Executive chairman's reportBrian Joffe

  • Our unbundling from Bidvest gives a solid base for focused growth
  • Value unlocked for shareholders
  • Succession planning re-energises the business
  • Space for ambitious growth by every manager and team member
  • Bidcorp businesses well positioned relative to competitors
  • Sustained growth is the 2017 target

Overview

Bidcorp’s successful unbundling from Bidvest has given our newly listed company a platform for sustained growth within a clear area of focus – food and foodservices. Market excitement around our JSE debut on May 30 was early confirmation that the potential for strategic growth within the global foodservice industry is considerable.

Our business already has substantial scale and is represented in key markets around the world. This creates a springboard for further expansion now that our independent status gives us clear direction across well-defined parameters.

Considerable momentum was already evident across our business as teams achieved organic growth in the course of 2016 and made solid gains in local currency terms.

It was satisfying to see our businesses achieve higher growth levels than competitors as we continued to invest, to innovate and to implement plans for the long term.

Results

We delivered a pleasing set of results as we embarked on our new journey as a listed company in the JSE’s “Food Retailers and Wholesalers” category.

Our pro forma headline earnings per share (HEPS) rose 32,5% to 1 080,0 cents (PF 2015: 815,2 cents) while pro forma basic earnings per share (EPS) rose 26,1% to 1 034,0 cents (PF2015: 819,8 cents).

Double success

Two factors underpinned the unbundling and separation from Bidvest: the desire to unlock value for shareholders and the need to provide for succession.

Enhancement of shareholder value was evident from the outset as the combined value of Bidvest and Bidcorp shares climbed steadily above the price prevailing on February 8, the time of announcing the unbundling.

Succession planning at Bidcorp appears to have received a similar boost.

Even on the run-in to separation, it was clear that new thinking, new direction and new enthusiasm were having a dramatic effect on our foodservice operations.

Tight focus is not restrictive. It has created space for ambitious growth by every executive, manager and team member. This was rapidly realised. In 2016, the dynamic, confident approach of revitalised management teams contributed to significant progress in every Bidcorp geography as our businesses achieved growth in difficult trading conditions.

Strategic role

An extremely strong and experienced senior management team under the leadership of chief executive Bernard Berson is in place at Bidcorp. As executive chairman I retain a strategic role and provide insights and direction, where appropriate.

By staying close to markets we stay close to opportunities. That was always a key element of our business model and will not change.

South African base

Another thing that has not changed is our base. We remain a South African business with a significant international presence. Control remains in South Africa and we continue to report in rand terms, though geographic diversification ensures our financial results are not dependent on the performance of any one currency.

We operate several substantial businesses in South Africa with a growing exposure to other African geographies. They are significant contributors and we continue to invest in their growth.

Within South Africa, our commitment to empowerment remains as strong as ever. We have always invested in our people and encouraged personal growth. This will not change. On a strategic level, we see continued empowerment gains as a source of competitive advantage. For us, business transformation is an enabler of long-term growth.

Appreciation

Thanks are due to our customers and suppliers for their support in challenging market conditions. Without their support business growth would be impossible and I thank them sincerely for their vital role in our success.

Our managers and people put in a creditable performance in markets worldwide. Their ability to drive efficiencies and secure growth is remarkable… and greatly appreciated.

To the Bidvest team under the leadership of chief executive Lindsay Ralphs, I wish you well as you strive for even greater heights.

I also wish to salute another hard working and dedicated team – the Bidcorp board of directors. Their wisdom and strategic direction are invaluable and contributed greatly to our success in a watershed year. To Lorato Phalatse, who will stand down at the annual general meeting, sincere thanks for your valued contribution over many years.

The year ahead

Bidcorp is upbeat about prospects in the coming year. Admittedly, world growth rates remain modest and some national economies face continued pressure, but our businesses are well positioned relative to competitors and the board have every confidence in the strategic direction set in 2016.

Sustained growth is our overriding target as a focused, separately listed foodservice business.

Brian Joffe
Executive chairman