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Bidvest shareholders welcomed the opportunity for direct participation
in its foodservices operations. From management’s perspective
following the listing, access to further capital as Bidcorp remains
exciting.
Following the listing at the end of May, Bidcorp shares were actively
traded at levels significantly above the initial price of R270 a share.
Though our former parent’s share price rerated following the
unbundling – in line with market expectations – participating
Bidvest shareholders made significant gains on the split as value
was unlocked.
Since the listing, Bidcorp shares have been well supported by both
institutional and retail investors. An attractive factor within the South
African market is the share’s de facto positioning as a solid “rand
hedge”. Less than 10% of Bidcorp profit is derived from South African
operations, while significant revenue streams are denominated in euro,
sterling and Australian dollar.
By year-end, approximately 52% of Bidcorp shares were locally
held while the rest were taken up by offshore asset managers and
international investors.
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See details of the shareholders’ information on page 160.
Dedication and enthusiasm
Finance teams in every country and continent reacted positively to
the creation of Bidcorp despite the additional workload created by
the listing and unbundling. Bidcorp prides itself on the expertise and
dedication of its finance teams in assisting the businesses to achieve
their strategic objectives.
At operational level, strong emphasis was placed on efficiency
improvements as the basis for continued organic growth in low-growth
economies. Focus next year will be on streamlining and improving
group reporting in order to achieve further efficiency gains.
Acquisitions and disposals
Several bolt-on acquisitions were finalised at regional and company
level, namely MPD (Czech Republic – R162,0 million) and Caterfood
and Cimandis (UK Foodservice – R464,0 million). Disposals include
Patleys (Food Africa – R171,3 million) and our minority share in the
associate VCN (Netherlands – R51,6 million).
Attention centred on the continued consolidation of Gruppo Dac
S.p.A (DAC), acquired in the previous year. In 2016, DAC gave added
impetus to growth within Europe.
PCL 24/7 Limited disappointed post-acquisition as margins were
squeezed due to labour shortages and higher vehicle accident costs
as a result of increased agency labour requirements. In addition, costs
of implementing new contracts, surplus depot capacity and abnormal
expenses eroded profitability.
Management irregularities were identified and investigated during
the year. Some relate to PCL 24/7 Limited, others to operational
activities within Logistics. All significantly impacted the division. These
irregularities are subject to ongoing legal processes.
Any impact on non-current assets is continually monitored by
management. In respect of net operating assets, management has
provided for the worst case scenario, notwithstanding recoveries
from legal action and insurance claims.
Financial performance
In addition to its actual results, Bidcorp has provided shareholders with
pro forma financial information in the annual integrated report to enable
a full appreciation of the group’s true performance. The following
comments are based on the pro forma information:
The group delivered very pleasing results for the year ended
June 30 2016. Headline earnings per share (HEPS) increased by
32,5% to 1 080,0 cents per share (2015: 815,2 cents), with basic
earnings per share (EPS) increasing by 26,1% to 1 034,0 cents per
share (2015: 819,8 cents). On a constant currency basis, HEPS
increased by 14,2%.
Leadership review
Bidcorp Limited Annual integrated report 2016 |
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