Wrap Text
The Bidvest Group Limited results for the half year ended December 31 2012
The Bidvest Group Limited
(Bidvest or the Group or the Company)
Incorporated in the Republic of South Africa
Registration number 1946/021180/06
Share code: BVT ISIN: ZAE000117321
105 000 people defining the Bidvest DNA
Results for the half year ended December 31 2012
Revenue
+11,9%
up to R75,4 billion
Trading profit
+8,3%
up to R3,6 billion
Normalised headline earnings per share
+18,2%
up to 725,1 cents
Dividends per share
+15,7%
up to 324,0 cents
Comment
The Group achieved reasonable overall trading results for the half -year ended December 31 2012 despite
challenging trading conditions in many geographies. Management is to be commended on their focus and
commitment, though these efforts are not always reflected in the financial performance.
Normalised headline earnings per share (HEPS), excluding the abnormal profit of R399,1 million on the
partial sale of the investment in Mumbai International Airport Private Limited in the comparative period,
increased by 18,2% to 725,1 cents and normalised basic earnings per share (EPS) increased by 24,5% to
724,4 cents. HEPS declined by 2,3% to 725,1 cents while EPS increased by 1,9% to 724,4 cents.
In South Africa, lower demand in many industries combined with customers drive for cheaper cost of
services, is driving increased competition, some of which at sub economic rates. Despite low inflation,
cost pressures, particularly those of administered prices are increasing. The significant labour unrest
in the mining and transport sectors negatively impacted many operations. However, the overall trading
performance was good with excellent results from a number of divisions. Demand in the construction
industry and discretionary consumer spending remained weak. Asia Pacific continues to deliver solid
results, but the performance of Angliss Singapore lags those of the other businesses.
Bidvest Europes trading results reflect resilient performances from most operations other than Deli XL
Netherlands, which recorded a small loss. Bidvest Namibia recorded a 20,7% decline in trading profit,
primarily due to a decline in profits from fishing operations following a 25% reduction in quota
allocation.
Bidvest currently derives 27% of trading profit from its businesses outside of Africa. On translation,
currency fluctuations impact the Rand results. In the period, the average Rand exchange rate weakened
against some of the major currencies in which the Group trades, in particular against the Australian
Dollar and Sterling. Further detail on the currency effect on the translation of foreign operations is
shown in the supplementary information provided.
Financial overview
Revenue grew 11,9% to R75,4 billion (2011: R67,3 billion). The major growth occurred in Bidvest Europe
(R3,3 billion) and Bidvest Asia Pacific (R2,5 billion), which reflects some organic and acquisitive
growth and assistance from Rand weakness on translation.
Gross margin percentage declined marginally, largely due to mix change and acquisitions. Some margin
pressure was evident in certain industries. Operating expenses, which increased by 12,7%, were generally
well controlled across the Group, but were distorted by currency effects on translation and the impact
of acquisitions. The Group grew trading profit by 8,3% to R3,6 billion (2011: R3,3 billion). Trading
margin declined to 4,7% (2011: 4,9%), influenced by the relative increase in the contribution of lower
margin activities such as forwarding and clearing and automotive retailing as well as a decline in
trading profits in certain operations.
Share-based payment costs increased from R41,8 million in 2011 to R59,6 million in 2012. Incentivisation
of staff remains one of the cornerstones of driving managerial performance in Bidvest. Net finance charges
declined by R15,6 million to R352,9 million, reflecting the lower interest rate environment and improved
asset management.
Associate earnings have increased due to the normalisation of returns from some of the material Group
investments, buoyed by the first time contribution from Mvelaserve Limited.
The Groups financial position remains strong and the Group is well-capitalised. Net debt increased to
R6,2 billion (2011: R5,6 billion) and interest cover remained conservative at 10,0 times (December 2011:
8,9 times). Bidvests attitude to gearing remains conservative and the Group retains adequate borrowing
capacity.
Cash generated by operations before working capital changes increased by 11,0% to R4,4 billion (2011:
R4,0 billion).The Group utilised R2,5 billion of working capital compared to R1,6 billion utilisation
in the comparative period, reflecting growth and currency impacts. A significant portion of this
utilisation is likely to reverse in the second half of the financial year in line with our normal
working capital cycle. Inventories remain well controlled and although the increase in accounts
receivable reflects growth, credit extension remains a critical focus.
Fitch Ratings upgraded the Groups national long-term rating to AA(zaf) following South Africas
sovereign downgrade. Moodys continue to rate the Group at A1.za with a stable outlook.
Acquisitions
Bidvest announced in November 2012 its intention to make an offer for the shares in Amalgamated Appliance
Holdings Limited that it doesnt already own. Further details of the offer will be provided in a scheme
circular to be issued in the near future. A number of smaller acquisitions were made in the period.
