Wrap Text
Audited results for the year ended June 30 2013
The Bidvest Group Limited
Registration number 1946/021180/06
Share code: BVT ISIN: ZAE000117321
(Bidvest or the Group or the Company)
Incorporated in the Republic of South Africa
Audited results for the year ended June 30 2013
Highlights
Revenue +14,9% up to R153,4 billion
Revenue grew 14,9% to R153,40 billion (2012: R133,53 billion).
EBITDA up 8,4% to R9,8 billion.
EBITDA interest cover up to 12,8 times (11,5 times).
Normalised headline earnings up 16,2% to R4,9 billion.
Normalised HEPS +15,4% up to 1 560,6 cents
Dividends per share +15,8% up to 720,0 cents
Summarised consolidated income statement
for the year ended June 30
R000s Percentage
2013 2012 change
Revenue 153 404 532 133 533 633 14,9
Cost of revenue (123 039 972) (106 241 730)
Gross income 30 364 560 27 291 903 11,3
Other income 800 817 646 058
Operating expenses (23 490 150) (20 923 733)
Sales and distribution costs (15 610 550) (13 993 709)
Administration expenses (5 002 728) (4 365 840)
Other costs (2 876 872) (2 564 184)
Trading profit 7 675 227 7 014 228 9,4
Share-based payment expense (119 650) (121 524)
Profit on partial sale of investment
in Mumbai International - 399 100
Airport Private Limited
Acquisition costs (14 181) (17 762)
Net capital items (102 476) (133 743)
Operating profit 7 438 920 7 140 299 4,2
Net finance charges (764 546) (784 666)
Finance income 76 659 46 256
Finance charges (841 205) (830 922)
Share of profit of associates 161 824 77 298
Dividends received 64 466 43 733
Share of current year earnings 97 358 33 565
Profit before taxation 6 836 198 6 432 931 6,3
Taxation (1 783 782) (1 695 458)
Profit for the year 5 052 416 4 737 473 6,6
Attributable to:
Shareholders of the Company 4 772 432 4 442 902 7,4
Minority shareholders 279 984 294 571
5 052 416 4 737 473 6,6
Shares in issue
Total 313 555 311 952
Weighted ('000) 312 577 310 324
Diluted weighted ('000) 314 379 311 037
Basic earnings per share (cents) 1 526,8 1 431,7 6,6
Diluted basic earnings per share (cents) 1 518,0 1 428,4 6,3
Normalised basic earnings per share (cents) 1 526,8 1 303,1 17,2
Headline earnings per share (cents) 1 560,6 1 474,2 5,9
Diluted headline earnings per share (cents) 1 551,6 1 470,8 5,5
Normalised headline earnings per share (cents) 1 560,6 1 352,3 15,4
Normal dividends per share (cents) 720,0 622,0 15,8
Interim 324,0 280,0
Final 396,0 342,0
Special dividend 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 4 772 432 4 442 902 7,4
Impairment of property, plant
and equipment; goodwill and
intangible assets 101 101 26 470
Property, plant and equipment 3 536 13 223
Goodwill 29 328 8 141
Intangible assets 98 637 8 263
Tax relief (30 400) (1 134)
Minority shareholders - (2 023)
Net loss (profit) on disposal
of interests
in subsidiaries and disposal and closure
of businesses 12 779 (968)
Loss (profit) on disposal and closure 17 749 (2 614)
Tax charge (relief) (4 970) 1 646
Loss (profit) on disposal, impairment
and reversal of impairment of investments
in associates (41 230) 97 675
Impairment of investments in associate 75 000 96 700
Reversal of impairment of investments
in associates (80 000) -
Net loss (profit) on change in
shareholding in associates (47 988) 975
Tax charge 11 758 -
Net loss on disposal of property,
plant and equipment;
and intangible assets 4 183 8 793
Property, plant and equipment 6 214 43
Intangible assets - 9 012
Tax relief (2 031) (1 525)
Minority shareholders - 1 263
Non-headline earnings items
included in equity accounted earnings
of associated companies 28 755 -
Headline earnings 4 878 020 4 574 872 6,6
Profit on partial sale of investment in Mumbai
International Airport Private Limited - (399 100)
Secondary Taxation on Companies on special
dividend paid - 20 781
Normalised headline earnings 4 878 020 4 196 553 16,2
Summarised consolidated statement of other comprehensive income
for the year ended June 30
R000s 2013 2012
Profit for the year 5 052 416 4 737 473
Other comprehensive income (expense)
Items that may be classified subsequently
to profit or loss
Increase in foreign currency translation
reserve 1 836 112 1 144 511
Increase(decrease) in fair value of
available-for-sale financial assets (9 306) 4 047
Increase in fair value of cash flow hedges 42 581 -
Fair value gains arising during the year 58 722 -
Tax charge (16 141) -
Total comprehensive income for the year 6 921 803 5 886 031
Attributable to
Shareholders of the Company 6 621 460 5 580 830
Minority shareholders 300 343 305 201
6 921 803 5 886 031
Summarised consolidated statement of cash flows
for the year ended June 30
R000s 2013 2012
Cash flows from operating activities 2 666 069 4 577 878
