| 2019 R'000 |
2018 R’000 Restated# |
|||
| 4. | OPERATING PERFORMANCE | |||
| 4.1 | Revenue | 46 548 250 | 41 689 286 | |
| Sale of goods – frozen | 36 458 831 | 34 032 079 | ||
| Sale of goods – chilled | 39 869 549 | 35 798 872 | ||
| Sale of goods – ambient | 6 101 714 | 5 966 212 | ||
| Sale of goods – non-food | 271 644 | 216 507 | ||
| Rendering of services and commissions earned | 129 249 988 | 117 702 956 | ||
| Revenue percentage by market segmentation | ||||
| Independent | 52% | 53% | ||
| Chain | 34% | 34% | ||
| Logistics | 6% | 5% | ||
| Retail and other | 8% | 8% | ||
| 100% | 100% | |||
| Analysis of revenue per country by percentage | ||||
| United Kingdom | 26% | 26% | ||
| Australia | 16% | 17% | ||
| Netherlands | 9% | 9% | ||
| New Zealand | 8% | 8% | ||
| Italy | 6% | 5% | ||
| People's Republic of China and Hong Kong | 6% | 6% | ||
| Belgium | 5% | 5% | ||
| Czech Republic | 5% | 5% | ||
| South Africa | 5% | 5% | ||
| Other | 14% | 14% | ||
| 100% | 100% | |||
# Revenue and cost of revenue restatement of comparatives Composition of revenue
Customer segmentation Independent Independent customers predominantly include independent restaurants. Independent customers typically generate higher gross margins that more than offsets the higher supply chain costs that we incur in serving these customers. Independent customers use more value-added services, particularly in the areas of product selection and procurement, market trends, menu development, and operational strategy. Chain Chain customers are multi-unit restaurants which includes fine dining, family and casual dining, as well as hotels, healthcare facilities, and other multi-unit institutional customers. Logistics Logistics customers are predominately quick serve restaurants (QSR) whereby the customer instructs which suppliers are to be used for procurement and when to deliver the product to the customer. Retail Retail customers predominately include independent retailers. Revenue recognition Revenue is recognised from the sale of goods and is measured at the amount of the transaction price received in exchange for transferring goods. The transaction price is the expected consideration to be received, to the extent that it is highly probable that there will not be a significant reversal of revenue in future, after deducting discounts, volume rebates, value added tax and other sales taxes. Control of the goods is passed when title and insurance risk have passed to the customer, which is typically when the goods have been delivered to an agreed location. When the period of time between delivery of goods and subsequent payment by the customer is less than one year, no adjustment for a financing component is made. Revenue from services rendered is recognised in profit or loss in proportion to the stage of completion of the transaction at reporting date. The stage of completion is time based and dependent on the terms of the contract. Revenue from commissions and fees is recognised in the statement of profit or loss in proportion to the stage of completion of the transaction at the statement of financial position date. Revenue restatement Following a reassessment of the group's judgements of agent versus principal it was detected that Bidfood Netherlands (Europe segment) was acting as an agent, instead of as principal on certain chilled food deliveries. To reflect this restatement, the comparative revenue and cost of revenue were restated as set out below:
This restatement had no impact on the group's gross profit, earnings per share, headline earnings per share or statement of financial position. IFRS 15: Revenue from Contracts with Customers transitional application As at July 1 2018 there was no significant impact from the adoption of IFRS 15 Revenue from Contracts from Customers due to the group not being involved in material multiple-element arrangements with customers. Therefore, no transition adjustments have been processed to retained earnings. The majority of the group's revenue is earned through the sale of goods relating to frozen, ambient, chilled and other non-food products. |
| 2019 R'000 |
2018 R'000 |
|||||
| 4.2 | Operating profit | |||||
| Determined after charging (crediting) | ||||||
| Auditors' remuneration | 56 920 | 45 608 | ||||
| Group auditor audit fees and related expenses | 44 341 | 36 861 | ||||
| Group auditor related tax, consulting, other related expenses | 4 529 | 4 183 | ||||
| Other audit firm fees and related expenses | 8 050 | 4 564 | ||||
| Depreciation of property, plant and equipment disclosed as continuing operations | 1 186 132 | 1 027 055 | ||||
| Leasehold premises | 91 322 | 74 383 | ||||
| Plant and equipment | 389 218 | 334 769 | ||||
