Wrap Text
Audited results for the year ended June 30 2012
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: ZAE000117321
The Bidvest Group Limited Audited results for the year ended June 30 2012
+12,7%
Revenue to R133,5 billion
+14,5%
Trading profit to R7,0 billion
+16,8%
Normalised HEPS to 1 352,3 cents
+27,4%
HEPS to 1 474,2 cents
+29,6%
Ordinary dividends per share to 622,0cents
Commentary
The Group achieved pleasing trading results for the year ended June 30 2012, supplemented by the profit of R399,1 million realised
on the partial disposal of the Group's beneficial holding in Mumbai International Airport Private Limited (MIAL). Trading held up
reasonably well despite the economic environments being tough, a tribute to the resilience and focus of Bidvest's management.
Headline earnings per share (HEPS) increased by 27,4% to 1 474,2 cents per share while basic earnings per share (EPS) increased
by 28,9% to 1 431,7 cents per share. Normalised HEPS (i.e. excluding the MIAL profit and associated STC) increased by 16,8% to
1 352,3 cents per share. EPS for the year were negatively impacted mainly by an impairment of the Group's investment in Comair
Limited of R96,7 million and the impairment of Property, Plant and Equipment and Intangibles of R26,5 million.
The average Rand exchange rate weakened against the major currencies in which the Group operates, in particular against the
Australian Dollar, the Euro and Sterling. Full information of the currency effects on the translation of foreign operations
is shown in the supplementary information provided.
Trading conditions in southern Africa have generally improved but certain segments of the market such as construction and consumer
spending in the discretionary end of the market remains weak. Asia Pacific continues to deliver solid results. Bidvest Foodservice
Europe's results are up 8,3% in Rand terms, however certain operations reported declines in trading profit in local currencies.
Financial overview
Revenue grew 12,7% to R133,5 billion (2011: R118,5 billion). The major growth occurred in Bidvest Europe (R6,4 billion) and Bidvest
Asia Pacific (R3,9 billion) which reflects market share gains as well as assistance from Rand weakness on translation.
Gross margin was largely maintained. Operating expenses were well controlled across the Group, the increase of 10,8%, was distorted
by the currency effects on translation. Trading margin improved to 5,3% (2011: 5,2%), despite a relative increase in contribution
from lower margin activities such as forwarding and clearing and automotive retailing.
The Group achieved improved trading profit, growing by 14,5% to R7,0 billion (2011: R6,1 billion). Share based payment costs
increased from R62,7 million in 2011 to R121,5 million in 2012 due to the issue of share options to staff. Incentivisation remains
one of the cornerstones of the Bidvest decentralised operating model.
The improvement in trading profit has been offset to a degree by an increase in net finance charges of R140,7 million, a 21,8%
increase over 2011. The increase in the main can be ascribed to the R1,6 billion spent on the share buyback from Dinatla in
May 2011, the full effects of which were borne in 2012.
The Group's financial position remains robust and the Group is well-capitalised. The increase in Rand values of the foreign
operations arose from the decline in the closing exchange rate against 2011. Net debt has decreased to R3,6 billion
(2011: R5,0 billion). Interest cover remained unchanged at 9.1 times. The Group retains adequate borrowing capacity.
Bidvest's attitude to gearing remains conservative and appropriate in the current economic climate. In December 2011, Fitch Ratings
upgraded the Group's national long-term rating to 'AA-(zaf)' from 'A+(zaf)' and national short-term rating to 'F1+(zaf)' from
'F1(zaf)'. Moody's continue to rate the Group at A1.za with a stable outlook.
Cash generated by operations before working capital changes increased 12,7% to R8,7 billion (2011: R7,8 billion). The Group made further
gains in reducing working capital to June 2012 assisted by the significant cash collections in the latter part of the year, despite
most operations registering growth. Credit extension remains a critical focus area of management across the Group.
A number of investments have been made in the year, the more material of which includes the acquisition of 26,4% of Mvelaserve Limited
for R424,2 million. The continued internationalisation of the foodservices business was demonstrated with the acquisition of Deli
Meals in Chile, Bidvest's first entry into South America.
