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Tourism’s vulnerability to terror attacks and political upheaval has been
underlined by recent events. Despite these pressures, the general
economy has demonstrated remarkable resilience. We therefore
remain committed to our Turkish investment, but will closely review
developments.
Brexit
The referendum on Britain’s exit from the European Union occurred late
in our final quarter and had no impact on 2016 results. Market reaction
and over-reaction were to be expected in the short term. Bidcorp’s
attitude was simple: “Keep calm and carry on”.
We take a long-term view. Britain has a sizeable economy.
Opportunities for growth remain significant. We are well placed to take
advantage of them.
We did not delay investment decisions on the run-in to the British
referendum on EU membership, nor did we institute an investment
freeze following the vote to leave. We will continue our strategy of
selective UK growth in support of our focused foodservice model.
Britain and Europe have mature economies and mature political
leaders. We believe they will make responsible decisions and facilitate
the UK’s orderly retreat from Europe without self-inflicted wounds.
Divisional overview
Australasia remains our biggest profit generator and the Australia
business achieved pleasing earnings growth despite lower sales
on the deliberate exit of several uneconomic contracts. Expenses
moved higher, a function of the changing business mix. New Zealand
continued its strong run and made further investment in sustained
growth.
The United Kingdom foodservice business put in another pleasing
performance, driven by continued growth of the foodservice and
fresh produce businesses. Bolt-on acquisitions continued. The only
significant disappointment related to the logistics business where
management irregularities led to fraud investigations and impacted
results.
European businesses put in a pleasing performance. The Belgian
and Netherlands businesses showed improvement. Operations in
the Czech Republic, Slovakia and Poland did well. A small loss was
recorded in the Baltic Republics. We continued to grow our Italian
interests and the Spanish business made progress while providing
market intelligence on sectors with interesting potential.
Emerging Markets made a positive contribution and South African
businesses built exciting momentum. Strong growth continued in
Hong Kong and on the Chinese mainland. The Chinese economy may
have slowed, but the growth of a middle class with a taste for western-
style cuisine creates strong momentum for our businesses. Our South
American operations showed continued growth and the core Middle
East operations again put in a pleasing performance.
Appreciation
Our suppliers and customers took the transition to listed status in
their stride. Relationships remained firmly in place, thanks to our
decentralised business model and the growing sense of partnership
with both suppliers and customers. We thank them all for their
continuing support.
Without exception, the people of Bidcorp put in a sterling effort in a
challenging year. Managers steer the business, people drive it. Our
team got us off to a great start and I thank them all for their dedication
and commitment.
In addition, I am deeply indebted to the directors of Bidcorp for their
wisdom and guidance. Their strategic vision adds tremendous value
to our business and I thank the entire board and our chairman and
founder, Brian Joffe, for their support, wisdom and guidance.
Future perspectives
Challenges will continue in all Bidcorp geographies, but overall I believe
there are more tailwinds than headwinds in the global foodservice
industry. Bidcorp plans to make full use of them.
We see continued growth opportunities in every region – Australasia,
the UK, Europe and Emerging Markets, including our home base here
in South Africa.
The work of rebalancing the business will continue in every national
market. Already, every operation draws considerable benefit from the
clearer foodservice focus. Further benefits will be actively pursued. The
work is very nearly done. In 2017, we intend to complete the job.
No major acquisitions took place in 2016, though several opportunities
were explored. We remain an acquisitive business. If the right “fit”
presents itself in 2017 we will pursue it, either to support operations
in existing Bidcorp markets or as a means of gaining entry to new
markets.
Our balance sheet is extremely strong. Our teams are well led,
energetic and highly motivated. This gives us a firm foundation for
continued growth in the year ahead, whether organic or acquisitive.
Bernard Berson
Chief executive officer
Leadership review
Bidcorp Limited Annual integrated report 2016 |
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