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BIDVEST PLC - Results for the year ended June 30 2003
THE BIDVEST GROUP LIMITED
(INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA)
(REGISTRATION NUMBER 1946/021180/06)
SHARE CODE: BVT ISIN CODE: ZAE 000008132
("BIDVEST" OR "THE GROUP")
BIDVEST PLC
Results for the year ended June 30 2003
Bidvest plc is listed on the Luxembourg and Australian Stock Exchanges and
comprises 3663 First for Foodservice in the United Kingdom, Bidvest First for
Foodservice in Australia and Crean First for Foodservice in New Zealand.
Bidvest plc is the 80.7% held international foodservice subsidiary of The
Bidvest Group Limited in South Africa.
- Revenue GBP 1.4 billion +7%
- Operating income GBP 39.9 million +26%
- Income attributable to shareholders GBP 26.6 million +28%
- Headline earnings per share 14.14 p +21%
- Dividend per share 4.45 p +24%
3663 FIRST FOR FOODSERVICE (UNITED KINGDOM)
- Revenue increased by 7% and operating profit increased by 26%
- Another year of strong growth in a subdued market
- Further increase in return on funds employed (ROFE)
- Acquisition of Swithenbank, a fresh and chilled product distributor
- mymarket.com implemented successfully
- Included in the United Kingdom"s "Sunday Times 100 Best Companies To Work For"
BIDVEST FIRST FOR FOODSERVICE (AUSTRALIA)
- Revenue increased by 3% and operating income increased by 23% in local
currency
- Acquisition of a small distributor in Perth in October 2002 - the division"s
first entrance into the West Australian market
- Acquisition of Coastwide Wholesalers on the Central Coast of New South Wales
in April 2003
- Post year-end acquisition of Macmont Hospitality Supplies, servicing the South
Australian and Victorian markets
- Disposal of the retail focused Darwin business acquired as part of the John
Lewis acquisition
- Continued co-branding of all businesses as "Bidvest First for Foodservice"
CREAN FIRST FOR FOODSERVICE (NEW ZEALAND)
- Revenue increased by 11% and operating income increased by 33% in local
currency
- Nationwide distribution contract for a major international fast food group won
- Basket of goods offered to customers increased by over 10%
- Substantial improvement in ROFE
- Currently building a new multi-temperature distribution centre in Rotorua
- Table Talk in Whangarei (North Island) acquired in March 2003
Brian Joffe, Executive Chairman, commented:
"Bidvest plc has delivered another set of superb results. A number of small, but
strategic acquisitions were made in all three divisions extending the geographic
spread and range of products and services offered."
Fred Barnes, Chief Executive, 3663 First for Foodservice
"3663 First for Foodservice increased market share in the United Kingdom to
produce excellent results in a subdued market. All units performed well
achieving strong growth, whilst continuing to provide superior customer
service."
Bernard Berson, Managing Director, Bidvest Australasia
"Both the Australian and New Zealand businesses performed well and continue to
focus on improving their financial performance and leadership positions in their
respective markets."
August 12 2003
Enquiries:
Bidvest plc Tel: + 27 (11) 772 8700
Brian Joffe, Chairman
Jack Hochfeld, Investor Relations
David Cleasby, Investor Relations
Beachhead Media and Investor Relations Tel: +27 (11) 214 2400
Jennifer Cohen
Jaqui Swan
BIDVEST PLC
UNAUDITED RESULTS FOR THE YEAR ENDED JUNE 30 2003
HIGHLIGHTS
Revenue +7%
Operating income +26%
Income attributable to shareholders +28%
Headline earnings per share +21%
Dividend per share +24%
CONSOLIDATED INCOME STATEMENT
for the year ended June 30
Unaudited Audited Change on