Consolidated income statement
for the year ended June 30 Percentage
R000s 2012 2011 change
Revenue 133 533 633 118 482 736 12,7
Cost of revenue (106 241 730) (93 930 778)
Gross income 27 291 903 24 551 958 11,2
Other income 646 058 451 623
Operating expenses (20 923 733) (18 879 268)
Sales and distribution costs (13 993 709) (12 541 784)
Administration expenses (4 365 840) (4 201 258)
Other costs (2 564 184) (2 136 226)
Trading profit 7 014 228 6 124 313 14,5
Share-based payment expense (121 524) (62 652)
Profit on partial sale of investment in Mumbai
International Airport Private Limited 399 100 -
Acquisition costs (17 762) (24 297)
Net capital items (133 743) (189 453)
Operating profit 7 140 299 5 847 911 22,1
Net finance charges (784 666) (644 010)
Finance income 46 256 69 905
Finance charges (830 922) (713 915)
Share of profit of associates 77 298 98 417
Dividends received 43 733 32 948
Share of current year earnings 33 565 65 469
Profit before taxation 6 432 931 5 302 318 21,3
Taxation (1 695 458) (1 528 169)
Current and deferred taxation (1 595 702) (1 395 682)
Secondary taxation on companies (99 756) (132 487)
Profit for the year 4 737 473 3 774 149 25,5
Attributable to:
Shareholders of the Company 4 442 902 3 538 748 25,6
Minority shareholders 294 571 235 401
4 737 473 3 774 149 25,5
Shares in issue ('000)
Total 311 952 309 021
Weighted 310 324 318 665
Diluted weighted 311 037 319 612
Basic earnings per share (cents) 1 431,7 1 110,5 28,9
Diluted basic earnings per share (cents) 1 428,4 1 107,2 29,0
Headline earnings per share (cents) 1 474,2 1 157,4 27,4
Diluted headline earnings per share (cents) 1 470,8 1 153,9 27,5
Normalised headline earnings per share (cents) 1 352,3 1 157,4 16,8
Dividends per share (cents) 622,0 480,0 29,6
Interim 280,0 225,0 24,4
Final 342,0 255,0 34,1
Special dividends per share (cents) 80,0 - -
HEADLINE EARNINGS
The following adjustments to profit attributable to shareholders were taken
into account in the calculation of headline earnings:
Profit attributable to shareholders of the Company 4 442 902 3 538 748 25,5
Impairment of property, plant and equipment, goodwill 26 470 140 004
and intangible assets
Property, plant and equipment 13 223 27 027
Goodwill 8 141 3 571
Intangible assets 8 263 151 521
Tax relief (1 134) (42 115)
Minority shareholders (2 023) -
Net loss (profit) on disposal of interests in subsidiaries (968) 84
and disposal and closure of businesses
Loss (profit) on disposal and closure (2 614) 84
Tax charge 1 646 -
Loss on disposal, and impairment of investments in associates 97 675 209
Impairment of investments in associate 96 700 -
Net loss on change in shareholding in associates 975 209
Net loss on disposal of property, plant and equipment, 8 793 9 114
and intangible assets
Property, plant and equipment 43 5 642
Intangible assets 9 012 1 399
Tax relief (1 525) (5 760)
Minority shareholders 1 263 7 833
Headline earnings 4 574 872 3 688 159 24,0
Profit on partial sale of investment in Mumbai International (399 100) -
Airport Private Limited
Secondary Tax on Companies on special dividends 20 781 -
Normalised headline earnings 4 196 553 3 688 159 13,7
Segmental analysis
for the year ended June 30 Percentage
R000s 2012 2011 change
REVENUE
Bidvest South Africa 62 707 380 59 012 709 6,3
Automotive 19 130 896 18 608 261 2,8
Electrical 4 286 092 4 100 368 4,5
Financial Services 1 715 660 1 676 700 2,3
Freight 20 868 634 19 253 273 8,4
Industrial 1 473 920 1 486 371 (0,8)
Office 4 183 978 3 684 598 13,6
Paperplus 3 858 146 3 705 374 4,1
Rental and Products 2 057 282 1 703 084 20,8
Services 3 086 476 2 928 372 5,4
Travel and Aviation 2 046 296 1 866 308 9,6
Bidvest Foodservice 70 756 633 59 645 556 18,6
Asia Pacific 23 493 350 19 563 066 20,1
Europe 41 114 785 34 664 912 18,6
Southern Africa 6 148 498 5 417 578 13,5
Bidvest Namibia 2 971 322 2 133 749 39,3
Bidvest Corporate 799 686 691 353 15,7
Properties 282 945 212 270 33,3
Corporate and investments 516 741 479 083 7,9
137 235 021 121 483 367 13,0
Inter Group eliminations (3 701 388) (3 000 631)
133 533 633 118 482 736 12,7
TRADING PROFIT
Bidvest South Africa 3 853 048 3 408 280 13,0
Automotive 502 365 378 096 32,9
Electrical 207 554 181 832 14,1
Financial Services 586 743 518 945 13,1
Freight 952 700 886 248 7,5
Industrial 81 803 118 445 (30,9)
Office 275 149 215 388 27,7
Paperplus 328 140 325 609 0,8
Rental and Products 383 806 320 259 19,8
Services 215 414 193 190 11,5
Travel and Aviation 319 374 270 268 18,2
Bidvest Foodservice 2 222 094 2 031 705 9,4
Asia Pacific 1 000 042 833 125 20,0
Europe 912 729 842 455 8,3
Southern Africa 309 323 356 125 (13,1)
Bidvest Namibia 637 694 540 154 18,1
Bidvest Corporate 301 392 144 174 109,0
Properties 266 495 207 153 28,6
