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Bidvest - Bidvest Plc Results For The Half Year Ended December 31 2003

Release Date: 12/02/2004 07:19
Code(s): BDEO BVT
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Bidvest - Bidvest Plc Results For The Half Year Ended December 31 2003 Bidvest Group Limited (INCORPORATED IN THE REPUBLIC OF SOUTH AFRICA) (REGISTRATION NUMBER 1946/021180/06) SHARE CODE: BVT ISIN: ZAE000050449 ("BIDVEST") Bidvest plc exceeds expectations and delivers excellent results in flat market 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 81% held international foodservice subsidiary of The Bidvest Group Limited in South Africa. Highlights - Revenue GBP785.8 million +14% - Operating income GBP24.7 million +24% - Income attributable to shareholders GBP16.5 million +23% - Headline earnings per share 8.72 pence +22% - Dividend per share 2.70 pence +23% Bidvest plc performed ahead of expectations for the six months ended December 31 2003, helped by a strengthening in the Australian dollar/Sterling exchange rate which added GBP0.8 million to operating income. The Company posted a 22% rise in headline earnings per share to 8.72 pence and a 24% rise in operating income to GBP24.7 million. This was achieved on a 14% gain in revenue to GBP785.8 million. A notable feature of the results was the margin expansion. This was the result of an ongoing focus on cost containment and the improvement in operational efficiencies. Cash flow from operating activities increased to GBP26.8 million (2002: GBP12.2 million). This allowed for a substantial GBP18.9 million (2002: GBP10.2 million) investment in infrastructure and acquisitions creating capacity for future expansion. "Management is commended on achieving growth in flat markets" says Chairman Brian Joffe. In the UK, 3663 First For Foodservice performed admirably and continues to post turnover growth and market share gains in a difficult market. This is one of the leading foodservice products distribution companies in the UK, and comprises two divisions: Trading (Multi-Temperature, Frozen, Fresh and Chilled), and Logistics. Chief Executive Fred Barnes says "All divisions performed well, increasing operating margins by achieving further operational and buying improvements to offset pressure on overhead costs." Multi-Temperature is the largest division and continued to grow revenue and profits notwithstanding a subdued market. Frozen Products sustained the momentum in sales growth established last year, significantly improving its profitability. It was also a good trading period for the Logistics division, despite challenging market conditions. Bidvest First for Foodservice in Australia did well in a stable economic environment with organic sales growth of 8%. Five small acquisitions were made during the period, complementing the existing business. Crean First for Foodservice in New Zealand had an excellent trading period, delivering a 40% gain in operating profit (in original currency terms) on a 16% rise in revenues. Most of this growth was organic, though two small acquisitions were made during the period enhancing the company"s national coverage. "Both the Australian and New Zealand businesses have shown pleasing performances, growing revenue and expanding margins further enhancing returns on the investment in their respective national infrastructure" says Managing director Bernard Berson. Looking forward, Mr Joffe says the Group"s strong market position, supported by an excellent management team, have established a stable platform for further organic growth. Acquisitions to support the Group"s continued growth will be pursued. A dividend of 2.70 pence per share (6.50 Australian cents per share) has been declared. Issued on behalf of: The Bidvest Group Limited By: Clear Distinction Communications Bidvest Contacts: Brian Joffe (Chairman) Tel: + 44 (0) 20 7493 4733
Tel: + 27 (0) 11 772 8704 David Cleasby (Investor Relations) Tel: +27 (0) 11 772 8706 Consultancy Contact: Carol Dundas Tel: +27 (0) 11 444 0650 Mobile: +27 (0) 83 447 6648 Highlights Revenue 14% Operating income 24% Income attributable to shareholders 23% Headline earnings per share 22% Dividend per share 23% Consolidated income statement for the half year ended December 31 Half year ended Year ended December 31 June 30 Change Reviewed Reviewed Audited on last