Prospects
Current economic environments within which we operate our global business remain volatile and challenging. Growth
rates remain subdued with little evidence of sustained recovery. Management remain focused on their collective
effort in delivering stakeholder value despite these environmental factors. We remain true to our tried and tested
decentralised and entrepreneurial business model and significant effort has been directed throughout the Group to
ensure the Bidvest culture is reinforced.
In South Africa trading conditions are anticipated to remain lacklustre. Our divisional teams remain extremely
focused on delivering organic growth whilst seeking out acquisitive opportunities to complement our existing
service offering. Further progress in developing the Africa strategy in our products related businesses is
anticipated.
In Europe, further opportunities to add new product ranges and expand local footprints both via organic and
acquisitive growth remain a focus area across all businesses. In the Asia Pacific region, management focus
is directed to finding innovative value adding solutions for customers across all categories of products to enable
continued growth in our wholesale model. In the developing markets, further consolidation opportunities exist which
are being aggressively pursued. Management are confident of further organic and acquisitive growth.
Management focus remains on maintaining and improving customer service and ongoing cost control, which combined
with good working capital management will assist in delivering expected returns on funds employed. Effort is being
directed at those operations where performance is below our own expectations. Our financial position remains sound
and the Group has ample capacity to fund growth. We continue to see opportunities which combined with the acquisitive
expansion of our footprint and service offering, bodes well for the Group going forward.
Analyst presentation
The investor presentation will be available on the Bidvest website from 11:00 on March 4 2013.
Consolidated income statement
for the Half year ended Year ended
December 31 June 30
2012 2011 Percentage 2012
R000s Unaudited Unaudited change Audited
Revenue 75 375 780 67 344 875 11,9 133 533 633
Cost of revenue (60 728 367) (54 204 077) (106 241 730)
Gross income 14 647 413 13 140 798 11,5 27 291 903
Other income 398 069 339 958 646 058
Operating expenses (11 483 042) (10 192 376) (20 923 733)
Sales and distribution costs (7 423 646) (6 587 742) (13 993 709)
Administration expenses (2 595 606) (2 357 141) (4 365 840)
Other costs (1 463 790) (1 247 493) (2 564 184)
Trading profit 3 562 440 3 288 380 8,3 7 014 228
Share-based payment expense (59 636) (41 799) (121 524)
Profit on partial sale of investment in Mumbai
International Airport Private Limited 399 100 399 100
Acquisition costs (3 103) (1 405) (17 762)
Net capital items (4 143) (101 303) (133 743)
Operating profit 3 495 558 3 542 973 (1,3) 7 140 299
Net finance charges (352 857) (368 482) (784 666)
Finance income 39 519 39 997 46 256
Finance charges (392 376) (408 479) (830 922)
Share of profit of associates 88 485 23 504 77 298
Dividends received 20 510 20 054 43 733
Share of current year earnings 67 975 3 450 33 565
Profit before taxation 3 231 186 3 197 995 1,0 6 432 931
Taxation (853 291) (846 751) (1 695 458)
Profit for the period 2 377 895 2 351 244 1,1 4 737 473
Attributable to:
Shareholders of the Company 2 261 759 2 199 663 2,8 4 442 902
Minority shareholders 116 136 151 581 294 571
2 377 895 2 351 244 1,1 4 737 473
Shares in issue
Total (000) 312 775 310 706 311 952
Weighted (000) 312 224 309 462 310 324
Diluted weighted (000) 314 547 310 708 311 037
Basic earnings per share (cents) 724,4 710,8 1,9 1 431,7
Normalised basic earnings per share (cents) 724,4 581,8 24,5 1 309,8
Diluted basic earnings per share (cents) 719,1 708,0 1,6 1 428,4
Headline earnings per share (cents) 725,1 742,3 (2,3) 1 474,2
Normalised headline earnings per share (cents) 725,1 613,4 18,2 1 352,3
Diluted headline earnings per share (cents) 719,7 739,3 (2,7) 1 470,8
Normal dividends per share (cents) 324,0 280,0 15,7 622,0
Special dividends per share (cents) 80,0 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 2 261 759 2 199 663 2,8 4 442 902
Impairment of property, plant and equipment, goodwill 5 001 9 829 26 470
and intangible assets
Property, plant and equipment 6 969 8 146 13 223
Goodwill 4 127 8 141
Intangible assets 8 263
Tax relief (1 968) (2 444) (1 134)
Minority shareholders (2 023)
