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Bidvest Group Limited - Audited results for the year ended June 30 2006
The Bidvest Group Limited
Incorporated in the Republic of South Africa
("Bidvest" or "the Group" or "the Company")
Registration Number 1946/021180/06
Share Code: BVT
ISIN: ZAE000050449
Audited results for the year ended June 30 2006
The promise of new life reaches far and wide, where it takes root and starts to
flourish
Appreciation Bidvest acknowledges the contribution of all 93 218 employees to
these pleasing results
Revenue R77,3 billion up by 23%
Operating profit R3,7 billion up by 22%
Headline earnings R2,4 billion up by 22%
Headline earnings per share 804,6 cents up by 23%
Distributions per share 369,0 cents up by 21%
Basis of preparation of financial statements
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS).
Audit report
The consolidated results for the year have been audited by KPMG Inc and their
unqualified audit report is available for inspection at the Company"s registered
office.
Analyst presentation
The presentation to investors will be available on the Bidvest website from
14:00 on September 4 2006.
Condensed income statement for the year ended June 30
2006 2005
Restated Percentage
R000"s Audited Audited change
Revenue 77 276 493 62 811 776 23,0
Cost of revenue (61 589 806) (49 957 282)
Gross profit 15 686 687 12 854 494 22,0
Other income 140 331 122 360
Operating expenses (12 135 511) (9 960 501)
Sales and distribution
expenses (7 215 356) (5 877 351)
Administration expenses (3 606 424) (2 994 130)
Other costs (1 313 731) (1 089 020)
Operating profit 3 691 507 3 016 353 22,4
Net finance charges (342 392) (285 105)
Finance income 66 295 42 291
Finance charges (408 687) (327 396)
Share of profit of associates 48 846 38 846
Dividends received 4 991 6 905
Share of retained earnings 43 855 31 941
Profit before taxation 3 397 961 2 770 094 22,7
Income tax expense (933 418) (797 755)
Profit for the year 2 464 543 1 972 339 25,0
Attributable to:
Shareholders of the Company 2 388 717 1 961 231 21,8
Minority shareholders 75 826 11 108
2 464 543 1 972 339 25,0
Shares in issue R000"s
Total 299 154 299 421
Weighted 299 976 302 700
Diluted weighted 313 826 310 185
Basic earnings per
share (cents) 796,3 647,9 22,9
Headline earnings per
share (cents) 804,6 656,4 22,6
Diluted earnings per
share (cents) 761,2 632,3 20,4
Diluted headline earnings
per share (cents) 769,1 640,6 20,1
Distribution per share
(cents) 369,0 306,0 20,6
* Includes distribution from share premium
HEADLINE EARNINGS
The following adjustments to profit attributable to
shareholders were taken into account in the calculation of
headline earnings:
Income attributable to
shareholders of the Company 2 388 717 1 961 231 21,8
Impairment of goodwill and
other intangibles 14 174 10 292
Net loss on disposal and
closure of businesses 19 951 6 594
Loss (surplus) on disposal
and closure of businesses (29 212) 6 053
Tax charge 49 638 1 822
Minority interest (475) (1 281)
Net loss (surplus) on
disposal of property, plant
and equipment (11 915) 7 762
Loss (surplus) on disposal
of property, plant and
equipment (15 689) 13 410
Tax charge (relief) 3 774 (5 627)
Minority interest - (21)
Negative goodwill recognised
in profit (2 457) -
Negative goodwill recognised
in profit (3 780) -
Minority interest 1 323 -
Share of capital items in
associates 5 059 1 108
Headline earnings 2 413 529 1 986 987 21,5
Rand/Sterling exchange rates
Opening rate 11,532 11,285
Closing rate 13,205 11,957
Average rate 11,435 11,532
Segmental analysis for the year ended June 30
2006 2005
Restated Percentage
R000"s Audited Audited change
SEGMENTAL Revenue
Bidfreight 15 601 922 13 268 320 17,6
Bidserv 4 587 817 4 172 336 10,0
Bidvest Europe 22 132 036 14 836 523 49,2
Bidvest Australasia 6 505 802 5 691 085 14,3
Bidfood 3 666 437 3 254 592 12,7
Bid Industrial and Commercial
Products 6 722 172 5 643 160 19,1
Bidpaper Plus 1 747 690 1 333 805 31,0
Bid Auto 16 197 055 13 628 958 18,8
Corporate Services 1 295 421 1 174 266 10,3