GBP000"s Notes 2003 2002 2003 year Revenue 2 785,791 689,369 1,381,190 14% Cost of revenue (608,368) (551,344) (1,095,412) Gross income 177,423 138,025 285,778 29% Operating expenses (152,772) (118,218) (245,923) sales and distribution costs (103,324) (80,583) (165,172) administrative expenses (49,448) (37,635) (80,751) Operating income 2 24,651 19,807 39,855 24% Goodwill amortisation (716) (637) (1,253) Net income before finance charges 23,935 19,170 38,602 25% Net finance charges (317) (287) (575) Income before taxation 23,618 18,883 38,027 25% Taxation (7,136) (5,463) (11,439) Income attributable to shareholders 16,482 13,420 26,588 23% Number of shares in issue (weighted 000) 197,312 196,551 196,851 Headline earnings per share 3 British pence 8.72 7.15 14.14 22% Australian cents 21.10 20.33 38.43 4% Average A$/GBP sterling translation rate 2.42 2.84 2.72 Earnings per share - pence 8.35 6.83 13.51 22% Diluted earnings per share - pence 8.13 6.69 13.24 21% Dividend per share 6 British pence 2.70 2.20 4.45 23% Australian cents 6.50 6.00 11.50 8% Consolidated cash flow statement for the half year ended December 31 Half year ended Year ended
December 31 June 30 Reviewed Reviewed Audited GBP000"s Notes 2003 2002 2003 Cash flow from operating activities 26,832 12,156 33,929 Cash generated by operations 4 37,218 18,918 50,154 Net finance charges (317) (287) (575) Taxation paid (5,636) (2,958) (7,776) Dividends paid (4,433) (3,517) (7,874) Cash effects of investment activities (18,945) (10,214) (21,717) Fixed asset additions (14,268) (8,869) (20,481) Proceeds on disposal of fixed assets 354 143 483 Disposal of business - - 3,889 Acquisition of businesses (5,031) (1,488) (5,608) Cash effects of financing activities 1,554 1,321 (1,250) Proceeds from share issues 87 389 557 Interest-bearing debt raised (repaid) 1,467 932 (1,807) Cash inflow 9,441 3,263 10,962 Liquid funds at the beginning of the period 77,689 66,490 66,490 Foreign exchange adjustments 1,445 (1,067) 237 Liquid funds at the end of the period 88,575 68,686 77,689 Consolidated Balance sheet at December 31 December 31 June 30
Reviewed Reviewed Audited GBP000"s 2003 2002 2003 Assets Non-current assets 114,139 96,039 102,997 Fixed assets and investments 91,731 76,727 82,470 Intangible assets 20,491 18,015 18,738 Deferred tax asset 1,917 1,297 1,789 Current assets 307,263 249,732 262,908 Inventories 75,834 61,671 58,933 Receivables 142,854 119,375 126,286 Liquid funds 88,575 68,686 77,689 Total assets 421,402 345,771 365,905 Equity and liabilities Shareholders" interest 140,332 114,296 127,080 Current liabilities 281,070 231,475 238,825 Accounts payable 233,942 192,468 196,555 Taxation 8,181 5,111 6,530 Deferred tax liability 1,646 2,011 1,787 Interest-bearing debt 37,301 31,885 33,953 Total equity and liabilities 421,402 345,771 365,905 Number of shares in issue (000) 197,392 197,037 197,282 Net asset value per share British pence 71.09 58.01 64.42 Australian cents 168.92 165.84 158.49 Statement of changes in shareholders" interest for the half year ended December 31 Half year ended Year ended December 31 June 30 Reviewed Reviewed Audited GBP000"s 2003 2002 2003 Shareholders" interest at the beginning of the period 127,080 105,232 105,232 Share capital issued for cash - options 2 14 21 Share premium - options 84 376 536 Non-distributable reserves - exchange fluctuations 1,447 (1,724) 2,801 Distributable reserve 11,719 10,398 18,490 - income for period 16,482 13,420 26,588 - dividends declared (4,439) (3,536) (7,871) - goodwill exchange fluctuations (324) 514 (227) Shareholders" interest at the end of the period 140,332 114,296 127,080 Performance ratios Income before taxation/revenue 3.0% 2.7% 2.8% Income attributable to shareholders/equity interests 23.5% 23.5% 20.9% Notes for the half year ended December 31 Half year ended Year ended December 31 June 30 Change Reviewed Reviewed Audited on last GBP000"s 2003 2002 2003 year 1. This preliminary announcement is based on South African Generally Accepted Acounting Practice. The policies applied are those set out in the annual report and accounts for the year ended June 30 2003. The preliminary announcement should therefore be read in conjunction with the 2003 annual report and accounts. 2. The principal activities may be analysed as follows: Revenue United Kingdom - trading 346,211 321,850 643,466 8% - logistics 252,259 215,205 430,761 17% Australasia 187,321 152,314 306,963 23% 785,791 689,369 1,381,190 14%
Operating income United Kingdom 18,854 15,551 31,986 21% Australasia 6,316 4,491 8,392 41% Corporate (519) (235) (523) 24,651 19,807 39,855 24% Funds employed United Kingdom 34,281 29,876 33,500 Australasia 44,835 37,476 40,530 Corporate (2,640) (2,047) (2,772) 76,476 65,305 71,258 3. Headline earnings Income attributable to shareholders(per income statement) 16,482 13,420 26,588 Goodwill amortisation 716 637 1,253 17,198 14,057 27,841 22%