Net loss on disposal of interests in subsidiaries (4 948) (968)
and disposal and closure of businesses
Loss (profit) on disposal, and impairment of investments (3 003) 92 226 97 675
in associates
Impairment of investments in associate 96 700 96 700
Net loss (profit) on change in shareholding in associates (3 003) (4 474) 975
Net loss on disposal of property, plant and equipment 144 425 8 793
and intangible assets
Property, plant and equipment 177 1 752 43
Intangible assets 9 012
Tax relief (33) (708) (1 525)
Minority shareholders (619) 1 263
Headline earnings 2 263 901 2 297 195 (1,4) 4 574 872
Profit on partial sale of investment in Mumbai International
Airport Private Limited (399 100) (399 100)
Secondary taxation on companies on special dividend paid 20 781
Normalised headline earnings 2 263 901 1 898 095 19,3 4 196 553
Consolidated statement of other comprehensive income
for the Half year ended Year ended
December 31 June 30 June 30
2012 2011 2012
R000s Unaudited Unaudited Audited
Profit for the period 2 377 895 2 351 244 4 737 473
Other comprehensive income
Increase in foreign currency translation reserve 704 366 994 546 1 144 511
Increase in fair value of available-for-sale financial assets 1 517 3 502 4 047
Total comprehensive income for the period 3 083 778 3 349 292 5 886 031
Attributable to
Shareholders of the Company 2 963 173 3 188 070 5 580 830
Minority shareholders 120 605 161 222 305 201
3 083 778 3 349 292 5 886 031
Consolidated statement of financial position
as at December 31 June 30
2012 2011 2012
R000s Unaudited Unaudited Audited
ASSETS
Non-current assets 26 500 511 23 354 333 24 756 540
Property, plant and equipment 12 995 524 12 451 215 12 445 541
Intangible assets 957 053 777 620 860 957
Goodwill 8 202 062 7 050 206 7 449 997
Deferred tax asset 333 413 310 423 413 427
Defined benefit pension surplus 100 362 91 840 100 215
Interest in associates 1 121 437 589 947 1 089 859
Investments 2 216 053 1 614 753 1 889 140
Banking and other advances 574 607 468 329 507 404
Current assets 33 299 948 29 298 887 31 138 606
Vehicle rental fleet 1 413 062 1 295 834 1 272 720
Inventories 10 840 306 10 213 490 10 248 120
Short-term portion of banking and other advances 204 979 180 755 211 215
Trade and other receivables 15 071 641 13 238 690 13 535 245
Cash and cash equivalents 5 769 960 4 370 118 5 871 306
Total assets 59 800 459 52 653 220 55 895 146
EQUITY AND LIABILITIES
Capital and reserves 24 627 162 21 097 711 22 599 453
Attributable to shareholders of the Company 23 618 620 20 210 157 21 630 154
Minority shareholders 1 008 542 887 554 969 299
Non-current liabilities 6 876 294 5 823 165 5 431 932
Deferred tax liability 487 580 441 516 553 919
Life assurance fund 30 369 33 116 31 640
Long-term portion of borrowings 5 542 690 4 449 657 4 039 858
Post-retirement obligations 382 850 384 316 380 669
Long-term portion of provisions 288 230 291 351 274 015
Long-term portion of operating lease liabilities 144 575 223 209 151 831
Current liabilities 28 297 003 25 732 344 27 863 761
Trade and other payables 19 286 934 18 039 344 20 001 100
Short-term portion of provisions 467 376 253 360 374 535
Vendors for acquisition 81 485 5 539 61 325
Taxation 169 041 347 285 298 240
Short-term portion of banking liabilities 1 819 287 1 541 379 1 681 679
Short-term portion of borrowings 6 472 880 5 545 437 5 446 882
Total equity and liabilities 59 800 459 52 653 220 55 895 146
Net tangible asset value per share (cents) 4 623 3 985 4 270
Net asset value per share (cents) 7 551 6 505 6 934
Consolidated condensed statement of cash flows
for the Half year ended Year ended
December 31 June 30
2012 2011 2012
R000s Unaudited Unaudited Audited
Cash flows from operating activities (614 515) 361 247 4 577 878
Operating profit 3 495 558 3 542 973 7 140 299
Dividends from associates 20 510 20 054 43 733
Acquisition costs 3 103 1 405 17 762
Depreciation and amortisation 1 052 145 981 822 2 001 864
Other non-cash items (161 709) (574 764) (459 259)
Cash generated by operations before changes in working capital 4 409 607 3 971 490 8 744 399
Changes in working capital (2 522 867) (1 637 020) 197 584
Cash generated by operations 1 886 740 2 334 470 8 941 983
Net finance charges paid (350 554) (366 084) (668 954)
Taxation paid (989 659) (736 283) (1 632 383)
Dividends paid by Company (1 071 895) (794 809) (1 920 923)
subsidiaries (89 147) (76 047) (141 845)
Cash effects of investment activities (1 928 509) (1 043 847) (3 151 751)
Net additions to vehicle rental fleet (230 199) (320 126) (375 303)
