Sharenet Sites 
Sharenet Sites
Divisional Day - November 24 2015 - Management update on general trading conditions
The Bidvest Group Limited
(Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06)
Share code: BVT
ISIN ZAE000117321
("Bidvest" or "the Company")
Divisional Day – November 24 2015
Management update on general trading conditions
Shareholders are advised that the executive management of the group today
met with members of the financial community, including shareholders and
financial analysts, for an update on current market conditions and the Group’s
trading environment.
Management commented as follows:
1. Current market conditions and trading
Bidvest Industrial Holdings (incorporating Bidvest South Africa and Bidvest
Namibia)
- As noted in the 2015 financial results, trading conditions in South
Africa have remained tough in the quarter ended September 30
2015, a continuation of the environment experienced in the latter
part of the 2015 financial year. October trading picked up a little.
During these tough times, management are aggressively managing
the cost base and funds employed in the businesses.
- The acquisition of Plumblink, an industrial products supply
business, was concluded with effect from July 2015. Early
indications are that its performance is in line with management’s
expectations.
- Weak consumer demand in the automotive market, the impact of
the decline in demand for commodities and the decline in the
agricultural products exports have adversely affected a number of
divisions. On the positive side, new asset based leasing contracts
in Financial Services, the growth in the Industrials division
combined with the inclusion of Plumblink for the first time and solid
performances in Consumer Products, Electrical, Office and
Paperplus divisions are supporting growth.
- Business development activities into our broad customer base are
yielding positive results, with a number of new contracts having
been acquired. This has been facilitated by effective cross-
divisional cooperation to win new business and gain market share.
- Macro factors such as low growth, the weak currency and latterly
drought conditions in many parts of the country are undermining
business confidence in the South African economy.
- The overall trading results for the South Africa operations to the
end of October are slightly ahead of those for the comparative
period.
- Management continues to pursue opportunities to expand the
range of services and products offered and the geographic footprint
of the businesses.
- As a management principle, Bidvest Industrial Holdings will not be
captive to the macro situation it faces and so the businesses are
trading aggressively to perform at the forefront of their respective
markets. Bolt-on acquisitions are considered as they arise.
- Amended BBBEE codes have been implemented by government
and all businesses are making excellent progress in adapting to the
changes that are required in the BBBEE journey.
- Business activity into Africa continues through exports with a focus
of expanding our agent and dealer representation.
- The trading results in Bidvest Namibia are disappointing. Fishing
continues to be negatively affected by the direct horse mackerel
quota reduction as well as the availability of bought-in quota.
Management continues to engage with the authorities in this regard
in the interests of securing industry sustainability and remedies.
Most of the Commercial operations are operating well. Remedial
action is being aggressively undertaken in Food and Distribution in
order to restore growth. With effect from August 2015, Bidvest
Namibia acquired the Novel Motor Company which will serve to
broaden the business base. Initial indications are that performance
is in line with budgeted expectations. Overall business
improvement strategies continue to be pursued.
Food Group (including Food South Africa)
- The solid momentum achieved by the Food Group in the 2015
financial year continued into the 1st quarter of the 2016 financial
year. Solid results are being achieved by most of the component
parts of the division with particularly pleasing performances in
Bidvest Foodservice UK, Bidvest Czech Republic and Slovakia,
Angliss Greater China and the Australasian region.
- Trading results translated into South African Rand have been
assisted by Rand weakness although the benefit is not material to
the division.
- The pleasing performance of the foodservice businesses has been
achieved against a backdrop of minimal or non-existent food
inflation. Costs remain well controlled although wage costs are
under pressure in certain more buoyant economies as
unemployment declines and staff shortages become real.
- Management remains focused on executing on the strategic plan to
balance their customer portfolios and to focus on adding value to
our foodservice customer offering through innovation and service
delivery.
- Trading through October remained positive and a good result is
expected for the half year to December 2015.
Corporate
- Cumulative portfolio fair value and investment gains are higher than
the comparative 1st quarter, but not significantly so.
2. General
- Acquisitions update:
o Adcock Ingram:
- Based on the recently announced restructure of the
board and management, we expect this to position the
company for the next expansionary phase of its
development.
- As announced, the underperforming investments,
notably Africa and India, are being addressed.
- The internal restructuring of the Group as announced on October 7
2015 is in progress.
- Management remains motivated and is optimistic despite difficult
trading environments, particularly in Southern Africa. Innovation is a
key driver as a means of managing margins, costs and returns.
- Management continues to seek out acquisition opportunities both
locally and abroad.
A full recording of the presentation is available on the group’s website
www.bidvest.co.za
This management update has not been reviewed or reported on by the
Company’s independent auditors.
______________________________________________________________
Johannesburg
November 24, 2015
Sponsor
Investec Bank Limited
Date: 24/11/2015 01:52:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