Namsov 378 430 268 387 41,0
Ontime Automotive 893 231 905 879 (1,4)
Investment and other income 23 760 -
Revenue from continuing
businesses 78 456 352 63 003 045 24,5
Revenue from businesses
disposed of 470 052 1 188 984
Inter group eliminations (1 649 911) (1 380 253)
77 276 493 62 811 776 23,0
Operating profit
Bidfreight 536 917 455 860 17,8
Bidserv 554 709 466 865 18,8
Bidvest Europe 651 223 532 753 22,2
Bidvest Australasia 219 403 163 844 33,9
Bidfood 299 813 316 227 (5,2)
Bid Industrial and
Commercial Products 483 320 383 284 26,1
Bidpaper Plus 201 980 176 928 14,2
Bid Auto 621 264 474 672 30,9
Corporate Services 108 698 92 124 18,0
Bidprop 58 039 49 049 18,3
Namsov 75 925 12 589 503,1
Ontime Automotive 7 348 (49) -
Investment, other income
and corporate expenses (32 614) 30 535 -
Trading profit from
continuing businesses 3 677 327 3 062 557 20,1
Trading losses from
businesses disposed of (20 327) (16 449)
TRADING PROFIT 3 657 000 3 046 108 20,1
Net capital profits (losses) 44 901 (19 463)
Impairment of goodwill and
other intangible assets (14 174) (10 292)
Negative goodwill 3 780 -
OPERATING PROFIT 3 691 507 3 016 353 22,4
Condensed cash flow statement for the year ended June 30
2006 2005
Restated
R000"s Audited Audited
Cash flow from operating activities 2 352 689 2 416 284
Operating profit 3 691 507 3 016 353
Dividends received from associates 4 991 6 905
Depreciation and other non-cash items 954 879 832 643
Changes in working capital (161 019) 344 548
Cash generated by operations 4 490 358 4 200 449
Net finance charges paid (258 582) (211 897)
Taxation paid (863 495) (742 364)
Distributions: Company (992 408) (812 592)
Minorities (23 184) (17 312)
Cash effects of investment activities (2 368 372) (2 223 714)
Net additions to vehicle rental fleet (298 251) (131 624)
Net additions to property, plant and
equipment (1 454 153) (1 204 447)
Net additions to intangible assets (100 613) (52 184)
Net acquisition of subsidiaries,
businesses, associates and investments (515 355) (835 459)
Cash effects of financing activities 842 777 (842 050)
Proceeds from shares issued 180 274 177 061
Repurchase of treasury shares (508 810) (532 058)
Net borrowings raised (repaid) 1 171 313 (487 053)
Net increase (decrease) in cash and
cash equivalents 827 094 (649 480)
Cash and cash equivalents at the
beginning of the year 1 497 683 2 100 982
Currency adjustments 222 218 46 181
Cash and cash equivalents at the
end of the year 2 546 995 1 497 683
Cash equivalents are made up as follows:
Cash on hand and in the bank 3 255 457 1 707 932
Bank overdrafts shown as current portion
of interest-bearing debt (708 462) (210 249)
2 546 995 1 497 683
Condensed balance sheet as at June 30
2006 2005
Restated
R000"s Audited Audited
ASSETS
Non-current assets 10 606 995 8 423 459
Property, plant and equipment 5 511 253 4 303 123
Intangible assets 378 808 321 246
Goodwill 3 123 722 2 530 700
Deferred taxation 398 411 221 523
Interest in associates 574 893 493 684
Investments and advances 544 923 511 983
Banking and other advances 74 985 41 200
Current assets 17 387 506 12 699 872
Vehicle rental fleet 479 326 249 155
Inventories 5 092 821 4 024 025
Short-term portion of banking and other
advances 142 718 105 979
Trade and other receivables 8 417 184 6 612 781
Cash and cash equivalents 3 255 457 1 707 932
Total assets 27 994 501 21 123 331
EQUITY AND LIABILITIES
Capital and reserves 9 158 695 7 642 424
Shareholders of the company 8 928 995 7 468 866
Minority shareholders 229 700 173 558
Non-current liabilities 3 677 777 1 956 441
Deferred taxation 202 907 87 401
Life assurance fund 32 795 13 265
Long-term portion of borrowings 3 093 184 1 513 871
Post-retirement obligations 221 092 218 752
Long-term portion of banking liabilities 278 155
Operating lease liability 127 521 122 997
Current liabilities 15 158 029 11 524 466
Trade and other payables 12 562 695 9 544 144
Provisions 324 667 254 813
Vendors for acquisition 41 795 -
Taxation 501 245 448 242
Short-term portion of banking liabilities 113 265 94 468