Net additions to property, plant and equipment (1 027 939) (1 093 543) (1 812 785)
Net additions to intangible assets (129 356) (137 692) (294 549)
Net acquisition of subsidiaries, businesses, associates and investments (541 015) 507 514 (669 114)
Cash effects of financing activities 1 619 343 536 972 165 521
Proceeds from shares issued Company 56 227 56 247
subsidiaries 12 313 42 415
Net issue of treasury shares 94 675 113 436 182 188
Net borrowings raised (repaid) 1 512 355 367 309 (115 329)
Net increase (decrease) in cash and cash equivalents (923 681) (145 628) 1 591 648
Net cash and cash equivalents at the beginning of the period 4 615 458 2 809 043 2 809 043
Exchange rate adjustment 130 134 213 494 214 767
Net cash and cash equivalents at the end of the period 3 821 911 2 876 909 4 615 458
Net cash and cash equivalents comprise:
Cash and cash equivalents 5 769 960 4 370 118 5 871 306
Bank overdrafts shown as short-term portion of borrowings (1 948 049) (1 493 209) (1 255 848)
3 821 911 2 876 909 4 615 458
Consolidated statement of changes in equity
for the Half year ended Year ended
December 31 June 30
2012 2011 2012
R000s Unaudited Unaudited Audited
Shareholders interest
Issued share capital 16 387 16 386 16 387
Balance at the beginning of the period 16 387 16 367 16 367
Shares issued during the period 19 20
Share premium arising on shares issued 137 485 137 466 137 485
Balance at the beginning of the period 137 485 81 258 81 258
Shares issued during the period 56 246 56 260
Share issue costs (38) (33)
Foreign currency translation reserve 2 065 946 1 213 287 1 366 049
Balance at the beginning of the period 1 366 049 248 830 248 830
Realisation of reserve on disposal of subsidiaries (20 448) (16 662)
Arising during the period 699 897 984 905 1 133 881
Statutory reserves 13 801
Balance at the beginning of the period 15 894 15 894
Transfer to retained earnings (2 093) (15 894)
Equity-settled share-based payment reserve 177 127 377 494 165 237
Balance at the beginning of the period 165 237 391 430 391 430
Arising during the period 11 890 (13 936) 121 456
Deferred tax recognised directly in reserve 1 417
Utilisation during the year (56 273)
Transfer to retained earnings (292 793)
Retained earnings 23 130 685 20 524 160 21 948 681
Balance at the beginning of the period 21 948 681 19 101 358 19 101 358
Attributable profit 2 261 759 2 199 663 4 442 902
Change in fair value of available-for-sale financial assets 1 517 3 502 4 047
Dividends paid (1 071 895) (794 809) (1 920 923)
Transfer of reserves as a result of changes in shareholding of subsidiaries (9 377) 12 353 12 610
Transfer from other reserves 2 093 308 687
Treasury shares (1 909 010) (2 072 437) (2 003 685)
Balance at the beginning of the period (2 003 685) (2 185 873) (2 185 873)
Shares disposed of in terms of share incentive scheme 94 675 113 436 182 188
23 618 620 20 210 157 21 630 154
Equity attributable to minority shareholders of the Company
Balance at the beginning of the year 969 299 787 728 787 728
Attributable profit 116 136 151 581 294 571
Dividends paid (89 147) (76 047) 10 630
Movement in foreign currency translation reserve 4 469 9 641 (141 845)
Movement in equity-settled share-based payment reserve 69
Issue of shares by subsidiaries 12 313 42 415
Transactions with minorities (13 905) 27 004 (11 659)
Transfer of reserves as a result of changes in shareholding of subsidiaries 9 377 (12 353) (12 610)
1 008 542 887 554 969 299
Total equity 24 627 162 21 097 711 22 599 453
Segmental analysis
for the Half year ended Year ended
December 31 Percentage June 30
change
R000s 2012 2011 2012
REVENUE
Bidvest South Africa 34 095 396 32 166 581 6,0 62 672 667
Automotive 10 474 481 10 363 506 1,1 19 130 896
Electrical 2 174 265 2 128 379 2,2 4 286 092
Financial Services 812 363 815 793 (0,4) 1 715 660
Freight 11 924 386 10 450 386 14,1 20 833 921
Industrial 777 008 775 245 0,2 1 473 920
Office 2 152 183 2 092 138 2,9 4 183 978
Paper Plus 2 027 366 1 984 934 2,1 3 858 146
Rental and Products 1 069 752 989 361 8,1 2 057 282
Services 1 591 891 1 542 097 3,2 3 086 476
Travel and Aviation 1 091 701 1 024 742 6,5 2 046 296
Bidvest Foodservice 40 796 943 35 002 381 16,6 70 756 633
Asia Pacific 14 199 570 11 716 677 21,2 23 493 350
Europe 23 596 580 20 322 808 16,1 41 114 785
Southern Africa 3 000 793 2 962 896 1,3 6 148 498
Bidvest Namibia 1 681 438 1 254 771 34,0 2 971 322
Bidvest Corporate 485 198 381 908 27,0 834 399
77 058 975 68 805 641 12,0 137 235 021
Inter Group eliminations (1 683 195) (1 460 766) (3 701 388)
75 375 780 67 344 875 11,9 133 533 633