Corporate and Investments 34 897 (62 979)
7 014 228 6 124 313 14,5
Consolidated statement of other comprehensive income
for the year ended June 30
R000s 2012 2011
Profit for the year 4 737 473 3 774 149
Other comprehensive income (expense)
Increase in foreign currency translation reserve 1 144 511 224 774
Increase (decrease) in fair value of available-for-sale financial assets 4 047 (1 732)
Total comprehensive income for the year 5 886 031 3 997 191
Attributable to:
Shareholders of the Company 5 580 830 3 765 319
Minority shareholders 305 201 231 872
5 886 031 3 997 191
Consolidated condensed statement of cash flows
for the year ended June 30
R000s 2012 2011
Cash flows from operating activities 4 577 878 4 466 468
Operating profit 7 140 299 5 847 911
Dividends from associates 43 733 32 948
Acquisition costs 17 762 24 297
Depreciation and amortisation 2 001 864 1 811 698
Other non-cash items (459 259) 40 249
Cash generated by operations before changes in working capital 8 744 399 7 757 103
Changes in working capital 197 584 405 727
Cash generated by operations 8 941 983 8 162 830
Net finance charges paid (668 954) (559 214)
Taxation paid (1 632 383) (1 577 411)
Distributions by - Company (1 920 923) (1 452 491)
- subsidiaries (141 845) (107 246)
Cash effects of investment activities (3 151 751) (3 853 284)
Net additions to vehicle rental fleet (375 303) (282 940)
Net additions to property, plant and equipment (1 812 785) (2 523 231)
Net additions to intangible assets (294 549) (237 389)
Net acquisition of subsidiaries, businesses, associates and investments (669 114) (809 724)
Cash effects of financing activities 165 521 (735 423)
Proceeds from shares issued - company 56 247 -
- subsidiaries 42 415 -
Net issue (purchase) of treasury shares 182 188 (1 426 546)
Share buy back costs - (11 980)
Net borrowings raised (repaid) (115 329) 703 103
Net increase(decrease) in cash and cash equivalents 1 591 648 (122 239)
Net cash and cash equivalents at the beginning of the year 2 809 043 2 905 453
Exchange rate adjustment 214 767 25 829
Net cash and cash equivalents at end of the year 4 615 458 2 809 043
Net cash and cash equivalents comprise:
Cash and cash equivalents 5 871 306 4 437 268
Bank overdrafts included in short-term portion of borrowings (1 255 848) (1 628 225)
4 615 458 2 809 043
Consolidated statement of financial position
as at June 30
R000s 2012 2011
ASSETS
Non-current assets 24 756 540 21 860 236
Property, plant and equipment 12 445 541 11 603 183
Intangible assets 860 957 672 105
Goodwill 7 449 997 6 354 825
Deferred tax asset 413 427 390 792
Defined benefit pension surplus 100 215 111 692
Interest in associates 1 089 858 684 405
Investments 1 889 141 1 749 577
Banking and other advances 507 404 293 657
Current assets 31 138 606 25 969 682
Vehicle rental fleet 1 272 720 1 063 371
Inventories 10 248 120 8 750 609
Short-term portion of banking and other advances 211 215 154 279
Trade and other receivables 13 535 245 11 564 155
Cash and cash equivalents 5 871 306 4 437 268
Total assets 55 895 146 47 829 918
EQUITY AND LIABILITIES
Capital and reserves 22 599 453 18 456 992
Attributable to shareholders of the Company 21 630 154 17 669 264
Minority shareholders 969 299 787 728
Non- current liabilities 5 498 206 5 769 111
Deferred tax liability 553 919 507 505
Life assurance fund 31 640 34 014
Long-term portion of borrowings 4 039 858 4 391 429
Post-retirement obligations 380 669 381 332
Long-term portion of provisions 340 289 272 400
Long term portion of operating lease liabilities 151 831 182 431
Current liabilities 27 797 487 23 603 815
Trade and other payables 20 001 100 16 812 487
Short-term portion of provisions 308 261 237 471
Vendors for acquisition 61 325 539
Taxation 298 240 201 313
Short-term portion of banking liabilities 1 681 679 1 275 897
Short-term portion of borrowings 5 446 882 5 076 108
Total equity and liabilities 55 895 146 47 829 918
Net tangible asset value per share (cents) 4 270 3 444
Net asset value per share (cents) 6 934 5 718
Consolidated statement of changes in equity
for the year ended June 30
R000s 2012 2011
Shareholders' interest
Issued share capital 16 387 16 367
Balance at beginning of the year 16 367 17 507
Shares issued during the year 20 -
Cancellation of treasury shares - (1 140)
Share premium arising on shares issued 137 485 81 258
Balance at beginning of the year 81 258 81 258
Shares issued during the year 56 260 -
Share issue costs (33) -
Foreign currency translation reserve 1 366 049 248 830
Balance at beginning of the year 248 830 20 527
Realisation of reserve on disposal of subsidiaries (16 662) -
Arising during the year 1 133 881 228 303
Statutory reserves - 15 894
Balance at beginning of the year 15 894 15 215
Transfer from (to) retained earnings (15 894) 679