Short-term portion of borrowings 1 614 362 1 182 799
Total equity and liabilities 27 994 501 21 123 331
Number of shares in issue (000) 299 154 299 421
Net tangible asset value per share (cents) 1 814 1 542
Statement of changes in equity for the year ended June 30
2006 2005
Restated
R000"s Audited Audited
Shareholders" interest
Issued share capital 14 958 14 971
- balance at the beginning of the year 14 971 15 108
- in terms of the share incentive scheme 238 240
- repurchase of shares by subsidiary (251) (377)
Share premium arising on shares issued 1 228 660 2 549 591
- balance at the beginning of the year 2 549 591 3 511 901
- in terms of the share incentive scheme 180 217 177 349
- refund of share premium to shareholders (992 408) (607 450)
- repurchase of shares by subsidiary (508 559) (531 681)
- share issue costs (181) (528)
Foreign currency translation reserve 807 033 466 019
- balance at the beginning of the year 466 019 (20 859)
- realised on disposal of subsidiaries (20 562) -
- arising during the period 361 576 486 878
Statutory reserves 10 013 6 039
- balance at the beginning of the year 6 039 4 240
- transfer from retained earnings 3 974 1 799
Equity-settled share-based payment reserve 107 724 57 828
- balance at the beginning of the year 57 828 20 248
- arising during the year 49 896 37 580
Movement in retained earnings 6 760 607 4 374 418
- balance at the beginning of the year 4 374 418 2 620 128
- income attributable to shareholders 2 388 717 1 961 231
- change in fair value of available-
for-sale equity securities 1 446 -
- dividends and capitalisation issues - (205 142)
- transfer to statutory reserves (3 974) (1 799)
8 928 995 7 468 866
Minority shareholders
- balance at the beginning of the year 173 558 369 435
- attributable profit 75 826 11 108
- dividends and capitalisation issues (23 184) (17 312)
- share of movement in foreign currency
translation reserve 2 659 1 762
- share of movement in equity-settled
share-based payment reserve 154 41
- changes in shareholding 687 (191 476)
229 700 173 558
Total equity 9 158 695 7 642 424
Message to shareholders
Overview
The Group produced very satisfying results for the year ended June 30 2006.
Compound growth achieved in headline earnings per share over the past 18 years
is in excess of 30,0%. Headline earning per share increased by 22,6% with
divisional trading profit increasing by 20,1%. The strong operational results
were enhanced by the full benefits of last year"s share buyback programme.
Corrective action was taken to deal with most of the Group"s underperforming
operations which resulted in a number of disposals.
Revenue growth of 23,0% to R77,3 billion was achieved which included R5,6
billion from Deli XL which was consolidated with effect from September 12 2005.
The total benefit of this top-line growth was not fully realised due to higher
energy costs and costs of increasing capacity. Divisional trading margin
decreased slightly from 5,0% to 4,8% reflecting the nine-month impact of Deli XL
and a change in the profit contribution mix of the various businesses. Exchange
rates, despite the devaluation in the last quarter of the financial year, were
relatively stable and had a slightly negative effect on the translation of the
earnings of the Group"s foreign businesses. The rand traded at an average R11,44
against sterling, compared to R11,53 for the previous year.
Cash generation from the underlying businesses remains strong. Larger but
deliberate working capital investments, further share buybacks, increased
capital expenditure and acquisitive activity resulted in a net utilisation of
funds. The Group"s balance sheet remains strong with interest cover being
approximately 11 times.
The financial results have been presented in conformity with IFRS, the effect of
which has been a 4,4% restatement to the comparative period headline earnings
per share (previously 686,6 cents per share), reflecting for the most part the
cost of share-based payments as well as the amortisation of reinstated
intangible assets previously written off.
