of consolidation and reorganisation, a substantial business
base remains. Indications are that Bidcorp`s core businesses are showing a
sustained financial improvement. Asset values in ships and property continue to
underpin the Group`s investment.
Namibian fishing operations: Namsov, a partnership with Namibian citizens and
empowerment organisations, is primarily involved in mid-water trawling. Bidvest
has an effective 31% shareholding at an attributable level. As more than 95% of
sales is denominated in US dollars, the stronger rand negatively impacted
results. However, the vessels brought in a record catch, driving up operating
profits by 12%.
Bidserv
Bidserv`s revenue increased by 24,8% to R2,2 billion (2003: R1,7 billion) and
trading income rose 23,3% to R205,6 million (2003: R166,7 million).
As soft service providers within the facilities management industry, Bidserv
companies work for property owners, property groups and a broad range of
corporate clients. Without exception, client companies are engaged in rigorous
cost-containment programmes. Falling interest rates and lower inflation also
encouraged resistance to every price increase.
Bidserv responded by the single-minded pursuit of real volume growth through
aggressive pricing. As a result, a series of tenders were won, strong cash flows
were maintained and revenue increased significantly. Growth through strategic
acquisition was also achieved.
A contributing factor was Bidserv`s improved BEE profile arising out of the
Dinatla transaction. Another positive development is the increasing willingness
of parastatals and official departments to consider partnerships with soft
service providers which Bidserv is well positioned to develop.
Rennies Financial Services
Renfin`s revenue increased by 2,5% to R658,2 million (2003: R642,1 million).
Trading income decreased 18,3% to R127,4 million (2003: R156,1 million).
South Africa`s price competitiveness as an inbound tourist destination was
affected by competition from heavily discounted East Asian destinations. The
strong rand affected both tourist volumes and forex encashments. Though currency
dealing volumes rose, the rand value of transactions fell, severely depressing
earnings.
Outbound travel was undermined by corporate cost-cutting on business travel.
Renfin companies add value by actively managing corporate travel budgets. Their
expertise is more in demand than ever, helping Renfin to achieve a measure of
success in extremely difficult trading conditions.
The competitive landscape presented a growth opportunity as some high-quality
operators re-examined their strategic options. Renfin made selected acquisitions
to strengthen its regional presence and broaden the client base.
Competitive pressures from Asian destinations are unsustainable. As these
discounts are removed, South Africa will again emerge as an exciting, value-for-
money destination, with positive impact on inbound business. In addition, our
banking business will begin to derive new benefits from substantial investment
in IT systems, infrastructure and training.
The Foodservice Products Division
International Foodservice Products
The translation of Bidvest plc`s results were materially affected by the
appreciation of the rand over the past year. Revenue decreased by 2,0% to R19,3
billion (2003: R19,7 billion). Trading income rose 5,0% to R597,9million (2003:
R569,4 million).
Following the successful offer to minorities, the delisting of Bidvest plc from
the Australian and Luxembourg stock exchanges took place on August 18, 2004.
Bidvest United Kingdom: The revenue of 3663 First for Foodservice increased by
10,4% to GBP1,2 billion (2003: GBP1,1 billion). Trading income rose by 25,0% to
GBP40,0 million (2003: GBP32,0 million).
Despite the constraints of a flat market, 3663 First for Foodservice achieved
high levels of growth while investing in future success. The strategy driving
growth involves aggressive product extensions whilst maintaining 3663`s
traditional base in grocery and frozen food distribution.
As the Frozen Division extended into other temperature-controlled areas
(specifically fresh and chill), the consolidation of the Swithenbank operations
into 3663`s business was a point of focus. The assets of nationally represented
Barton Meat Company were also acquired, creating another area for growth. A
major initiative within the multi-temperature business saw the creation of a
joint venture with Matthew Clark, a leading purveyor of beers, wines and
spirits. Other key developments include the launch of snacking and non-food
initiatives, growth areas that complement the traditional range of products. The
acquisition of Wilson Watson, the Scottish catering equipment business,
strengthens 3663`s existing catering equipment operations and creates a truly
national presence in this sector.