TRADING PROFIT
Bidvest South Africa 2 030 855 1 799 830 12,8 3 822 564
Automotive 307 310 227 877 34,9 502 365
Electrical 78 669 69 957 12,5 207 554
Financial Services 334 124 287 556 16,2 586 743
Freight 451 996 425 128 6,3 922 216
Industrial 47 404 49 232 (3,7) 81 803
Office 130 711 141 150 (7,4) 275 149
Paper Plus 175 369 186 213 (5,8) 328 140
Rental and Products 197 441 171 596 15,1 383 806
Services 121 186 94 311 28,5 215 414
Travel and Aviation 186 645 146 810 27,1 319 374
Bidvest Foodservice 1 163 905 1 064 283 9,4 2 222 094
Asia Pacific 560 837 495 371 13,2 1 000 042
Europe 420 382 378 987 10,9 912 729
Southern Africa 182 686 189 925 (3,8) 309 323
Bidvest Namibia 249 270 314 401 (20,7) 637 694
Bidvest Corporate 118 410 109 866 7,8 331 876
3 562 440 3 288 380 8,3 7 014 228
Divisional review
Bidvest South Africa
The businesses achieved positive revenue and earnings growth in challenging market conditions. Revenue increased
6,0% to R34,1 billion (2011: R32,2 billion). Trading profits increased by 12,8% to R2,0 billion with impressive
contributions by Bidvest Automotive (34,9%), Bidvest Services (28,5%) and Bidvest Travel and Aviation (27,1%).
Bidvest Automotive results were excellent, with trading profit up 34,9% to R307,3 million (2011: R227,9 million).
Revenue rose to R10,5 billion. In 2012, dealer swaps were no longer accounted for as revenue. Excluding these in the
2011 comparative, revenue would have grown by 7,8%. Positive cash flows and the cash conversion ratio were highlights
of the half-year.
Overall, new vehicle performance remained sound in the context of continued dealership rationalisation. Pleasing
results were achieved by VW/Audi, Toyota/Hino, Mercedes Benz, Nissan/UD Trucks and Autohaus Centurion. Good growth
was achieved by Chrysler/Jeep/Dodge and Land Rover. Burchmores had a disappointing half-year. New vehicle
and parts margins remained under pressure, but service margins improved as did customer satisfaction scores.
Continued progress was made with the reorganisation of the parts division. Competition authority approval was
received for the sale of the Peugeot / Citroen Division and Volvo and Landrover Pietermaritzburg dealerships. In
addition, the sales of Volvo Midrand, Fiat East Rand, Renault The Glen and Volvo Tygervalley dealerships were
concluded.
Bidvest Electrical returned solid results, despite the continuing challenges in the construction sector.
Strikes in the energy sector and the mining industry disruption were also negative. Revenue moved 2,2% higher to
R2,2 billion (2011: R2,1 billion) with trading profit up 12,5% to R78,7 million (R2011: R70,0 million). Atlas
continued to disappoint. Remedial action is under way. Versalec was impacted by the subdued project sector, but
going forward has secured significant orders from contractors. Wacos result was acceptable, despite pressure on
independent electrical wholesalers. Sales volumes moved higher. Cabstrut profitability has improved. Voltex Retail
was impacted by the loss of sales through a major retail chain. Revenues and profitability improved at Voltex
Lighting. The merger of Sanlic and the House of Locks was successfully completed.
Financial Services performed well overall in a challenging market with trading profit up 16,2% to R334,1 million
(2011: R287,6 million).
Bidvest Bank was impacted by falling interest rates and a volatile and weakening Rand. Transaction volumes dropped
marginally and pre-tax profit declined 4,7% to R197,3 million. Net interest income reached R94,0 million, though
net fee, commission and trading income was flat. Net income from leasing activities fell 15,6% to R141,7 million.
Operating expenditure was well managed and the bank remained strongly cash generative with cash on hand of R1,6
billion. The asset base grew to R4,4 billion from R3,9 billion. Moodys affirmed the banks unchanged national
issuer rating of A3.za/P-2.za with a stable outlook.
Bidvest Insurance faced a challenging trading environment, but grew pre-tax profit by 80,9% to R128,6 million
(2011: R71,0 million), bolstered by a good second quarter. Bidvest Insurance further strengthened its balance
sheet and generated good cash flows. Gross premium income came under pressure compared to prior year however the
equity portfolio performed well. Claims experience was generally positive and expenses were well controlled. The
net underwriting result was down on budget but up on prior year. Continued progress was made on the development
of new products and distribution channels. Marketing investment was stepped up.