Acquisitions and disposals
Deli XL First for Foodservice
With effect from September 12 2005 Bidvest acquired 100% of Deli XL, the
leading delivered foodservice wholesaler in the Netherlands, from Koninklijke
Ahold N.V., for approximately R1,1 billion. Good progress has been made in
bedding down the acquisition and new management has made good progress in
addressing the strategic challenges in the business. A number of initiatives
designed to extract synergies and improve efficiencies have been implemented
within the European foodservice businesses.
Horeca Trade
In September 2005, 3663 First for Foodservice acquired a controlling stake in
Horeca Trade, a small Dubai-based foodservice distributor. Progress has been
made in strengthening the business whilst growing market share. Potential exists
to expand into the fast-growing Middle East foodservice market.
Dart Line Shipping
In January 2006 Bidvest concluded the sale of its cross-channel ferry business,
Dartline Shipping, including the ferry terminal at Dartford, Kent, for GBP58,9
million (R650,0 million), resulting in a significant premium to carrying value.
The sale is consistent with the Group"s philosophy of exiting businesses which
fail to meet acceptable rates of return.
Lithotech France
Lithotech France continued to underperform and generate losses, despite
concerted management efforts to place the business on a sound financial footing.
Accordingly the Group sold the business to a consortium including management
with effect from January 1 2006, incurring a loss of R202,9 million.
Changes to the board of directors
The Group announced on June 28 2006 its new directorate incorporating the
philosophy of maintaining the Bidvest culture of decentralisation and
participative management styles, whilst ensuring succession planning and
strengthening the non-executive component along with the Dinatla BEE
representation. The Group expresses its gratitude and appreciation to those
retiring directors for their contribution.
Appreciation
The Directors and Management of Bidvest acknowledge the contribution of all 93
218 staff who have delivered these pleasing results.
Divisional review
Bidfreight
Bidfreight produced a good set of results with strong momentum being maintained
throughout the year. Capital expenditure incurred was R227,0 million, providing
a solid base for continued growth and efficiency improvements.
Terminals results were pleasing. Effective cost control and high tank occupancy
levels assisted the good results from Island View Storage. SACD Freight
benefited from increased volumes from its new warehouse facilities in Durban.
Bulk Connections delivered an improved performance notwithstanding disruptions
during the site upgrading. Export volumes at Bidfreight Port Operations, Rennies
Distribution Services and South African Bulk Terminals were constrained by the
strong rand and increased domestic demand.
Safcor Panalpina produced good growth in billings, revenues and profits. While
airfreight volumes were up, increased competition placed pressure on margins.
Phase 1 of the new facility at Johannesburg International Airport is fully
commissioned, with phase 2 presently under construction.
Marine put in a strong performance off the back of increased liner volumes.
Despite pleasing volumes, margin pressure is evident as freight rates become
more competitive.
Manica"s results continue to improve, which is encouraging given the difficult
political and economic environment.
Bidfreight benefits from the growth in the South African economy and continues
to expand its operational capacity to meet this demand.
Bidserv
The recently enlarged Bidserv produced a good set of results, despite
challenging trading and volatile labour environments. Good volume growth offset
margin pressure with most businesses well positioned going forward.
Cleaning"s results were satisfactory benefiting from the achievements of the TMS
group. Prestige"s results were reasonable making up for some contract losses.
Laundries performed consistently well achieving improved returns.
Steiner Hygiene delivered strong growth off a high base benefiting from contract
wins across all target markets. Execuflora realised expectations.
BidRisk Solutions, comprising the guarding and electronics security businesses,
had a difficult year characterised by tough trading conditions and impacted by
the protracted industry-wide security strike. Corrective measures were taken to
rightsize the Joint Operation Centre. IPS and Provicom continue to deliver
strong results. New management of the BidRisk cluster is confident of improved
results.
Industrial Products performed in line with expectations, in particular G. Fox
delivering marked improvements.
In the Greens Division, Top Turf had a disappointing year but full order books
are encouraging.
Bid Travel (formerly Renfin"s Travel businesses) and Rennies Bank have been
relocated to Bidserv. Significant management changes were effected in both
businesses.
Bid Travel"s performance was much improved. The fee-based model has improved
profitability and margins even though average ticket sales and volumes remained
flat. Rennies Bank delivered a steady performance with retail performing well
despite the stable currency environment. Treasury results were lower as margins
suffered under increasing competitive pressures.
Office Automation, previously part of Bid Office had an excellent year with
trading profit up 24,3%. Konika Minolta in particular, leveraged successfully
off the digital transformation evident in corporate South Africa.