Bidvest Australasia: Bidvest Australasia`s revenue increased by 41,3% to
GBP433,6 million (2003: GBP307,0 million) and trading income rose 37,9% to
GBP11,5 million (2003: GBP8,4 million).
Bidvest First for Foodservice in Australia grew trading income by 19% in local
currency and increased its market share. Strategic acquisitions enabled the
creation of a new divisional structure comprising the Foodservice Division, the
Quick Service Restaurant Division and the Hospitality Supplies Division. The
performance of the businesses in the major metropolitan areas was in line with
our expectations.
In New Zealand, Crean First for Foodservice entrenched its position as the
country`s only national foodservice company, with trading income increasing by
48% in local currency. Geographic coverage was expanded through a series of
strategic acquisitions.
Caterplus
Caterplus` revenue remained flat at R2,0 billion whilst trading income fell 5,3%
to R170,3 million (2003: R179,8 million).
The catering industry faced a difficult year largely as a result of the strong
rand`s deflationary impact on the hospitality market. Rigorous margin management
was essential and energetic steps were taken to secure new business. Efficiency
improvements were also achieved. Despite challenging trading conditions, the
division suffered no overall job losses and still sustains a consistent staff
complement. Long-term prospects are positive. South Africa`s attraction as a
tourist destination underpins the development of the foodservice sector.
Combined Foods
Combined Foods` revenue increased by 12,7% to R960,7 million (2003: R852,7
million) and trading income rose 28,8% to R121,3 million (2003: R94,2 million).
Combined Foods achieved very good results with improvement in both volumes and
trading income. The accent was on efficiency, improved market share and margin
expansion. The two ageing factories of Crown National in Cape Town and
Johannesburg, were replaced by a new, state-of-the-art plant in Montague
Gardens, Cape Town. Factory efficiency and productivity have improved since the
new factory came on stream in October 2003. The management teams of NCP Yeast
and Chipkins Bakery Supplies were merged into a unified structure, Bidbake. By
avoiding duplication and taking a broader product range to the customer base,
significant distribution and marketing efficiencies will be achieved.
The Commercial Products Division
Bidoffice
Bidoffice revenue increased 0,5% to R4,8 billion (2003: R4,7 billion) but
trading income fell 2,5% to R383,9 million (2003: R393,8 million).
A challenging year was characterised by continued rand strength and strong
pressure on prices and margins. In general terms, the robust rand was negative
for stationery, less so for office furniture and marginally positive for office
automation. Lithotech produced solid results. Bidoffice`s focus was on increased
efficiency and effective asset management. Management teams maintained or grew
market share and increased their sales volumes in a highly competitive
environment. Considerable dynamism is evident across all Bidoffice markets. The
challenge is to constantly reposition the businesses to capitalise on new
opportunities. Lithotech France faced a challenging year, but is now better
positioned to reclaim market share lost over the period of its receivership and
during its initial incorporation into Bidvest.
Bidpac
Bidpac`s revenue increased by 2,4% to R748,2 million (2003: R730,6 million) and
trading income rose 7,6% to R110,9 million (2003: R103,1 million).
All operating companies were called on to display versatility and resilience in
the face of significant changes in the operational environment. Despite the
dramatic shift from manufacturing growth to recession and client de-stocking,
management achieved positive results thanks to an intense focus on the
businesses. Profits from all business units improved off last year`s high base.
Aggressive and effective management of expenses, assets and margins protected
profitability. The focus was on selected extensions to the product range and
improvements to quality and efficiency.
Voltex
Voltex`s revenue increased by 7,2% to R2,3 billion (2003: R2,1 billion) and
trading income rose 22,1% to R142,2 million (2003: R116,4 million).
Lower inflation and the continuing strength of the rand kept margins under
constant threat. Gyrations in the world copper price created uncertainty and
also influenced stocking patterns. The business had to anticipate changes in
demand and pricing while protecting margins and trying to drive up volumes.