4. Cash generated by operations Operating income 23,935 19,170 38,602 Amortisation 716 637 1,253 Depreciation 7,700 6,901 16,147 Other non-cash movements (58) (28) (125) Working capital 4,925 (7,762) (5,723) Cash generated by operations 37,218 18,918 50,154 5. These preliminary results may be reconciled to Australian Generally Accepted Accouting Practice ("A GAAP") as follows: Income before taxation 24,651 19,807 39,855 Additional goodwill amortisation (1,833) (2,368) (3,637) Income before taxation in accordance with A GAAP 22,818 17,439 36,218 31% Earnings per share (pence) 7.42 5.62 11.66 32% Shareholders" interest 140,332 114,296 127,080 Adjustment for capitalised goodwill 55,806 58,468 57,445 Shareholders" interest in accordance with A GAAP 196,138 172,764 184,525 Net asset value per share (pence) 99.36 87.68 93.53 6. Dividends per share for the year are as follows: per share per share per share Interim dividend (pence) 2.70 2.20 2.20 Final dividend (pence) 2.25 2.70 2.20 4.45 23% Interim dividend (AUD cents) 6.50 6.00 6.00 Final dividend (AUD cents) 5.50 6.50 6.00 11.50 8%
No Australian franking credits are available as Bidvest plc is incorporated in the Isle of Man. Comment Financial and operational review The underlying trading performance of Bidvest plc has been above expectation, enhanced by the strengthening of the average Australian dollar/sterling exchange rate, adding GBP0.8 million to operating income. Operating income increased by 24% to GBP24.7 million (2002: GBP19.8 million) and headline earnings per share increased by 22% to 8.72 pence (2002: 7.15 pence). United Kingdom 3663 First for Foodservice recorded a strong performance achieving revenue growth in a difficult market. A small acquisition was made in the period to augment the product range. The Multi-Temperature division performed admirably, notwithstanding a subdued marketplace. The Frozen Products division made a significant profit, maintaining the sales growth experienced in the previous financial year. Both divisions increased operating margins by achieving further operational and buying improvements to offset pressure on overhead costs. The Logistics division has produced good results, despite challenging conditions. Central Distribution achieved efficiencies in costs on account of greater utilisation of facilities due to robust performance of the main contracts. The MoD operation continued to perform well. Australasia Bidvest Australia performed satisfactorily in a stable economic environment recording a 20% improvement in operating income in its original currency. Organic sales growth was 8% excluding Darwin, a retail sales business sold in March 2003, but included in the comparative period. Five small acquisitions were made, complementing the existing business. Crean First for Foodservice in New Zealand has continued its strong organic growth, delivering, in original currency terms, a 40% increase in operating profit on a 16% increase in revenues. Two small acquisitions were made to further enhance its national coverage. Prospects Bidvest plc has 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 anticipates growth in earnings for the remainder of the financial year against the backdrop of unpredictable market conditions. Independent review Introduction We have been instructed by the Company to review the financial information for the six months ended December 31 2003, which comprises the consolidated income statement, consolidated cash flow statement, consolidated balance sheet, statement of changes in shareholders" interest and accompanying notes. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors" responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim report in accordance with the South African Statement of Generally Accepted Accounting Practice AC127 Interim Financial Reporting, which requires that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts, except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied, unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly, we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended December 31 2003. KPMG Audit LLC, Isle of Man Dividend A dividend of 2.70 pence per share, which for shareholders on the Australian register will be 6.50 AUD cents per share, has been declared to shareholders registered in the books of the Company at the close of business on March 5 2004. Dividend cheques will be posted on or about March 12 2004. For and on behalf of the board B Joffe PJ Wentzel Chairman Director February 11 2004 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 URL www.bidvest-plc.com Bidvest A member of The Bidvest Group Limited Date: 12/02/2004 07:19:36 AM Supplied by www.sharenet.co.za Produced by the JSE SENS Department

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