BidAir"s results were flat but in line with expectation. BidAir continues to
explore growth opportunities which, if realised, will deliver on the division"s
potential.
Mymarket.com broke even with revenue up 36,3%. Prospects remain encouraging,
particularly with third parties.
Bidserv"s prospects are encouraging with marked improvements expected from
Magnum, Top Turf and Bidair businesses. Management action should ensure improved
margins and overall asset management.
Bidvest Europe
Bidvest Europe comprises 3663 First for Foodservice in the United Kingdom, Deli
XL in the Netherlands and Belgium and Horeca Trade in the United Arab Emirates.
3663 delivered a strong trading performance increasing trading income in
sterling by 12,7% despite sluggish conditions and the effects of the terror
bombings in London. Trading margins were maintained despite inflationary
pressures and the increased revenue from the low margin contract distribution
business.
Multi Temperature maintained sales but increased profitability from excellent
margin management and cost control. The Frozen/Fresh/Chill concept is being
adopted with increasing success by customers which contributed to the good
operational performance. Barton Meat results were below expectation but an
improvement on the prior year. Contract Distribution showed good growth with the
full inclusion of new contracts. Ongoing depot upgrades continued with five new
depots brought on stream. The Ministry of Defence contract performed within
expectations albeit at lower levels than previously. This contract will
terminate in September 2006 following an unsuccessful re-tender but management
are adopting various measures to counter the impact. Plans are well advanced for
the commencement of a major non-food contract in January 2007.
Following the acquisition of Deli XL in September 2005, the business was split
into autonomous Netherlands and Belgium operations. Deli XL Netherlands
delivered results in line with expectations with new and motivated management in
place. Growth has been achieved in the hospitality market but the institutional
market is under pressure. Strategic and operational initiatives are under way
involving range rationalisation and logistics improvements to create capacity
and improve profitability. Deli XL Belgium"s trading results were as expected.
Under new management, a number of operational efficiency initiatives are under
way while ensuring staff morale and motivation are improved.
Horeca Trade, albeit small, has good market potential. Initial focus has been on
wholesale growth of non-commodity products whilst stabilising operational
systems.
Bidvest Europe expects the loss of the Ministry of Defence contract to be
largely offset by anticipated procurement opportunities across the European
platform and improved trading margin management from Deli XL. Further expansion
opportunities continue to be sought across Europe.
Bidvest Australasia
Bidvest Australia excelled growing revenue in local currency by 10% of which 8%
was organic. Trading profit increased 27,6% to A$33,5 million improving its
trading margin to 3,0% (2005: 2,6%). Major focus was on the independent
foodservice market which benefited margins despite cost pressures. The overall
foodservice business continues to perform well while Sydney and Melbourne,
although still challenging, are improving. The major facilities upgrades
nationally are substantially complete.
The QSR Division performed optimally delivering a good trading performance.
Ample scope exits for continued growth in Australia through service extension
and geographic expansion as the market-leading foodservice distributor.
Crean First for Foodservice New Zealand grew revenue by 25,8% whilst increasing
trading income by a more modest 13,7% to N$11,7 million amid increasingly
challenging economic conditions. Broadline performed satisfactorily despite cost
pressures of fuel, wages and infrastructure. The Fresh business has meaningfully
increased its contribution and acquisitions are being sought to expand national
coverage. Despite the slowing economic environment, adequate opportunities exist
to enable sustainable growth.
Bidfood
Caterplus and Combined Foods have been grouped as one reporting unit. Revenue
increased by 12,7%, however trading profit declined 5,2% due to margin pressures
and capacity and overhead cost increases, mainly in distribution.
Catering Supplies although impacted by ongoing low food inflation and increasing
competition, achieved good top-line growth. Management is focused on pursuing
new business whilst investing in sales management capital.
Frozen Foods performed well with trading income up 9,0% from new business in the
independent market. Good market share gains offset cost increases.
With effect from July 1 2006, Catering Supplies and Frozen Foods have merged
into a focused foodservice business under a single management team.
Speciality delivered an excellent performance buoyed by the continued focus on
branded niche products and growth of in-home entertainment.
Vulcan"s Catering Equipment traded well, yet results were negatively impacted by
high manufacturing costs. Structural changes in manufacturing and good market
conditions will yield improvements.