Equity-settled share-based payment reserve 165 237 391 430
Balance at beginning of the year 391 430 328 640
Arising during the year 121 454 62 790
Deferred tax recognised directly in reserve 1 419 -
Utilisation during the year (56 273) -
Transfer to retained earnings (292 793) -
Movement in retained earnings 21 948 681 19 101 358
Balance at beginning of the year 19 101 358 18 619 202
Attributable profit 4 442 902 3 538 748
Change in fair value of available-for-sale financial assets 4 047 (1 732)
Dividends paid (1 920 923) (1 452 491)
Transfer of reserves as a result of changes in shareholding of subsidiaries 12 610 (4 331)
Cancellation of treasury shares and related costs - (1 597 359)
Transfer from (to) other reserves 308 687 (679)
Treasury shares (2 003 685) (2 185 873)
Balance at beginning of the year (2 185 873) (2 345 846)
Purchase of shares by susidiaries - (1 581 285)
Shares disposed of in terms of share incentive scheme 182 188 154 739
Cancellation of treasury shares - 1 586 519
Capital and reserves attributable to shareholders of the Company 21 630 154 17 669 264
Minority shareholders
Balance at beginning of the year 787 728 656 434
Attributable profit 294 571 235 401
Movement in foreign currency translation reserve 10 630 (3 529)
Dividends paid (141 845) (107 246)
Movement in equity-settled share-based payment reserve 69 60
Capital invested 42 415 -
Changes in shareholding (11 659) 2 277
Transfer of reserves as a result of changes in shareholding of subsidiaries (12 610) 4 331
Capital and reserves attributable to minority shareholders of the Company 969 299 787 728
Total equity 22 599 453 18 456 992
Divisional review
Bidvest South Africa
The realigned and refocused businesses achieved positive revenue and earnings growth in challenging market conditions. Revenue
increased from R59.0 billion in 2011 to R62.7 billion in the current year. Trading profits increased by 13,0% to R3,9 billion
with impressive contributions by Bidvest Automotive (32,9%) and Bidvest Office (27,7%). Market-share gains and efficiency
improvements were substantial.
Automotive The vehicle retailer achieved a pleasing result with trading profit 32,9% higher at R502,4 million (2011: R378,1 million)
while revenue rose to R19,1 billion (2011: R18,6 billion). In 2012 dealer swaps were no longer accounted for as revenue. Excluding
these in 2011, revenue would have grown by 10,0%. ROFE reached 52,3%. Margins reflected a 30,0% increase from 2,0% to 2,6%. The
result includes statutory commission income from Bidvest Financial Services and profit share from McCarthy Finance. New vehicle sales
rose in line with market conditions. Used-car sales were sluggish, impacting auction business at Burchmores. Franchise performance
was mixed, with strong sales at VW/Audi, Toyota, Land Rover, Chrysler/Dodge/Jeep and Nissan. After-sales showed some growth. Expense
reduction continued and the cost-base of central services was cut by 30,0%. Retail operations were restructured into six franchise silos.
A strategic franchise review was completed and progress made on the disposal of several under-performing franchises and dealerships. The
business is well positioned for continued growth.
Electrical Electrical achieved a measure of growth despite ongoing recessionary conditions in the construction sector. Revenue rose
to R4,3 billion (2011: R4,1 billion) while trading profit increased 14,1% to R207,6 million (2011: R181,8 million). Gross margins
improved to 19,2% (2011: 18,8%) and expenses were well controlled in a year of transition as operations were rationalised. Regional
performance was mixed, with improvements in several areas.
KwaZulu-Natal was outstanding and Voltex Retail put in a pleasing performance. Sanlic had a poor year and Waco showed improvement.
Voltex Lighting and Cabstrut were reintegrated into the mainstream Voltex operations.
Financial Services Divisional trading profit rose 13,1% to R586,7 million (2011: R518,9 million). The segmental result was restated
to reflect the allocation and payment of commission and profit share to Bidvest Automotive of R169,1 million (2011: R122,7 million).
In a highly competitive environment, innovation drove growth at Bidvest Bank. Profit after tax reached R317,0 million
(2011: R283,5 million), with deposits up 31% to R1,8 billion (2011: R1,4 billion). Loans and advances were impacted as demand for
corporate credit diminished. The credit loss ratio was 0,1% on total assets of R4,1 billion, reflecting a well managed book.
At 39,7% the financial leverage ratio remained low. By year-end, the Bank's customer-base topped 1,5 million. Management continue
to develop new and innovative products, the benefits of which should materialise in the 2013 financial year.