Bidvest Freight performance was below expectation as a result of a slow-down of cargo volumes. Trading
profit rose 6,3% to R452,0 million (2011: R425,1 million). Revenue was up 14,1% at R11,9 billion, (2011: R10,5
billion). Bulk Connections put in an impressive performance and continued to grow the range of products handled,
benefiting from the facility upgrade. Volumes at the Island View Storage bulk liquids business were flat, impacted
by the switch from road tankers to Transnets new pipeline. Tonnages of dry bulk products at SABT were lower as a
result of reduced maize and wheat volumes. Performance at Bidvest Panalpina Logistics was disappointing, though
the transport division increased market share. Container and airfreight volumes are still down. BPO was impacted
by low steel and paper exports, but stevedoring performance was positive and agency business expanded. Trading
at SACD Freight remained challenging on sluggish container volumes. Export revenue was flat. Naval benefited from
good iron ore and sized coal exports. Manica delivered an improved trading performance following aggressive
restructuring.
Bidvest Industrial was affected by volatile trading conditions. Revenue was flat at R777,0 million (2011:
R775,2 million). Trading profit of R47,4 million (2011: R49,2 million) was down 3,7%. Expenses were well controlled
in the face of continued margin squeeze. Afcoms results were poor, though second quarter improvements were achieved.
Berzacks returned excellent results, boosted by a strong run by the industrial sewing and embroidery machines
business. Materials Handling was impacted by weaker sales. New dealers were added to the national network. Working
capital management improved and trading profit moved higher. Buffalo Executape had a difficult six months. Revenue
dipped, though returns were healthy. Vulcan performed well, drove turnover higher and entered the bakery
equipment sector. Yamaha faced tough market conditions on very weak discretionary consumer spending. The Motor Bike
and Marine division under-performed.
Bidvest Office achieved modest revenue improvements up 2,9% to R2,2 billion (2011: R2,1 billion) while trading
profit dropped 7,4% to R130,7 million (2011: R141,2 million). Expenses were well controlled. Operational
performance was mixed. The Stationery group recovered following a well executed back-to-school strategy. Technology
group results were acceptable, but impacted by delays in major contract awards at Konica Minolta and Océ. Results
at GPT were good in a challenging market, but work continues on changes to the business model. Losses within the
furniture business were stemmed and demand rose significantly at Dauphin and Cecil Nurse. Order books are well up
at the furniture manufacturing business.
Bidvest Paperplus had a challenging half-year but grew revenue by 2,1% to R2,0 billion on the back of increased
sales of packaging products, office supplies and marketing print. Trading profit fell 5,8% to R175,4 million
(2011: R186,2 million), impacted by lower export project work, lower than expected volumes in the wholesale
stationery business and lower than projected SoluXions product sales to state schools. Overall expenses were well
controlled. Sales by the Printing and Conversion business rose on a good performance by Silveray Mobeni. Labelling
and Packaging achieved good growth, but at lower margins. Revenue was down at the Wholesale Stationery Division as
Silveray sales dipped. Volumes at Personalisation and Mailing were under pressure with Lithotech Afric Mail
experiencing a short-term volume decline in certain customer requirements. Email Connection benefited from additional
contract work and new product offerings, delivering an excellent performance.
Bidvest Rental and Products put in a solid performance. Revenue rose 8,1% to R1,1 billion (2011: R989,4 million)
with trading profit 15,1% higher at R197,4 million (2011: R171,6 million). Steiner Hygiene continued its strong run,
though Rand weakness impacted the cost of goods sold. Pest control maintained impressive growth. The laundry group
grew profit off a strong rental base. Rising costs remain a concern. G. Fox, continued to benefit from the Alsafe
acquisition. Swaziland operations made a notable contribution. Revenue was under pressure at Pureau. Growth
opportunities in the filtration field are being explored. Execufloras revenue base remained under pressure and the
Pretoria branch was closed. Silk By Design had a good six months. Hotel Amenities and Steripic relocated to
state-of-the-art premises, the benefits of which will flow into the future.
Bidvest Services grew revenue by 3,2% to R1,6 billion (2011: R1,5 billion) while trading profit moved 28,5% higher to
R121,2 million (2011: R94,3 million). Operating expenditure was well managed across all businesses and return on funds
employed improved significantly. The Prestige office cleaning business achieved excellent new business growth, but
performance was impacted by certain contract losses. Magnums results were disappointing as additional labour costs
impacted the guarding business while the technology businesses failed to maintain sales momentum. TMS Group continued
its recovery with certain divisions excelling. Top Turf optimised opportunities flowing from increased contract revenue
in South Africa and Mauritius.
