Bidcorp United Kingdom
United Kingdom is a market-leading foodservice and product distributor serving customers in the hospitality, institutional, catering and retail sectors in the United Kingdom and Ireland. Foodservice UK is a leading foodservice distributor and preferred supply partner for over 60 000 customers across the UK, providing every food option from quality ingredients to finished meals, including a number of own brand ranges. Fresh supply national and independent customers within the catering industry with fresh ingredients including fish, seafood, meat, produce, dairy products and ambient goods, offering direct delivery of all ingredients to customers’ kitchens, with product freshness preserved through delivery in temperature-controlled vehicles. Logistics provides alternative multi-temperature services to meet the varying needs of our ever growing and diverse customer base.
Environmental awareness is pivotal to a company that has a large international logistics footprint and for whom food and the agricultural value chain is vital for its prosperity. Bidcorp has a philosophy that green initiatives make for good business, efficiency too, and there are numerous examples of this throughout the company. For example, Bidcorp monitors economical use of utilities and packaging and, in certain instances, biofuel is utilised in running fleets.
Foodservice
The business posted a strong set of results in an economy that maintained modest but consistent growth. Sales and trading profit were well ahead of the prior year while expenses were well controlled. All segments showed year-on-year improvements.
National accounts showed growth as several major customers renewed contracts. The strategy of re-tendering low-margin accounts at higher rates resulted in a number of customers exiting the relationship.
Free trade volumes, excluding acquisitions, eased lower, but customer margin improved slightly. Focus for 2017 is to grow the indirect customer base while maintaining margins. The Vivas joint venture in the wholesale segment achieved pleasing profit and sales growth. Caterfood, an independent wholesaler, was acquired in the third quarter and management are excited about the synergies that Foodservice can bring.
Working capital management improved and cash generated from operations remained robust. The return on funds employed was up 30,6% on the prior year.
Investment on infrastructure continued and included spending on new sites in Worthing and Slough, which became operational in June.
The upgrading, modernisation and simplification of IT infrastructure were completed and included the implementation of Bidcorp’s e-commerce platform for product management and online trading. Voice picking was rolled out to 19 depots.
Among the specialist businesses, SLF reported significant trading profit growth and Catering Equipment exceeded expectations.
Logistics
Logistics overall benefited from higher revenue. However, trading profit performance disappointed as margins were squeezed. Labour shortages pushed expenses up significantly, as did higher vehicle accident costs as a result of more agency labour requirements. In addition, costs of implementing new contracts, surplus depot capacity and abnormal expenses eroded profitability. A review of the commercial scope of contracts and service levels is under way, combined with an aggressive review of management structures and overhead costs. Management irregularities were identified and investigated during the year, some of which relate to a recent acquisition and others to operational activities, all of which significantly impacted the division. These irregularities are subject to ongoing legal processes. Any impact on non-current assets is continually being monitored by management. In respect of the net operating assets, management has provided for the worst case scenario notwithstanding recoveries from legal action and insurance claims.
Fresh
Sales were somewhat ahead of budget, but profit was below expectation and below the prior year. Growth into the independent channel continued. National account business also showed growth, though margins came under pressure.
Underperformance at two depots at Seafood Holdings contributed to the disappointing result. A sudden rise in salmon prices put pressure on margins.
Oliver Kay had a good year, growing its exposure into the national sector. The Campbell’s meat business showed improvement and moved from loss to a small profit.
Another meat specialist, Knights, was acquired in May. The acquisition of R Noone & Son (a Manchester fresh produce distributor focused on independents) was finalised late in the year.
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Building in sustainable outcomes
For example, the ammonia refrigeration system at the new Slough depot will provide an annual carbon saving of 247,3 tonnes with zero global warming and ozone depletion potential. What is more, since February 2015, the photovoltaic system at Chepstow depot (covering over 5 200m² of roof space) has generated more than 18% of the site’s electricity consumption. This is the equivalent of 360 carbon tonnes a year. When the system generates more energy than the depot needs, it is passed to the local power grid. To entrench a sustainability culture and foster improved nutrition, Bidcorp UK leverages numerous partnerships
Bidcorp UK also encourages industry cooperation on sustainability and good nutrition, notably through www.plate2planet.co.uk, its web platform for sharing best practice. |
Environmental sensitivity and a sustainability focus are built into standard working practice at Bidcorp UK and when new equipment and facilities are under consideration, sustainability is often integrated into the design.