GBP000"s Note 2003 2002 last year
Revenue 2 1,381,190 1,288,647 +7%
Cost of revenue (1,095,412) (1,037,127)
Gross income 285,778 251,520 +14%
Operating expenses (245,923) (219,830)
sales and
distribution costs (150,436) (138,789)
administrative
expenses (80,751) (67,825)
other income (costs) (14,736) (13,216)
Operating income 2 39,855 31,690 +26%
Goodwill amortisation (1,253) (1,158)
Abnormal item - (1,403)
Net income before
finance charges 38,602 29,129 +33%
Net finance charges (575) (733)
Income before taxation 38,027 28,396 +34%
Taxation (11,439) (7,619)
Income attributable
to shareholders 26,588 20,777 +28%
Number of shares
in issue
(weighted 000) 196,851 196,447
Headline earnings
per share 3
British pence 14.14 11.73 +21%
Australian cents 38.43 32.45 +18%
Earnings per
share - pence 13.51 10,58 +28%
Diluted earnings
per share - pence 13.24 10.43 +27%
Dividend per share 6
British pence 4.45 3.60 +24%
Australian cents 11.50 9.92 +16%
CONSOLIDATED CASH FLOW STATEMENT
for the year ended June 30
Unaudited Audited
GBP000"s Note 2003 2002
Cash flow from
operating activities 33,929 43,988
Cash generated
by operations 4 50,154 58,489
Net finance charges (575) (733)
Taxation paid (7,776) (6,811)
Dividends paid (7,874) (6,957)
Cash effects of
investment activities (21,717) (40,458)
Fixed asset additions (20,481) (15,990)
Proceeds on disposal of
fixed assets 483 461
Disposal of business 3,889 -
Acquisition of businesses (5,608) (24,929)
Cash effects of
financing activities (1,250) 4,790
Proceeds from share issues 557 36
Interest-bearing debt
raised (repaid) (1,807) 4,754
Cash inflow 10,962 8,320
Liquid funds at the
beginning of the year 66,490 58,282
Foreign exchange adjustments 237 (112)
Liquid funds at the
end of the year 77,689 66,490
CONSOLIDATED BALANCE SHEET
at June 30
Unaudited Audited
GBP000"s 2003 2002
Assets
Non-current assets 102,997 95,285
Fixed assets and investments 82,470 74,708
Intangible assets 18,738 19,374
Deferred tax asset 1,789 1,203
Current assets 262,908 235,813
Inventories 58,933 57,687
Receivables 126,286 111,636
Liquid funds 77,689 66,490
Total assets 365,905 331,098
Equity and liabilities
Shareholders" interest 127,080 105,232
Current liabilities 238,825 225,866
Accounts payable 196,555 188,778
Taxation 6,530 2,440
Deferred tax liability 1,787 2,087
Interest-bearing debt 33,953 32,561
Total equity and liabilities 365,905 331,098
Number of shares in issue (000) 197,282 196,467
Net asset value per share
British pence 64.42 53.56
Australian cents 158.49 145.44
STATEMENT OF CHANGES IN SHAREHOLDERS" INTEREST
for the year ended June 30
Unaudited Audited
GBP000"s 2003 2002
Shareholders" interest at the
beginning of the year 105,232 91,086
Share capital issued for
cash - options 21 1
Share premium - options 536 35
Non-distributable reserves
- exchange fluctuations 2,801 650
Distributable reserve 18,490 13,460
- income for year 26,588 20,777
- dividends declared (7,871) (7,045)
- goodwill exchange fluctuations (227) (272)
Shareholders" interest at the
end of the year 127,080 105,232
Performance ratios
Income before tax/revenue 2.8% 2.2%
Income after tax/equity interests 20.9% 19.7%
NOTES
for the year ended June 30
Unaudited Audited Change on
GBP000"s 2003 2002 last year
1. This preliminary
announcement is based
on South African statements
of Generally Accepted
Acounting Practice. The
policies applied are
those set out in the
annual report and accounts
for the year ended
June 30 2002. The preliminary
announcement should therefore
be read in conjunction
with the 2002 annual
report and accounts. The
full 2003 directors" report
and financial statements
for the group will be
distributed to shareholders
in September 2003.