Bidvest Insurance delivered solid results as it diversifies its activities and maximises opportunities within existing
distribution channels. Gross premiums rose 12,8% to R330,9 million (2011: R293,4 million) reflecting higher policy volumes
combined with higher yields. Net underwriting result moved 33,3% higher driving improved profitability. Strategic investments
into head count and marketing spend impacted costs. Investment income was up 5,5% at R106,9 million (2011: R101,4 million).
The launch of newly branded products and the introduction of retail marketing will assist in new initiatives gaining traction in 2013.
Freight Resilient performance underpinned by firm commodity volumes for most of the year saw trading profit rise 7,5% to R952,7
million (2011: R886,3 million). Revenue moved 8,4% higher to R20,9 billion (2011: R19,3 billion).
IVS achieved record profits, though petroleum sector volumes were down. Costs were well controlled. Good maize imports and exports
offset lower volumes of wheat, rice and soya at SA Bulk Terminals. BPO had a tough year, impacted by lower volumes, the partial loss
of a major contract, lower steel exports and a fall in the frequency of liner calls. The stevedoring and ships agency businesses
performed well.
Bidvest Panalpina Logistics (BPL), a merger of Safcor Panalpina and Rennies Distribution Services, bedded in well, achieving
revenue and profit growth above expectation. SACD Freight faced a challenging year where the Cape Town operations felt knock-on
pressure as wine exports stalled, however Durban put in a strong showing. Bulk Connections handled record volumes of 3,3 million
tons and is positioned for further growth following a major infrastructure upgrade. Naval in Mozambique benefited from an excellent
second half, winning new iron ore and magnetite customers while maintaining strong coal volumes. The marine insurance business
had a good year. Manica returned a loss of R6,6 million. The DRC business was sold and new management was appointed at several
operations.
Industrial Results were disappointing with revenue flat at R1,5 billion while trading profit fell 30,9% to R81,8 million (2011: R118,4 million).
Margins contracted to 5,8% (2011: 7,9%) and ROFE fell to 16,3%. Afcom had a difficult year. Restructuring is under way. Berzacks and Bloch &
Levitan faced continuing pressure. Bidvest Materials Handling was impacted by a capex slowdown by customers but orders revived toward year-end.
Buffalo Executape had a difficult year. Vulcan rebounded well following rationalisation, underpinned by government spend, healthcare sector
orders and strong retail and franchising performance. Yamaha was impacted by pressure on consumer spend.
Office The division put in an exceptional performance on the back of strong results at the technology companies, Konica Minolta, Océ and Global
Payment Technologies. Revenue rose 13,6% to R4,2 billion (2011: R3,7 billion), with trading profit 27,7% higher at R275,1 million (2011:
R215,4 million). ROFE rose to 44,2%. Sales organisations at the restructured furniture businesses recorded significant
improvements. Challenges relate to the restructured Furniture Manufacturing, which recorded a loss. Waltons was successfully restructured.
Paperplus Volumes were impacted by private-sector cost cuts, subdued exports and low general print demand. Trading profit was marginally
improved at R328,1 million (2011: R325,6 million) on a 4,1% revenue increase to R3,9 billion (2011: R3,7 billion).
Personalisation and Mail contributed strongly and Email Connection performed exceptionally well. Additional capacity was created for newly a
cquired Sprint Packaging and a certified food safe facility established. Label demand remained low. Performance at Silveray Statmark was
disappointing as the business is reorganised. Kolok had a good year.
Rental and Products Outstanding performances by Steiner and G Fox helped the division grow trading profit by 19,8% to R383,8 million (2011:
R320,3 million) while revenue moved 20,8% higher to R2,1 billion (2011: R1,7 billion). ROFE was excellent at 64,1%. Major contract renewals
and new business gains boosted the Steiner result. Within Industrial Products, G Fox benefited from the Alsafe acquisition while achieving
solid organic growth. Puréau and Silk by Design performed well. Performance at Execuflora and Laundries was disappointing. Hotel Amenities
had a poor year but is receiving significant attention.
Services Performance was mixed in a challenging environment with trading profit up 11,5% to R215,4 million (2011: R193,2 million) on a 5,4%
revenue increase to R3,1 billion (2011: R2,9 billion). ROFE was flat at 52,5%. Growth was driven by strong contributions from the Prestige
cleaning and Magnum security clusters, both growing market share. Costs were also well controlled. Bidtrack put in another good performance.
Rationalisation continued at the TMS industrial cleaning business as the Secunda operations were restructured in order to improve sustainability.
Top Turf completed a restructure following disappointing results on low project volumes.