| Office equipment, furniture and fittings | 165 256 | 140 235 | ||||
| Vehicles | 540 336 | 477 668 | ||||
| Depreciation of property, plant and equipment disclosed as discontinued operations | 12 510 | 35 640 | ||||
| PCL | 12 510 | 16 284 | ||||
| Best Food Logistics | – | 19 356 | ||||
| Amortisation of intangible assets disclosed as continuing operations | 144 068 | 129 271 | ||||
| Patents, trademarks, tradenames and other intangibles | 39 397 | 38 019 | ||||
| Computer software | 104 671 | 91 252 | ||||
| Amortisation of intangible assets disclosed as discontinued operations | 135 | 23 429 | ||||
| PCL | 135 | 20 353 | ||||
| Best Food Logistics | – | 3 076 | ||||
| Directors' emoluments (full details of executive and non-executive remuneration is included in note 11.2) | ||||||
| Executive directors | 46 579 | 44 322 | ||||
| Basic remuneration | 21 573 | 20 304 | ||||
| Retirement and medical benefits | 722 | 690 | ||||
| Other benefits and costs | 452 | 446 | ||||
| Cash incentives | 23 832 | 22 882 | ||||
| Non-executive director emoluments | 12 644 | 11 351 | ||||
| Employer contributions to | 1 053 784 | 865 932 | ||||
| Defined contribution pension funds | 313 670 | 261 350 | ||||
| Provident funds | 24 964 | 20 996 | ||||
| Retirement funds | 67 659 | 25 275 | ||||
| Social securities | 591 590 | 503 752 | ||||
| Medical aids | 55 901 | 54 559 | ||||
| Defined benefit pension plans related expenses | 16 357 | 17 103 | ||||
| Share-based payment expense disclosed as continuing operations (refer note 11.1) | 114 468 | 99 236 | ||||
| Bidvest Incentive Scheme (BIS) | 11 416 | 23 001 | ||||
| Bid Corporation Limited Share Appreciation Rights Plan (SARs) | 61 577 | 45 212 | ||||
| Bidcorp Conditional Share Plan (CSP) | 41 475 | 31 023 | ||||
| Staff costs excluding directors' emoluments and employer contributions | 14 118 402 | 12 567 203 | ||||
| Foreign exchange losses (gains) on hedging activities | 9 570 | (25 379) | ||||
| Forward exchange contracts | 9 545 | (25 276) | ||||
| Foreign bank accounts | 25 | (103) | ||||
| Foreign exchange (gains) losses | (25 247) | 4 678 | ||||
| Realised | (19 360) | (1 971) | ||||
| Unrealised | (5 887) | 6 649 | ||||
| Operating lease charges | 1 070 956 | 1 004 348 | ||||
| Land and buildings | 766 265 | 708 855 | ||||
| Equipment and vehicles | 304 691 | 295 493 | ||||
| Transport costs | 3 276 358 | 2 602 648 | ||||
| Fuel | 868 200 | 662 970 | ||||
| Vehicle running and transport costs (repairs, road tax, etc) | 1 417 676 | 1 202 364 | ||||
| Freight out | 990 482 | 737 314 | ||||
| Impairment of assets relating to continuing operations# | 49 338 | 90 855 | ||||
| Property, plant and equipment | 27 992 | 25 833 | ||||
| Intangible assets | 21 346 | 5 347 | ||||
| Goodwill | – | 58 079 | ||||
| Investment held at fair value through other comprehensive income | – | 1 329 | ||||
| Associates | – | 267 | ||||
| Net capital profit# | (93 444) | (32 464) | ||||
| Profit on disposal of property, plant and equipment | (93 444) | (15 318) | ||||
| Loss on disposal of interests in subsidiaries | – | 9 050 | ||||
| Gain from bargain purchase | – | (4 222) | ||||
| Insurance proceeds received in relation to the impairment of property, plant and equipment | – | (21 974) | ||||
| # Items above included as capital items on consolidated statement of profit or loss | (44 106) | 58 391 | ||||
| 4.3 | Segmental operational performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The group has the following strategic segments: Australasia, United Kingdom, Europe, Emerging Markets, and Corporate, which are the reportable segments. The reportable segments of the group have been identified based on the regions of the businesses. This basis is representative of the internal structure for management purposes and management reports are reviewed by the executive management team on a monthly basis. “Segmental trading profit” is defined as operating profit excluding items of a capital nature and is the basis on which management’s performance is assessed. Share-based payment costs are also excluded from the result as this is not a criteria used in the management of the reportable segments. There is no individual customer who contributes more than 10% to the group’s total revenue. The segmental comparatives for notes 4.3, 7.1, 7.2, 7.6 and 7.8 have been re-presented to reflect PCL as a discontinued operation separately from continuing operations and the reclassification of BidOne (which provides e-commerce support services and project upgrades for the “mybidfood” application used by group entities) from Australasia to Corporate.
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