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In an environment of global volatility and market uncertainty, Bidcorp has continued to improve market share, earnings and cash flow; while maintaining low debt levels and a strong balance sheet. This pleasing performance is testament to the resilience of Bidcorp's decentralised business model, which is premised on international diversification across multiple segments and underpinned by a strong service and efficiency ethic.
Global environment: steady but slowing
Global economic confidence is weakening. Reports of a US-China trade war, rising nationalism, as well as the resurgence of protectionist trade barriers are weighing down economies around the world. Further shocks could trigger a global downturn.
Multi-national businesses must therefore carefully navigate ever more turbulent markets, where short-term populist politics, tariffs, anti-globalisation backlashes, and possible supply chain and market access restrictions could constrain the free movement of goods. For now, however, the global economy remains steady, albeit slowing.
In light of these geopolitical challenges, at Bidcorp we continue to focus our attention where we can make a difference: namely, on engaging our most critical stakeholders on a common vision around food quality, sustainability, service and technology. Key is our decentralised business model. By empowering leadership to retain substantial autonomy on matters that relate to the business in their specific region, we can identify and respond to rapidly changing market conditions.
Given persistent geopolitical and economic uncertainties, we are closely monitoring developments in the UK, Hong Kong, parts of Europe, Brazil and South Africa.
Strong F2019 performance
Bidcorp scaled new heights in 2019. Revenue was up 4,7%, trading profit was 7,1% higher and headline earnings per share grew 7,7%, all in constant currency. Headline earnings per share increased by 12,5% and basic earnings per share increasing by 14,8% in rands.
Rewarding shareholders remained a priority, with the company declaring a final cash dividend of 330 cents per share, giving a total dividend for the 2019 financial year of 640 cents per share – a 14,3% increase on the total dividend paid last year.
This performance was achieved with only a minor contribution from last year's acquisitions, a low food inflation environment, labour and energy cost pressures, and the exit of low margin businesses.
The United Kingdom, Europe and Australasia drove profit growth, while several Emerging Market territories also delivered commendable performances. Our focus remains on capitalising on organic and acquisitive opportunities to expand market share and turnaround programmes for underperforming areas.
People and culture
Since assuming the chairman role from Brian Joffe last year, I have seen Bidcorp's people in action: driving innovation, customer friendly solutions and service excellence. These are the values that will continue to keep us nimble and relevant.
While we are proud of the success of our geographic and product diversification, at our core we remain a people organisation. Understanding that the vitality of our teams around the world are key factors behind the performance of our group we have a continual programme of skills and talent development. While decentralisation is our management philosophy, we embrace shared learnings between regions. This year we also enhanced our investments in ecommerce and IT and accelerated intergroup procurement opportunities.
Responsibility and governance
Over the past three decades, Bidcorp has grown to become a substantial global foodservice business with operations in over 35 countries and employing 25 858 people across Africa, South America, the UK, Europe, Asia and Australasia. Since listing on the JSE in May 2016, Bidcorp has seen its market capitalisation grow to in excess of R112 billion.
As a board we recognise that an organisation of this scale has broader responsibilities to society. Much work is going into ensuring local relevance, including local product sourcing and sustainable business practices. The group continues to invest to ensure high product quality and rigorous compliance with food safety protocols. It has also committed to protecting the environment, including setting business unit targets for fighting climate change. Ambitious goals have been set across the supply chain to increase transparency and ensure practices reflect the highest standards of integrity, respect and safety for suppliers and other partners.
In line with regulatory calls for regular audit rotation, we have changed the group's external auditor from KPMG to PricewaterhouseCoopers. The board extends its appreciation to KPMG for its considerable input and guidance over many years and we look forward to a successful relationship with PwC.
During August 2019, Bidcorp undertook an independent board appraisal to evaluate board functioning. Board members provided their confidential responses on subject areas which included governance, strategy review, leadership, financial reporting, risk oversight, succession planning, ethics and stakeholder engagement. In addition, the review included appraisals of the five board committees. No significant matters of concern arose. Bidcorp is a well-run, transparent company and will continue on its journey of meeting and beating its stakeholders' expectations.
The board is satisfied with enhanced governance measures and internal controls in place to alert leadership to emerging issues and to provide any corrective actions required. These include augmented risk management procedures around food safety, cyber and data security, corruption, reputational damage, product liability claims and other matters that could cause disruption to day-to-day operations.
My sincere appreciation is extended to our hundreds of thousands of customers and tens of thousands of suppliers for choosing Bidcorp. We continue to deepen these relationships as we strive to become their foodservice partner of choice.
Our strong performance would not have been possible without Bernard Berson, his leadership team and the 25 858 people who work for Bidcorp. Thank you for your invaluable contributions.
I would also like to thank my fellow board members for their counsel and support. In particular, my gratitude goes to Doug Band, who is retiring after having served as the lead independent director with distinction. He has played a critical role in the advancement of good governance at Bidcorp and before that at Bidvest. We recognise and appreciate his valued contribution over many years.
As the business evolves, so too must the board, as such two new appointments have been made to strengthen diversity and skillset. We welcome Mrs Tasneem Abdool-Samad and Mr Clifford Rosenberg to the board, effective September 16 2019.
The foodservice industry continues to grow worldwide. We intend to capitalise on increasing demand for out-of-home and healthy eating, quality produce, variety of choice and value for money.
Bidcorp remains at the forefront of technological and data solutions in foodservice, while maintaining a strong financial position. We continue to collaborate across geographies, sharing knowledge to deliver significant savings and improved services, and are well positioned to benefit from our sustained investment in people, systems and infrastructure. We are targeting growth in home currency earnings through a combination of organic and acquisitive expansion, cost containment and operating efficiencies, while delivering service excellence, product quality and customer satisfaction.
Despite geopolitical and economic challenges, there remain opportunities for nimble businesses closely aligned to market needs. I remain confident that Bidcorp, with its strong entrepreneurial culture and resources, remains a resilient business that can sustain growth and continue to add value to stakeholders.