Operating profit 7 438 920 7 140 299
Dividends from associates 64 466 43 733
Acquisition costs 14 181 17 762
Depreciation and amortisation 2 097 264 2 001 864
Other non-cash items (356 413) (459 259)
Cash generated by operations
before changes in working capital 9 258 418 8 744 399
Changes in working capital (1 891 175) 197 584
Cash generated by operations 7 367 243 8 941 983
Net finance charges paid (626 549) (668 954)
Taxation paid (1 847 495) (1 632 383)
Dividends paid by - Company (2 088 982) (1 920 923)
- subsidiaries (138 148) (141 845)
Cash effects of investment activities (3 168 357) (3 151 751)
Net additions to vehicle rental fleet (282 486) (375 303)
Net additions to property, plant
and equipment (2 201 338) (1 812 785)
Net additions to intangible assets (287 253) (294 549)
Net acquisition of subsidiaries,
businesses, associates and
investments (397 280) (669 114)
Cash effects of financing activities 2 459 971 165 521
Proceeds from shares issued - Company - 56 247
- subsidiaries 30 635 42 415
Net issue of treasury shares 151 539 182 188
Net borrowings raised (repaid) 2 277 797 (115 329)
Net decrease in cash and cash equivalents 1 957 683 1 591 648
Net cash and cash equivalents at beginning
of the year 4 615 458 2 809 043
Exchange rate adjustment 519 014 214 767
Net cash and cash equivalents at end of the year 7 092 155 4 615 458
Net cash and cash equivalents comprise:
Cash and cash equivalents 8 452 559 5 871 306
Bank overdrafts shown as short-term portion of
interest-bearing debt (1 360 404) (1 255 848)
7 092 155 4 615 458
Summarised consolidated statement of financial position
as at June 30
R000s 2013 2012
ASSETS
Non-current assets 28 820 557 24 756 540
Property, plant and equipment 13 872 872 12 445 541
Intangible assets 1 025 768 860 957
Goodwill 8 853 973 7 449 997
Deferred taxation asset 519 828 413 427
Defined benefit pension surplus 101 794 100 215
Interest in associates 1 199 879 1 089 859
Investments 2 507 906 1 889 140
Banking and other advances 738 537 507 404
Current assets 37 857 862 31 138 606
Vehicle rental fleet 1 363 704 1 272 720
Inventories 11 839 302 10 248 120
Short-term portion of banking
and other advances 276 173 211 215
Trade and other receivables 15 926 124 13 535 245
Cash and cash equivalents 8 452 559 5 871 306
Total assets 66 678 419 55 895 146
EQUITY AND LIABILITIES
Capital and reserves 27 550 719 22 599 453
Attributable to shareholders
of the Company 26 373 592 21 630 154
Minority shareholders 1 177 127 969 299
Non-current liabilities 8 937 319 5 498 206
Deferred taxion liability 604 586 553 919
Life assurance fund 30 174 31 640
Long-term portion of borrowings 7 469 635 4 039 858
Post-retirement obligations 312 739 380 669
Long-term portion of provisions 371 353 340 289
Long-term portion of operating
lease liabilities 148 832 151 831
Current liabilities 30 190 381 27 797 487
Trade and other payables 21 858 775 20 001 100
Short-term portion of provisions 363 136 308 261
Vendors for acquisition 113 971 61 325
Taxation 299 967 298 240
Short-term portion of banking
liabilities 2 024 236 1 681 679
Short-term portion of borrowings 5 530 296 5 446 882
Total equity and liabilities 66 678 419 55 895 146
Number of shares in issue 313 555 311 952
Net tangible asset value per
share (cents) 5 260 4 270
Net asset value per share (cents) 8 411 6 934
Summarised consolidated statement of changes in equity
for the year ended June 30
R000s 2013 2012
Equity attributable to shareholders
of the Company
Issued share capital 16 387 16 387
Balance at beginning of the year 16 387 16 367
Shares issued during the year - 20
Share premium arising on shares issued 137 485 137 485
Balance at beginning of the year 137 485 81 258
Shares issued during the year - 56 260
Share issue costs - (33)
Foreign currency translation reserve 3 181 802 1 366 049
Balance at beginning of the year 1 366 049 248 830
Realisation of reserve on disposal
of subsidiaries - (16 662)
Arising during the year 1 815 753 1 133 881
Hedging reserve 42 581 -
Balance at beginning of the year - -
Fair value gains arising during
the year 58 722 -
Deferred tax recognised directly
in reserve (16 141) -
Equity-settled share-based
payment reserve 255 319 165 237
Balance at beginning of the year 165 237 391 430
Arising during the year 119 414 121 454
Deferred tax recognised directly
in reserve 15 859 1 419
Utilisation during the year (45 191) (56 273)
Transfer to retained earnings - (292 793)
Retained earnings 24 592 164 21 948 681
Balance at beginning of the year 21 948 681 19 101 358
Attributable profit 4 772 432 4 442 902
Change in fair value of
available-for-sale financial assets (9 306) 4 047
Dividends paid (2 088 982) (1 920 923)