2. THE PRINCIPAL ACTIVITIES
may be analysed as follows:
Revenue
United Kingdom - trading 643,466 598,425 +8%
- logistics 430,761 402,498 +7%
Australasia 306,963 287,724 +7%
1,381,190 1,288,647 +7%
Operating income
United Kingdom 31,986 25,417 +26%
Australasia 8,392 6,733 +25%
Corporate (523) (460)
39,855 31,690 +26%
Funds employed
United Kingdom 33,500 27,902
Australasia 40,530 31,549
Corporate (2,772) (4,071)
71,258 55,380
3. HEADLINE EARNINGS
Income attributable to
shareholders (per income
statement) 26,588 20,777
Goodwill amortisation 1,253 1,158
Abnormal item
(acquisition costs) - 1,403
Tax effect of abnormal item - (300)
27,841 23,038 +21%
4. CASH GENERATED BY OPERATIONS
Operating income 38,602 29,129
Amortisation 1,253 1,158
Depreciation 16,147 14,213
Other non-cash movements (125) 350
Working capital (5,723) 13,639
Cash generated by operations 50,154 58,489
5. The above preliminary
results may be reconciled to
Australian Generally
Accepted Accouting Practice
("A GAAP") as follows:
Income before taxation 39,855 28,396
Additional goodwill
amortisation (3,637) (4,400)
Income before taxation
in accordance
with A GAAP 36,218 23,996 +51%
Earnings per share (pence) 11.66 8.34 +40%
Shareholders" interest 127,080 105,232
Adjustment for
capitalised goodwill 57,445 61,169
Shareholders" interest
in accordance
with A GAAP 184,525 166,401 +11%
Net asset value per
share (pence) 93.53 84.70 +10%
6. Dividends per share
for the year are as
follows: per share per share
Interim dividend (pence) 2.20 1.80
Final dividend (pence) 2.25 1.80
4.45 3.60 +24%
Interim dividend (AUD cents) 6.00 4.92
Final dividend (AUD cents) 5.50 5.00
11.50 9.92 +16%
No Australian franking credits are available as Bidvest plc is incorporated in
the Isle of Man.
COMMENT
Bidvest plc reports pleasing results for the year ended June 30 2003 in the
face of challenging market conditions. Operating income increased by 26% to
GBP39.9 million (2002: GBP31.7 million) and headline earnings per share
increased by 21% to 14.14 pence per share (2002: 11.73 pence per share).
UNITED KINGDOM
3663 First for Foodservice has built upon a strong first half of the financial
year and has continued to achieve turnover growth in a difficult market. A small
acquisition was made in the second half of the year to enhance the product
range.
The Multi-Temperature division, the largest division, continued to demonstrate
its ability to grow sales and profit in a subdued marketplace. The Frozen
Products division maintained the sales growth experienced last year to make a
profit this year. Both businesses increased operating margins by achieving
further operational and buying improvements to offset pressure on overhead
costs.
The Logistics division has produced a good set of results for the year, despite
facing challenging conditions. Central Distribution achieved efficiencies in
costs and greater utilisation of facilities which, combined with new accounts
won in the latter part of the previous financial year, enhanced profitability.
The MoD operation continued to make financial progress.
AUSTRALASIA
Bidvest First for Foodservice in Australia experienced satisfactory growth
despite flat market conditions, with organic sales growth of around 8%.
Profitability increased considerably in excess of sales growth, reflecting
management"s focus of exiting or renegotiating unprofitable business, combined
with tight control over expenses. A number of small acquisitions were made to
further enhance national coverage. The retail focused business in Darwin
acquired with John Lewis Foodservice was sold in March 2003.
Crean First for Foodservice in New Zealand has continued its strong organic
growth, delivering, in original currency terms, a 34% increase in operating
profit on an 11% increase in revenues.
PROSPECTS
Bidvest plc has a strong, leading market position, with an excellent management
team and a sound financial base on which to sustain its organic growth and
pursue acquisitions. The Group is committed to service its customer base through
investment in modern infrastructure and improvement in operational efficiencies.
Management is budgeting for real growth in earnings for the forthcoming
financial year against the backdrop of subdued market conditions.
INDEPENDENT REVIEW
The results are reviewed but unaudited and do not constitute statutory accounts
but are in the process of being audited by KPMG.
DIVIDEND
A final dividend of 2.25 pence per share, which for shareholders on the
Australian register will be 5.50 AUD cents per share, has been declared to
shareholders registered in the books of the Company at the close of business on
August 28 2003. Dividend cheques will be posted on or about September 9 2003.
For and on behalf of the board
B Joffe PJ Wentzel
Chairman Director
August 12 2003
DIRECTORS
B Joffe (Chairman), FJ Barnes, BL Berson, KH Bielby, M Chipkin, EM Cowley*, A
Fisher, CH Kretzmann, P Nyman*, JL Pamensky*, TH Reitman* DK Rosevear*, A
Selley, PJ Wentzel*
*Non-executive
REGISTRATION NUMBER: 92157C
TRANSFER SECRETARIES
Bid Corporate Services (IOM) Limited, Murdoch Chambers, Douglas Head Road, South
Quay, Douglas, Isle of Man, IM1 5AS
Computershare Limited, Level 3, 60 Carrington Street, Sydney, NSW 1115,
Australia
ADMINISTRATION AND REGISTERED OFFICE
Murdoch Chambers, Douglas Head Road, South Quay, Douglas, Isle of Man, IM1 5AS,
Website
www.bidvest-plc.com
OPERATIONAL REVIEW
3663 FIRST FOR FOODSERVICE (UNITED KINGDOM)
3663 First for Foodservice recorded revenue growth across all its business
areas. The 7% revenue growth was shared equally by the Trading and Logistics
divisions. Within the Trading division, the growth was spread across the
independent and national sectors, importantly maintaining the balance of sales
between these complementary segments of the market. Both the Multi-temperature
and Frozen divisions were successful in winning new customers across the entire
market spectrum.