Travel and Aviation A pleasing overall performance took trading profit 18,2% higher to R319,4 million (2011: R270,3 million) on revenue of
R2,0 billion (2011: R1,9 billion), a 9,6% increase. ROFE rose to 23,0%. Bidtravel results exceeded expectation as the Rennies Travel business
optimised gains flowing from its restructure in the previous year. Bidair Services was impacted by pricing pressures during extremely
competitive tendering. Volumes showed good growth at Bidvest Lounges, where the flagship ORTIA lounges now set the industry standard. Cargo
volumes suffered as air services were curtailed. Budget Car and Van Rental did well, achieving good profit growth and market-share gains.
Bidvest Foodservice
Foodservice revenue grew 18.6% to R70,8 billion (2011: R59,6 billion). Rand weakness accentuated revenue growth in Bidvest Europe and Asia
Pacific. Asia Pacific now comprises the largest contributor to the foodservice cluster. In South Africa, margin pressure increased and
competitor activity was intense.
Asia Pacific A positive finish to the year at Bidvest Australia took revenue up to A$1,9 billion (2011: A$1,8 billion) with trading profit
growth of 4,5% to A$84,3 million. Foodlink, a foodservice supplier in Western Australia was acquired in April. Trading conditions were mixed.
Metropolitan markets and tourist areas faced pressure. Foodservice performed strongly, Hospitality had a difficult year and Fresh remained
under pressure. Logistics was impacted by the loss of a beverage distribution account. Continued growth will be achieved through innovation,
by maximising opportunities flowing from acquisitions and by developing new ways to transact with customers.
Bidvest New Zealand exceeded expectations. Revenue grew by 15,1% to N$615,4 million and trading profit increased to N$ 29,0 million, up 13,1%.
ROFE improved and margins were well managed. Work on two new distribution centres began and the first investment was made outside the wholesale
distribution market with the acquisition of a manufacturing butchery and prepared vegetable processing business. A slowdown in the foodservice
market was evident by year-end.
Angliss Greater China put in a pleasing effort bolstered by a strong first three quarters. Revenue was up 12,8% to HK$2,5 billion (2011:
HK$2,3 billion) and trading profits up 20,8% to HK$102,7 million. Hong Kong achieved target despite falling food commodity prices. Macau
benefited from strong promotional activity and Shanghai from strong end-user focus. Sales fell at Angliss Singapore as trading operations
transitioned to a full foodservice model. Remedial action has been taken to strengthen management and refocus the business direction. Revenue
fell by 3,9% to S$333,6 million and trading profit dropped to S$ 5,3 million, down by 54,7%.
Europe Overall UK results improved. 3663 First for Foodservice grew revenue by 7,7% to £1,1 billion and trading profit 2,3% to £35,1 million,
despite margin pressure. Working capital performance remained strong. The loss of a major contract was offset by new business gains. Free-trade
volumes rose, profit at the catering equipment and fresh businesses exceeded expectations. The Reflex IT system implementation was successfully
delivered on time and within budget. A small Scottish foodservice business was acquired after year-end. Bidvest Logistics returned to
trading profit on the back of better-than-expected sales volumes. Contracts were extended or expanded with major customers, the majority of
which are secure for the foreseeable future. Revenue rose at Seafood Holdings in its first full year contribution, but trading profit was below
expectation. Average customer spend declined and collapsing salmon prices were negative for margins.
In Europe, Deli XL Netherlands was impacted by lower sales, margin compression and profit levels well below budget. Revenue was down 2,8% to
722,7 million (2011: 743,9 million) and trading profits declined 46,9% to 9,7 million. Institutional turnover was down and hospitality faced
pressure. Fresh sales rose, catering proved resilient and national account business grew. Deli XL Belgium achieved revenue growth of 14,8% to
316,5 million, but trading profit was impacted by restructuring costs and tighter margins. The institutional channel faced significant pressure.
Bidvest Czech Republic and Slovakia faced challenging conditions, but achieved year-on-year revenue growth of 1,5% to CZK8,0 billion. Margins
were maintained and costs were well controlled. A poor summer affected Czech ice-cream sales. A meat factory is planned in Czech Republic and
will boost venison volumes. Nowaco Baltics, our recently acquired Lithuanian business with subsidiaries in Latvia and Estonia, settled in well
despite recording a small loss. Farutex Poland grew revenues with investment focussed on enlarging four depots. Cost efficiencies on higher
sales volumes will be evident in 2013. Both operations in Dubai and Saudi Arabia performed well, growing sales, the customer-base and product
mix.
Southern Africa Results were below expectation. Margin pressure increased and competitor activity was intense. Revenue rose to R6,1 billion
(2011: R5,4 billion). Trading profit fell year on year to R309,3 million (2011: R356,1 million). All businesses were impacted by cost pressures
above inflation. Investment in information technology systems; food safety; new premises and technical skills laid the foundation for sustained
growth, but added to the fixed cost base.
