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made losses. Focused management
attention is being applied to all areas of
underperformance.
Meat division achieved year-on-year profit
growth, but results were significantly below
expectation. Branches have adopted the
direct-to-customers business model and
substantial improvement is expected in
the coming year. Closer collaboration with
Foodservice will be a focus area.
Logistics registered a small loss as the
strategy of exiting low-margin business
continued. The Sydney operation was closed
and the Adelaide Logistics business merged
with its local Foodservice branch. Melbourne
and Brisbane Logistics are preparing for
similar integration into their local Foodservice
branches.
In 2017, the Bidvest Australia strategy of
developing the higher margin free trade
market segment is expected to gain further
momentum. The vision is to become a
focused “food” business rather than a
low-cost carton-mover.
In line with this strategy, we are putting new
Foodservice depots in metropolitan centres
that we believe have strong growth potential
and where our performance can significantly
improve, given the right infrastructure. Cities
such as Melbourne, Sydney and Brisbane
have been targeted. It is clear that depots
need to be large enough to be economically
viable yet small enough to be agile and
customer focused. The new depots have
been specified accordingly.
Own brands will receive strong focus going
forward.
Further growth is expected in the new year.
Australia
The economy sent out some mixed signals,
though GDP growth remained robust and
the unemployment rate remained steady at
5,7%. The downturn in the mining sector
hurt Western Australia and some parts
of Queensland, but growth in the tourism
industry gave a boost to popular holiday
destinations.
Our teams took a pragmatic approach.
They cannot control the national economy,
but they can control how they respond to
macro opportunities and challenges. This
attitude underpinned a very pleasing overall
performance.
The Australian business recorded trading profit
growth of 8,8%, a pleasing result as sales fell
by 7%. The sales decline was foreseen and is
in line with the strategy of exiting low-margin
logistics contracts while concentrating on
higher margin independent business.
Gross contribution was up on the prior year,
driven higher by the changing mix of business.
Margins were well managed. Expenses moved
higher, in line with management expectations
as higher margin segments like Fresh and
Meat typically involve higher costs and wages.
Cash generation remained strong.
The Hospitality division was sold in July 2015.
We acquired Pacific Providores, a small Fresh
produce specialist, and merged it into our
Sydney Fresh business.
Foodservice profits were up by 10,5%. The
Meat and Fresh businesses underperformed.
The Logistics result was as expected.
The Foodservice divisional result comes
off the back of no real sales growth in a
zero food inflation environment. Strong
growth was again evident in the free trade
Operating in Australia and New Zealand our businesses offer a full end-to-end national distribution service.
Australia and New Zealand offer customers the industry’s most comprehensive range, wide market coverage,
economies of scale and one-stop solutions. The division is an innovator and leads its industry in the development
of e-commerce solutions. Sustained investment in training and technology ensure high levels of service
efficiency, quality and accreditation.
customer segment. Out of 30 Foodservice
branches, 25 made or exceeded their targets.
All opportunities for further organic and
acquisitive growth in the Foodservice space
will be pursued in 2017.
The Imports division registered a good sales
result and maintained rigorous expense
control. The potential for local packing of the
division’s own products is being explored.
Opportunities for closer synergies with BPC
and DAC Italy are also being considered.
Fresh division results were extremely
disappointing. Six of the nine operations
Divisional reviews
Bidcorp Australasia
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| Bidcorp Limited Annual integrated report 2016