Voltex`s business units were largely successful in these efforts. Market share
improved and higher volumes were achieved. Voltex`s pursuit of large industrial
accounts was aligned with the national energy saving programme developed by the
national electricity regulator. In January 2004, Voltex became one of the first
companies in the sector to be accredited as an energy service company.
The Automotive Products Division
McCarthy+
McCarthy generated revenue of R5,9 billion and trading income of R217,6 million.
Membership of a major group of international trading, service and distribution
companies creates numerous opportunities. McCarthy responded with record
earnings, a signal that South Africa`s second largest automotive retailer is
already benefiting from Bidvest`s empowerment credentials, financial strength,
internal support and synergies across business units.
The motor industry experienced buoyant trading conditions due to a favourable
macro-economic environment, vehicle price stability and low financing costs.
McCarthy`s motor franchises increased new vehicle sales despite the loss of nine
DaimlerChrysler and four BMW dealerships in the comparative year. Used vehicle
sales increased marginally. Effective price deflation on new vehicles impacted
both new and used vehicle margins. McCarthy`s financial services business
benefited from the growth in new vehicle sales while the strong rand assisted
the margins of Yamaha Distributors, who had a record year.
Corporate Services
Bidvest Network Solutions
Bidnet, a provider of wide area network solutions to both external clients and
Group companies, became profitable for the first time since being acquired by
Bidvest, showing a small after tax profit. Further growth is being
energetically pursued, which includes the rebranding of I-Fusion to Bidnet,
leveraging the strength of the Bidvest connection.
mymarket.com
mymarket.com, a provider of electronic trading and procurement services, secured
significant growth through new business gains and increased utilisation of its
services by existing customers both locally and internationally. Further growth
is anticipated next year.
Bid Properties
Bidprop manages the Group property portfolio, provides property management,
property development services and provides specialist assistance such as the
review of Group leases, lease negotiation, feasibility studies and project
management.
Dividend declaration and distribution out of share premium
Shareholders` attention is drawn to the further announcement by Bidvest
regarding the distribution.
Notice is hereby given that a final cash dividend of 68,4 cents per share and a
distribution out of share premium of 68,4 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 Friday September 172004. The
total value awarded to shareholders amounts to 250,2 (2003: 220,0) cents per
share.
Shareholders are advised that the last day to trade `cum` the distribution will
be on Friday September 102004. The shares will trade `ex` the distribution as
from Monday September 132004, and the record date will be Friday September
172004. Share certificates may not be rematerialised or dematerialised during
the period Monday September 13 2004 to Friday September 17 2004, both days
inclusive. Payment will be made on Monday September 20 2004.
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.
In terms of article 56A of the Company`s articles of association, dividends
amounting to R10 or less will be aggregated and donated to the Bidvest
Chairman`s Fund Trust for distribution to charitable institutions.
For and on behalf of the Board.
M C Ramaphosa B Joffe
Chairman Chief executive
Johannesburg
August 20 2004
The Bidvest Group Limited
(`Bidvest` or `the Group` or `the Company`)
Directors
M C Ramaphosa (Chairman), B Joffe (Chief Executive), D D B Band, F J Barnes*, B
L Berson**, M C Berzack, L G Boyle*, N Cassim, L I Chimes, M Chipkin (alternate
B P Connellan), A A da Costa, M B N Dube, R W Graham, A M Griffith, L I Jacobs
(alternate L J Mokoena), C H Kretzmann, S Koseff, R M Kunene, D Masson, B E
Moffat (alternate T Slabbert), P Nyman, J L Pamensky, S G Pretorius, L P Ralphs,
T H Reitman*, D K Rosevear, A C Salomon (alternate H L Greenstein), C E Singer,
P C Steyn, P D Womersley. *British **Australian
Company Secretary
M A David
Transfer Secretaries (effective September 1 2004)
Ultra Registrars, 5th Floor 11 Diagonal street, Johannesburg, 2001. P O Box
4844, Johannesburg, 2000, 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 ZAE000008132
Share Code BVT
URL www.bidvest.com
Date: 23/08/2004 07:00:29 AM
Produced by the JSE SENS Department