Foodservice division delivered good growth in the national account channel, but margins declined in the industrial catering segment and street
trade sales fell. Restaurant closures highlighted growing credit risk. Bidfood Ingredients grew revenue but the trading performance was
impacted by cost increases and margin pressure. Restructuring and retraining is under way at Crown Food Group, with focus on market segments
offering strong growth potential and procurement efficiencies. A centre for innovation, design and technology was opened, focussed on improving
the sales and technical capability of the division. Patley's recorded a poor trading performance, created by a breakdown in management control.
Significant effort has been made to refocus the business and new senior management were appointed.
Bidvest Namibia
Strong performance drove revenue 39,3% higher to R3,0 billion (2011: R2,1 billion) while trading profit rose 18,1% to R637,7 million (2011:
R540,2 million). Overall results were bolstered by another strong result by the fishing businesses underpinned by good horse mackerel volumes
and firm prices. Margins were impacted following the acquisition of the FMCG distributor Taeuber & Corssen SWA Limited (T&C). The business
has bedded in well, improving the strategic balance within the Namibian operations and contributed to improved commercial division performance.
Turn-around strategies and improved management skills in the Industrial and Commercial Products and Services divisions are yielding positive
results. Corporate hygiene services via Bidvest Namibia Steiner were launched.
Bidvest Corporate
The disposal of half of the economic interest in MIAL for a profit of R399,1 million was concluded in October 2011. Bidvest Properties
completed Waltons new KZN regional office and distribution centre in Durban and with joint-venture partners purchased the Hatfield property
occupied by Automotive's new McCarthy GM franchise. Further corrective action was taken at Ontime Automotive following losses at the specialist
vehicle delivery and rescue and recovery businesses.
Prospects
In the current economic environments in which we operate our global business, volatility and low growth are the norm. Our philosophy and
culture encourages management to perform despite these circumstances as we are not intimidated by our environments. Significant effort is
being directed to ensure that throughout all facets of the Group, we remain true to our tried and tested decentralised and entrepreneurial
business model and our "autonomy with responsibility and accountability" culture. Bidvest remains a demand driven business where our
customers drive our focus, suppliers our efficiencies, employees our existence and our collective behaviour the results.
In Southern Africa, trading conditions are not expected to show marked improvement in 2013. Despite these constraints, our teams will continue
to pursue growth opportunities. In 2012, the focus was on restructuring and pursuing organic growth but going forward, a mix of organic and
acquisitive growth is expected to drive further gains.
In Europe, despite the environmental noise of low growth and market volatility, our management teams remain cautiously optimistic of achieving
market share gains and product and geographic expansion. In Asia, growth rates have also begun to dip and lower commodity demand from China
has dented sentiment. Management are confident of further growth, both as a result of developing innovative wholesale trading solutions for
their markets as well as product range extension combined with regional expansion of the footprint.
Significant management effort is being directed at those operations where performance is below our own expectations. In the current
competitive markets, the Group remains focussed on ensuring we deliver above customer requirements with the most value added solutions.
Accordingly management focus remains on cost control, working capital management and generating superior returns on funds employed. Our
financial position remains sound and the Group has ample capacity to fund sustainable growth opportunities. Notwithstanding the tough
economic circumstances worldwide, we continue to see organic growth opportunities as well as acquisitive expansion of our footprint and
service offering, across many of our businesses.
Directorate
The following directors resigned during the year: Mr Myron Cyril Berzack (resigned September 7 2011), Mr Nkateko Peter Mageza (resigned
November 21 2011) and Mrs Lilian Garner Boyle (resigned February 17 2012).
Bidvest acknowledges and would like to thank these directors for their contributions.
As announced on April 20 2012 the following independent non-executive directors were appointed to the board: Messrs Paul Cambo Baloyi,
Eric Kevin Diack, Alexander Komape Maditsi and Ms Lorato Phalatse.
Bidvest welcomes them to the Bidvest family.
MC Ramaphosa B Joffe DE Cleasby
Chairman Chief Executive Finance Director
August 27 2012
Dividend declaration
The directors have declared a final gross cash dividend of 342,0 cents (290,7 cents net of dividend withholding tax, where applicable) (2011:
255,0 cents) per ordinary share for the 12 months ended June 30 2012 to those members registered on the record date, being Friday, September 21 2012.
The dividend has been declared from income reserves and no Secondary Tax on Companies credits have been used. A dividend withholding tax of
15% will be applicable to all shareholders who are not exempt.
Share code BVT
ISIN ZAE000117321
Company registration number 1946/021180/06
Company tax reference number 9550162714
Gross cash dividends per share 342,0 cents
Net dividend amount per share 290,7 cents
Issued shares as at declaration date 327 734 929
Declaration date Monday, August 27 2012
Last day to trade cum dividend Friday, September 14 2012
First day to trade ex dividend Monday, September 17 2012
Record date Friday, September 21 2012
Payment date Tuesday, September 25 2012
Share certificates may not be dematerialised or rematerialised between Monday, September 17 2012 and Friday, September 21 2012, both dates
inclusive.