Hotel Amenities produced good trading results with contract wins and capacity
expansions. Lufil continues to grow its own manufactured products, the benefits
of which will offset the loss of a distribution contract.
Crown Foods, impacted by the loss of business to cheap imports, the effects of
the Newcastle poultry disease and the disruption caused by the move to new
premises in December 2005, produced flat trading results.
Bidbake operated in a static market with excessive local and international
competition in yeast products, negatively impacting trading margins. Cost
control and trading efficiency improvements are being implemented to regain
market share.
Bidfood management is focusing on sales growth to regain lost market share while
extracting synergies among the operations to offer an expanded product range to
existing customers. Overhead cost management is receiving attention across all
business units.
Bid Industrial and Commercial Products
Bid Industrial and Commercial Products comprises the Voltex Group, the
Stationery and Furniture businesses of Bid office, Afcom GE Hudson and Buffalo
Executape. The transition to the new division has been bedded down smoothly.
Revenue increased 19,1%, while trading income increased by 26,1%.
Electrical Wholesaling Division delivered an outstanding trading result growing
by 67,4%. The construction sector remains buoyant and the thrust into the
project and tender markets continues. Proactive procument of both copper wire
and other imported products yielded good results. The acquisition of Versalec
effective March 1 2006 contributed positively. Energy-saving initiatives
continue to evolve and infrastructure and mining electrification will provide a
solid platform for growth.
Stationery and Furniture revenue increased by 11,4% and trading profit by 19,1%.
Gross margins were maintained despite pricing pressure on consumables and paper.
Waltons produced good trading results despite the southern Gauteng region which
continues to be problematic. Benefits of further rationalisation should become
evident in the year ahead. Capacity constraints at Kolok were addressed with new
facilities nationally now operational. Intense margin pressures from excessive
competition was offset by volume increases of 23,0%.
Furniture"s businesses performed well. Cecil Nurse (rebranded CN Office
Products) launched a new product catalogue. Seating benefited from sourcing
imports and Dauphin secured some large projects.
Afcom GE Hudson continued to focus on balancing its cost of local manufacture
and sourcing cheaper imports in order to maintain returns. Buffalo Executape
delivered flat trading profit due to increased pressure on trading margins,
however revenue improved on the expansion of DIY tape product range.
Bid Industrial and Commercial Products will focus on extracting synergies within
the new division and is well placed to deliver further growth benefiting from
strategic initiatives across all businesses.
Bidpaper Plus
Revenue grew by 31,0% and trading profit increased by 14,2% with mixed results
across the division. Lithotech performed ahead of expectations, successfully
counteracting the ongoing decline in the traditional business forms market with
growth in the laser and mail product segments. Successful completion of a major
election contract contributed to the results. Electronic solutions continue to
make good progress. The Silveray/Statmark integration has progressed and the
restructured business is expected to improve results.
Lithotech continues to invest in growth areas to meet ongoing demand and the
launch of the "New Croxley" brand will assist Silveray.
Bid Auto
McCarthy produced excellent results with revenue increasing by 18,8% and trading
profit by 30,9% achieved through organic growth. Industry margins remain low
despite the best new-vehicle market ever in the history of the motor industry.
McCarthy increased new vehicle sales by 19,6% to a record of 49 679 units whilst
used units grew a more modest 11,8% to 34 714. The investment in the retail
dealer network has expanded significantly with numerous facility upgrades and
working capital to meet increased demand. Budget Rent a Car achieved better
fleet utilisation and volume growth, increasing market share. Yamaha
Distributors performed satisfactorily initiating strategies to counter the
extremely competitive environment and growth in parallel imports. Financial
Services benefited from increased sales volumes as well as continued focus on
innovative value-added products which resulted in greater market penetration.
Favourable market conditions are expected to continue albeit at lower growth
levels. However, cognisance needs to be taken of the rising interest rate
environment and impacts of price increases on the market. The launch of
McCarthy"s comprehensive range of Chinese vehicles is due in early 2007 and will
assist in achieving growth.
Corporate Services
Namsov Fishing Enterprise, in which the Group has an effective 31,0% interest,
produced excellent results, with trading profit increasing to R75,9 million
buoyed by higher selling prices in the latter part of 2005, despite poorer catch
rates. The dominance of small fish catches may impact the 2007 quotas.
Bidvest acquired 65,0% of Namibian Sea Products during the latter part of the
year and has made an offer to minority shareholders. Further announcements on
the rationale and strategy for the acquisition will be made shortly.