Both business areas of the Logistics division, Central Distribution and the
Ministry of Defence operation (MoD), recorded higher revenues. The bulk of the
increase in the Central Distribution business was due to the full year impact of
the new business won in the previous year.
Whilst the volume growth was a strong contributor to the improved operating
income, further benefits were derived from increased purchasing power as
suppliers recognise the strengths that 3663 First for Foodservice brings in
facilitating access to the entire market for their products.
A new Frozen hub operation, utilising capacity at the Central Distribution
facility in Oldham was opened to service the north of the country, which has
resulted in significant benefits in the spoke depots served by this facility.
In addition to serving the armed forces in the United Kingdom, the MoD division,
which was awarded the National Business Award for Supply Chain Strategy,
continued its work in Afghanistan and opened a depot in Kuwait to serve the
forces posted to that region for the conflict in Iraq.
The acquisition of Swithenbank was completed in the second half of the year.
This acquisition forms an important part of the strategy to extend the products
and services that 3663 First for Foodservice provides to the foodservice
marketplace.
3663 First for Foodservice was included in the "Sunday Times 100 Best Companies
to Work For" in the United Kingdom. The award illustrates management"s
commitment to the fact that its people are 3663 First for Foodservice"s most
important asset.
BIDVEST FIRST FOR FOODSERVICE (AUSTRALIA)
In local currency operating income increased by 23%, on an increase in revenue
of 3%, a most pleasing result. Revenues were impacted by the effect of the
Darwin disposal in March 2003, as well as by the continued review and exit from
low margin, unprofitable business acquired as part of the John Lewis
acquisition. On an annualised basis, Bidvest First for Foodservice has now
exited in excess of A$40 million in low margin business and it is believed that
this process is now substantially complete. Excluding the impact of the business
exited, organic growth for the year was over 8%.
Continued focus was placed on working capital management, which has resulted in
better inventory turns as well as improved debtor days. Expense control remains
a priority, but this has proved a challenge with increased labour cost pressures
and a high fuel price for the majority of the year. The business also
experienced abnormally high increases in insurance costs as a result of global
insurance factors. Overall insurance costs increased by over A$1 million and
have been absorbed in the results.
The online ordering and web-enabled customer interaction site, FindFoodFast,
continued to gain momentum. Management believes that continued investment in
technological change will provide market differentiation for Bidvest First for
Foodservice and assist it to sell service rather than just on selling price.
In October 2002 a small distributor in Perth was acquired, providing a
springboard into the West Australian market. This business currently specialises
in frozen product to the route and school markets, but the facility is being
expanding to include dry goods. In April 2003, Coastwide Wholesalers on the
Central Coast of New South Wales was acquired, and on July 1 2003, Macmont
Hospitality Supplies was acquired. Macmont sells a broad range of cutlery,
crockery, glassware, light catering equipment and related products to the South
Australian and Victorian market, and gives Bidvest First For Foodservice the
opportunity to expand this product offering through its extensive national
distribution network.
In order to focus on the division"s core competency of foodservice distribution,
the primarily retail focused Darwin business was sold back to the vendors from
whom John Lewis was acquired, with effect from March 2003.
CREAN FIRST FOR FOODSERVICE (NEW ZEALAND)
Crean First for Foodservice"s results were good with steady growth in revenue,
improvement in profitability and better working capital management, which all
combined to achieve, in local currency, a 33% increase in operating income and a
substantial improvement in ROFE. An 11% increase in revenue, in local currency,
was recorded despite NZ$3 million of retail business being exited in line with
the strategy to focus on the foodservice market.
Crean First for Foodservice won the nationwide distribution contract for a major
international fast food group, which is enjoying rapid growth in New Zealand
with new stores opening every month.
Crean First for Foodservice is currently building a new multi-temperature
distribution centre in Rotorua. A small wholesaler, Table Talk, in Whangerei on
the North Island was acquired in March 2003 in order to further expand national
coverage.
Date: 13/08/2003 08:12:05 AM Supplied by www.sharenet.co.za
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