For and on behalf of the board
CA Brighten
Company secretary
Johannesburg
August 27 2012
Basis of presentation of financial statements
These condensed financial statements have been prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS), the interpretations adopted by the International Accounting Standards
Board, South African interpretations of Generally Accepted Accounting Practice and include disclosure as required by IAS 34: Interim Financial
Reporting and the Companies Act of South Africa.
The financial statements have been prepared using accounting policies that comply with IFRS and which are consistent with those applied in the
preparation of the financial statements for the year ended June 30 2011.
During the year certain operations in Bidvest South Africa were reclassified between segments. The comparative year's segmental information
has been restated to reflect these changes.
Exchange rates
The following exchange rates were used in the conversion of foreign interests and foreign transactions during the years:
June 30 June 30
2012 2011
R'000
Contracted for 914 709 756 368
Not contracted for 575 254 388 383
Average rate 1 489 963 1 144 751
Audit report
The auditors, Deloitte & Touche, have issued their opinion on the Group's financial statements for the year ended June 30 2012. The audit was
conducted in accordance with International Standards on Auditing. They have issued an unmodified audit opinion. These summarised provisional
financial statements have been derived from the Group's financial statements and are consistent in all material respects with the Group's
financial statements. A copy of their audit report is available for inspection at the Company's registered office.
Any reference to future prospects included in this announcement has not been reviewed or reported on by the Company's auditors.
Preparer of financial statements
These condensed consolidated financial statements have been prepared under the supervision of NEJ Goodwin CA(SA).
Exchange rates
The following exchange rates were used in the conversion of foreign interests and foreign transactions during the years:
June 30 June 30
2012 2011
Rand/Sterling
Closing rate 12.94 10.97
Average rate 12.34 11.18
Rand/Euro
Closing rate 10.46 9.84
Average rate 10.41 9.56
Rand/Australian dollar
Closing rate 8.42 7.25
Average rate 8.03 6.94
Supplementary information regarding the currency effects of the translation of foreign operations on the group
The average Rand exchange rate weakened against the major currencies in which the Group's foreign operations trade namely Sterling
(11,18 in 2011 to 12,34 in 2012), the Euro (9,56 in 2011 to 10,41 in 2012) and the Australian Dollar (6,94 in 2011 to 8,03 in 2012).
The illustrative financial information has been prepared on the basis of applying the 2011 average Rand exchange rates to the 2012
foreign subsidiary income statements and recalculating the reported income of the Group for the year.
Year ended June 30 2012
Actual Actual Illustrative 2012 at
Rm 2012 2011 2011 exchange rates
Revenue 133 533,6 +12,7% 118 482,7 126 758,9 +7,0%
Trading profit 7 014,2 +14,5% 6 124,3 6 806,0 +11,1%
Headline earnings 4 574,9 +24,0% 3 688,2 4 431,4 +20,2%
HEPS (cps) 1 474,2 +27,4% 1 157,4 1 428,0 +23,4%
Normalised HEPS (cps) 1 352,3 +16,8% 1 157,4 1 306,1 +12,8%
The financial information has been compiled for illustrative purposes and is the responsibility of the Bidvest board. Due to the nature of
this information, it may not fairly present the Groups financial position, changes in equity and results of operations or cash flows. A limited
assurance report prepared by the Company's auditors is available for inspection at the Company's registered office.
Analyst presentation
The presentation to investors will be available on the Bidvest website from 10:00 on Monday, August 27 2012.
Further information regarding our financial results can be found on the Bidvest website: www.bidvest.com
Directors
Chairman: MC Ramaphosa
Independent non-executive: PC Baloyi, DDB Band, EK Diack, MBN Dube, S Koseff, AK Maditsi, D Masson, JL Pamensky, NG Payne, L Phalatse,
Adv FDP Tlakula
Non-executive: FJ Barnes*, AA Da Costa (alternate LJ Mokoena), RM Kunene, T Slabbert
Executive: B Joffe (Chief executive), BL Berson**, DE Cleasby, AW Dawe, LI Jacobs, P Nyman, LP Ralphs, AC Salomon (*British **Australian)
Company Secretary
CA Brighten
Transfer secretaries
Computershare Investor Services (Pty) Limited
Registration number 2004/003647/07
70 Marshall Street, Johannesburg, 2001
PO Box 61051, Marshalltown, 2107 South Africa
Telephone +27 (11) 370 5000
Telefax +27 (11) 688 7717
Registered office
Bidvest House, 18 Crescent Drive
Melrose Arch, Melrose
Johannesburg 2196, South Africa
PO Box 87274, Houghton
Johannesburg 2041, South Africa
Contact details
Telephone +27 (11) 772 8700
Facsimile +27 (11) 772 8970
e-mail info@bidvest.co.za
investor@bidvest.co.za
Further information regarding our Group can be found on the Bidvest website www.bidvest.com
Date: 27/08/2012 08:10:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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