Ontime Automotive achieved a much improved performance across most of the
businesses particularly the Specialist operations although trading results were
impacted by the losses made in the Volume Distribution business in France, which
was closed during January 2006.
Bidvest, together with a consortium comprising Airports Company South Africa and
GVK Industries, won the bid in February 2006 for the operation, management and
upgrade of the Mumbai International Airport in India. Operational control of the
airport was handed to the consortium in May 2006. The investment represents a
strategic foothold into one of the fastest-growing economies in the world and
provides a platform from which to assess further opportunities in the region.
Prospects
Our worldwide trading environments are expected to remain favourable despite the
changing interest rate conditions. Substantial ongoing capacity expansion has
positioned the Group to cater for growth across all its businesses. Management
focus is to improve asset management, contain costs whilst seizing both organic
and acquisitive opportunities when they arise.
The new reporting and management structures have bedded down well. The new
appointments will bring greater energy and focus to the many opportunities
available and management is focused on extracting the many synergies which exist
in the Group.
The Group continues to seek out opportunities where it can acquire a significant
minority interest and management control. This policy will enable the Group to
take advantage of larger-scale acquisition opportunities and utilise its skills
in extracting value.
The Group is optimistic of continuing to achieve above-average returns and
maintaining its commendable growth record.
MC Ramaphosa B Joffe
Chairman Chief executive
Johannesburg
September 1 2006
Distribution out of share premium
Shareholders" attention is drawn to the further announcement by Bidvest
regarding the distribution.
Notice is hereby given that a final cash distribution out of share premium of
207,0 (2005: 172,2) cents per share, in lieu of a dividend, has been awarded to
members recorded in the register of the Company at the close of business on
Friday, September 29 2006.
Shareholders are advised that the last day to trade "cum" the distribution will
be Thursday, September 21 2006. The shares will trade "ex" the distribution as
from Friday, September 22 2006 and the record date will be Friday, September 29
2006. Share certificates may not be rematerialised or dematerialised during the
period Friday, September 22 2006 to Friday, September 29 2006, both days
inclusive. Payment will be made on Monday, October 2 2006.
In terms of the requirements of the Companies Act, the directors confirm that
after the payment of the distribution, the Company will be able to pay its debts
as they become due in the ordinary course of business and its consolidated
assets, fairly valued, will exceed its consolidated liabilities.
For and on behalf of the Board
MA David
Company secretary
Johannesburg
September 1 2006
Transition to IFRS
The financial statements for the year ended June 30 2006 are the Group"s first
consolidated financial statements prepared in accordance with IFRS. The only
adjustments to the cash flow statement relate to reclassifications between
categories.
The Group"s transition date to IFRS is July 1 2004 and the Group has taken
advantage of the following optional exemptions from full retrospective
application at this date:
- Not to restate business combinations which took place prior to transition
date, other than to the extent that there were identifiable intangible assets at
the time of acquisition that were previously written off to retained earnings.
- To include goodwill on the basis of deemed cost, being cost less accumulated
amortisation, with negative goodwill being recognised in retained earnings.
These adjustments were made in the Group"s financial statements for the year
ended June 30 2005.
- The transfer to retained earnings of the accumulated foreign currency
translation reserves at transition date.
- To only account for the cost of options to acquire shares in the Company,
granted subsequent to November 7 2002 which had not vested by January 1 2005.
The transition to IFRS has resulted in the following principal changes to the
Group"s accounting policies:
- Property, Plant and Equipment: Where components of property, plant and
equipment have significantly different useful lives, they are accounted for as
separate assets. The useful lives and residual values of all assets are assessed
annually. In addition the Group now provides for the estimated cost of
dismantling and removing items and restoring the site on which they are located,
as part of the cost of the asset. Changes in the measurement of these
liabilities arising as a result of the unwinding of the discounts are recognised
in the income statement as a finance charge.
- Intangible Assets: Acquired computer software, previously reflected in
property, plant and equipment as office furniture and equipment, has now been
reclassified as an intangible asset. The useful life of computer software, both
acquired and self-developed, is assessed annually. Patents, trademarks and
tradenames acquired as a result of business combinations prior to June 30 2000
and written off against retained earnings, have been reinstated with effect from
the date of the business combination. These patents trademarks and tradenames
have been amortised in accordance with the Group"s existing accounting policies.