Bidvest Travel and Aviation put in a very pleasing performance. Revenue rose 6,5% to R1,1 billion (2011: R1,0
billion). Trading profit moved 27,1% higher to R186,7 million (2011: R146,8 million). Travel businesses generally exceeded
expectation, despite margin pressure and tough trading conditions. Budget Car and Van Rental grew market share and rental
days, but rental duration and fleet utilisation fell. Bidair performed ahead of expectation. Revenue at Bidair Services
was impacted by the loss of a significant airline contract. Double-digit growth in passenger numbers was achieved at
Bidvest Lounges. Bidair Cargo performed well, growing domestic and cross-border volumes.
Bidvest Foodservice
Foodservice revenue grew 16,6% to R40,8 billion (2011: R35,0 billion). Rand weakness accentuated revenue growth in
Bidvest Europe and Asia Pacific.
The recently launched Asian procurement business, based in Hong Kong and Shanghai, will unlock further growth by
seeking continued buy-in from all Bidvest foodservice geographies in its quest to derive synergistic benefits for the
division.
Asia Pacific
Bidvest Australia had a good start to the year with six-month sales up 13,1% in local currency. Expenses were well
controlled in the face of rising electricity costs and branch relocation expenses. Foodservice division put in another
good performance, despite margin pressure. Hospitality had a poor six months and a restructure is under way to change the
business model and align the business more closely with the Foodservice branch network. Fresh did well on the back of a
major contract success and national expansion is being pursued. Logistics also performed at better levels, although
volumes remain lacklustre. Bidvest New Zealand put in another good performance with the Foodservice, Fresh, Logistics and
Butchery divisions all up on prior year. Angliss Singapore made continued progress with the strategic move from
commodities-based trading to direct sales to end-customers. Sales volumes are lower, but higher margins and more acceptable
and sustainable profits are anticipated. Angliss Greater China achieved continued strong growth. Hong Kong and Macau
benefited from a late surge in sales as the Chinese economy appeared to improve. Further expansion of the branch footprint
in mainland China is under way.
Latin America
Deli Meals in Chile, acquired in November 2011, continues to grow. The business has doubled sales since acquisition and an
import programme has been set up. We continue to actively pursue further growth in Latin America, which we believe will be
a strong developing foodservice market.
Europe
3663 Wholesale in the UK put in a strong sales performance, with free-trade volumes significantly higher. Severe
margin pressures in the overall market remain, and the business continued to invest to ensure its infrastructure delivers
the required efficiencies. Sales at Bidvest Logistics were above budget and a record number of cartons of product were
transported. Bidvest Fresh UK (incorporating Seafood Holdings and the newly acquired Oliver Kay fresh produce business)
performed very well. Overall, the London Olympics had a minimal impact on the UK businesses. Deli XL Netherlands had a
difficult first half, generating a small trading loss in a shrinking market characterised by extreme margin pressure.
Deli XL Belgium grew sales, assisted by the first contribution of a newly acquired Horeca wholesaler in Brussels,
although the Belgium institutional market is under the same pressure as the Dutch. Bidvest Czech Republic & Slovakia
grew revenue and profit despite a tough retail market. Expansion into speciality meat products continues to gain
momentum. In Slovakia, retail sales were boosted by the Frost acquisition in 2011 and growing ice-cream volumes. Bidvest
Baltics saw continued foodservice gains, but retail volumes and other sales declined, according to plan. Farutex Poland
grew sales in a declining economy, but trading profit was below expectation. Horeca Dubai achieved continued sales gains
and has recently opened a new distribution centre in Abu Dhabi. The Al Diyafa joint-venture in Saudi Arabia performed
very strongly.
Southern Africa
Bidvest Food Southern Africa achieved solid sales growth on the back of good volumes at the ingredients business.
Margins were under pressure at all companies. Expense savings were achieved thanks to BFS multi-temp mergers, the
integration of NCP Yeast into Bidvest Bakery Solutions and rationalisation at Patleys.
National accounts were under pressure at BFS. Investment continued in the BFS multi-temp fleet and facilities. The A&S
Cape business was integrated into the multi-temp airport facility while the Caternet business was integrated into Lous
wholesale facilities. In Durban, the Chipkins Catering Supplies business was merged into the BFS Durban multi-temp
facility.
CFG gained market share in the supermarket and independent account channel. The NCP Durban plant rationalization
commenced in October 2012, with the industrial and consumer business being merged into Bidvest Bakery Supplies and
Patleys respectively. The world class Innovation, Design and Technology Centre was completed and launched at Crown in
Cape Town. The So Good Foods wet plant was successfully commissioned to enhance production capabilities. Patleys returned
to profit following extensive restructuring in the prior year.
Bidvest Namibia
Though trading results were down on the prior period, overall performance exceeded expectation. Revenue rose 34,0% to
R1,7 billion (2011: R1,3 billion) while trading profit fell 20,7% to R249,3 million (2011: R314,4 million).
Fishing division results were impacted by a 25% reduction in quota allocations in 2012, lower catch efficiencies, high
quota purchase costs and a weak performance at Pesca Fresca in Angola. Fleet efficiencies were undermined by pressure
from foreign operators. Overall results at Commercial and Industrial Services were below expectation. The freight,
logistics, marine services and material handling businesses were impacted by a decline in port activities. Results in
the Food and Distribution Services division were disappointing, particularly in the wholesale distribution sector.
Bidvest Corporate
Bidvest Properties continued with its strategy of developing inhouse properties for group requirements. New premises
were acquired for Voltex in Alrode and a new site earmarked for Seaworld Bloemfontein. The property companys extensive
refurbishment programme continued. In Ontime Automotive, Vehicle transportation returned to profit and Parking Solutions
continued to make modest gains, but overall results were impacted by further losses at Rescue & Recovery.
Directorate
Fred Barnes, Lionel Jacobs, Joseph Pamensky and Alan Salomon did not offer themselves for reelection as directors of
Bidvest at the AGM held on November 26 2012. Peter Nyman, Rachel Kunene and Muriel Dube resigned from the board
with effect from November 26 2012.
The board expresses their thanks to the aforementioned directors for their dedication, advice and guidance provided
to the board over the past number of years and wishes them well in the future.
MC Ramaphosa B Joffe
Chairman Chief Executive
Dividend declaration
In line with the Group's dividend policy, the directors have declared a final gross cash dividend of 324,0 cents (275,4
cents net of dividend withholding tax, where applicable) per ordinary share for the six months ended December 31 2012
to those members registered on the record date, being Thursday, March 28 2013.
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 dividend per share 324,0 cents
Net dividend amount per share 275,4 cents
Issued shares as at declaration date 327 734 929
Declaration date Monday, March 4 2013
Last day to trade cum dividend Wednesday, March 20 2013
First day to trade ex dividend Friday, March 22 2013
Record date Thursday, March 28 2013
Payment date Tuesday, April 2 2013
Share certificates may not be dematerialised or rematerialised between Friday, March 22 2013 and Thursday,
March 28 2013, both dates inclusive.
For and on behalf of the board.
CA Brighten
Company secretary
Johannesburg
March 4 2013
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 Institute of Chartered Accountants Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council 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 2012.
During the period certain operations were reclassified between segments. The comparative periods segmental information
has been represented to reflect these changes.
Unaudited results
These results have not been reviewed or reported on by the Groups auditors. The condensed financial statements have
been prepared under the supervision of NEJ Goodwin CA(SA) and were approved by the board of directors on March 4 2013.
Exchange rates
The following exchange rates were used in the conversion of foreign interests and foreign transactions during the
periods:
December 31 June 30
2012 2011 2012
Rand/Sterling
Closing rate 13,72 12,58 12,94
Average rate 13,52 12,13 12,34
Rand/Euro
Closing rate 11,21 10,51 10,46
Average rate 10,82 10,53 10,41
Rand/Australian dollar
Closing rate 8,80 8,29 8,42
Average rate 8,81 7,86 8,03
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 Groups foreign operations trade,
namely Sterling (12,13 in 2011 to 13,52 in 2012), the Euro (10,53 in 2011 to 10,82 in 2012) and the Australian dollar
(7,86 in 2011 to 8,81 in 2012). The illustrative information, detailed below, 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 period.
For the half year ended December 31
Illustrative 2012 at
2011 average exchange rates
Actual Percentage Actual Recalculated Percentage
2012 change 2011 2012 change
Revenue (Rm) 75 375,8 11,9 67 344,9 71 971,9 6,9
Trading profit (Rm) 3 562,4 8,3 3 288,4 3 472,5 5,6
Headline earnings (Rm) 2 263,9 (1,4) 2 297,2 2 201,2 (4,2)
HEPS (cps) 725,1 (2,3) 742,3 705,0 (5,0)
Normalised HEPS (cps) 725,1 18,2 613,4 705,0 14,9
The financial information has been compiled for illustrative purposes and is the responsibility of the 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. This information has not been reviewed or reported on by the Group's
auditors.
Directors
Chairman: MC Ramaphosa
Independent non-executive: PC Baloyi, DDB Band, EK Diack, S Koseff, AK Maditsi, D Masson, L Phalatse,
NG Payne, Adv FDP Tlakula
Non-executive: AA Da Costa (alternate LJ Mokoena), T Slabbert
Executive: B Joffe (Chief executive), BL Berson*, DE Cleasby, AW Dawe, LP Ralphs
(*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
Further information regarding our Group can be found on the Bidvest website
www.bidvest.com
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