- Share-based Payments: Options to acquire shares in the Company granted to
shareholders and staff, have been expensed against income over the vesting
period at fair value, with a corresponding increase in equity. The fair value
of the options is measured using the binomial method taking into account the
terms and conditions upon which the options were granted.
- Leases: Certain leases, which were previously considered to be operating
leases, have been reclassified as finance leases.
- Revenue Recognition: Fees charged for the origination of loans, previously
recognised immediately in income, are now deferred over the anticipated period
in which services will be provided.
After the consideration of previous accounting standards (South African
Generally Accepted Accounting Practice "SA GAAP") and IFRS, it was noted that
revisions were required with regard to the interpretation of certain standards
as previously reported. The following reclassifications were made resulting in
a restatement of comparatives previously reported at interim:
- Circulating stock: In prior years circulating stock which was included in
inventory, has been reclassified as property, plant and equipment, resulting in
a R35,3 million transfer from inventories to property, plant and equipment at
June 30 2005 ( July 1 2004: R29,1 million).
- Staff-related provisions: Originally included in provisions, staff-related
provisions amounting to
R463,2 million at July 1 2004 and R550,1 million at June 30 2005 have been
reclassified to trade and other payables.
- Operating lease liabilities: An operating lease liability arises as a result
of operating leases being recognised on a straight-line basis in the income
statement. In the prior year, this operating lease liability was included in
other provisions. The short-term portion of this liability which at June 30
2005 amounted to R26,6 million (July 1 2004: R23,2 million) is now included in
trade and other payables and the long-term portion of R123,0 million at June 30
2005 (July 1 2004: R107,3 million) is separately disclosed as a non-current
liability in the balance sheet.
- Vehicle rental fleet: Consistent with improved disclosure, the vehicle rental
fleet previously included in inventory has been disclosed seperately.
The impact of the adoption of IFRS on the equity and the profit attributable to
shareholders is detailed in the tables below:
Reconciliation of equity
as at
June 30 July 1
R000"s 2005 2004
As reported under IFRS 7 642 424 6 520 201
Transition to IFRS
Property, plant and equipment 23 824 9 060
Intangible assets (123 816) (156 645)
Share-based payments - -
Finance leases 10 530 9 947
Negative goodwill - (21 268)
Revenue recognition 11 439 7 124
As previously reported 7 564 401 6 368 419
Reconciliation of earnings
Year ended June 30
Year ended
June 30
R000"s 2005
Profit for the year attributable
to shareholders of the Company
as reported under IFRS 1 961 231
Transition to IFRS
Property, plant and equipment 17 678
Intangible assets 32 829
Share-based payments 37 580
Finance leases 560
Revenue recognition 4 315
As previously reported 2 054 193
Adjustment to profit attributable
to shareholders of the Company for
the calculation of headline earnings
as previously reported 24 167
Headline earnings in accordance
with previous accounting policies 2 078 360
The Bidvest Group Limited
Incorporated in the Republic of South Africa ("Bidvest" or "the Group" or "the
Company")
Directors
Executive: B Joffe (Chief Executive), FJ Barnes*, BL Berson**,
MC Berzack, AW Dawe, MBN Dube, LI Jacobs, CH Kretzmann, P Nyman (alternate DE
Cleasby), SG Pretorius, LP Ralphs, AC Salomon.
Non-executive: MC Ramaphosa (Chairman), DDB Band, LG Boyle*,
AA Da Costa (alternate LJ Mokoena), S Koseff, RM Kunene, G Marcus,
D Masson, BE Moffat (alternate T Slabbert), JL Pamensky, NG Payne, Adv P Tlakula
*British **Australian
Company Secretary
MA David
Transfer Secretaries
Link Market Services (Pty) Limited, 11 Diagonal Street, Johannesburg, 2001,
South Africa
PO Box 4844, Johannesburg, 2000, South Africa
Registered Office
Bidvest House, 18 Crescent Drive, Melrose Arch, Melrose,
Johannesburg, 2196, South Africa
PO Box 87274, Houghton, Johannesburg, 2041, South Africa
Registration Number
1946/021180/06
Share Code
BVT
ISIN
ZAE000050449
Further information regarding our financial results can be found on the Bidvest
website
www.bidvest.com
Date: 04/09/2006 07:01:31 AM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department