Transfer of reserves as a result of
changes in shareholding of subsidiaries (30 661) 12 610
Transfer from other reserves - 308 687
Treasury shares (1 852 146) (2 003 685)
Balance at beginning of the year (2 003 685) (2 185 873)
Shares disposed of in terms of share
incentive scheme 151 539 182 188
26 373 592 21 630 154
Equity attributable to minority
shareholders of the Company
Balance at beginning of the year 969 299 787 728
Attributable profit 279 984 294 571
Dividends paid (138 148) (141 845)
Movement in foreign currency
translation reserve 20 359 10 630
Movement in equity-settled
share-based payment reserve 236 69
Issue of shares by subsidiaries 30 635 42 415
Transactions with minorities (15 899) (11 659)
Transfer of reserves as a result of changes
in shareholding of subsidiaries 30 661 (12 610)
1 177 127 969 299
Total equity 27 550 719 22 599 453
Summarised segmental analysis
for the year ended June 30
R000s Percentage
REVENUE 2013 2012 change
Bidvest South Africa 69 266 131 62 672 667 10,5
Automotive 20 704 970 19 130 896 8,2
Electrical 4 527 394 4 286 092 5,6
Financial Services 1 458 683 1 715 660 (15,0)
Freight 25 114 347 20 833 921 20,5
Industrial 1 528 760 1 473 920 3,7
Office 4 245 566 4 183 978 1,5
Paperplus 4 031 330 3 858 146 4,5
Rental and Products 2 208 649 2 057 282 7,4
Services 3 239 334 3 086 476 5,0
Travel and Aviation 2 207 098 2 046 296 7,9
Bidvest Foodservice 82 716 213 70 300 093 17,7
Asia Pacific 28 626 542 23 493 350 21,8
Europe 48 156 247 41 114 785 17,1
Southern Africa 5 933 424 5 691 958 4,2
Bidvest Namibia 3 597 158 2 971 322 21,1
Bidvest Corporate 973 698 834 399 16,7
Properties 339 034 317 658 6,7
Corporate and investments 634 664 516 741 22,8
156 553 200 136 778 481 14,5
Inter Group eliminations (3 148 668) (3 244 848)
153 404 532 133 533 633 14,9
TRADING PROFIT
Bidvest South Africa 4 223 653 3 822 564 10,5
Automotive 640 956 502 365 27,6
Electrical 224 614 207 554 8,2
Financial Services 594 883 586 743 1,4
Freight 979 402 922 216 6,2
Industrial 86 030 81 803 5,2
Office 324 259 275 149 17,8
Paperplus 281 292 328 140 (14,3)
Rental and Products 435 825 383 806 13,6
Services 276 465 215 414 28,3
Travel and Aviation 379 927 319 374 19,0
Bidvest Foodservice 2 488 149 2 222 094 12,0
Asia Pacific 1 211 408 1 000 042 21,1
Europe 936 242 912 729 2,6
Southern Africa 340 499 309 323 10,1
Bidvest Namibia 592 223 637 694 (7,1)
Bidvest Corporate 371 202 331 876 11,8
Properties 324 015 296 879 9,1
Corporate and investments 47 187 34 997 34,8
7 675 227 7 014 228 9,4
Message to shareholders
Commentary
The Group delivered solid trading results for the year ended June 30 2013, achieved
against a backdrop of challenging trading environments in many geographies in which
we operate. The Bidvest team are to be complemented on a job well done.
Normalised headline earnings per share has increased by a commendable 15,4% to
1 560,6 cents per share.
Bidvest South Africa delivered pleasing results against a backdorp of competive markets
and subdued economic activity. Bidvest Asia Pacific continues to deliver robust results.
Bidvest Europe's results reflect resilient performances from most operations. Bidvest Namibia
recorded a small decline in trading profit as a result of the uncertain market conditions
in the fishing operations.
Bidvest is an international service, trading and distribution business which derives
38,8% of its trading profit from outside South Africa. Accordingly, currency volatility has
an impact on reported Rand results. The average Rand exchange rate weakened against major
currencies in which the Group operates, in particular against the Australian Dollar and
Sterling. A marked weakness occurred in the last quarter, the full effects of which are
likely to be evident in 2014.
Financial overview
Revenue grew 14,9% to R153,4 billion (2012: R133,5 billion). The major growth occurred
in Bidvest Europe (R7,0 billion) and Bidvest Asia Pacific (R5,1 billion) which reflects
some organic and acquisitive growth as well as assistance from currency effects on
translation.
Gross margin declined slightly largely due to business mix however margin pressure is
evident in certain businesses. Growth in operating expenses of 12,3% was distorted by the
currency effects on translation of the foreign operations and the impact of acquisitions.
Generally costs were well controlled across the Group.
The Group grew trading profit by 9,4% to R7,7 billion (2012: R7,0 billion). Trading
margin declined slightly to 5,0% (2012: 5,3%), impacted by the relative increased
contribution from lower margin businesses such as automotive retailing and the marked
decline in trading profit in a few foreign operations.
Net finance charges declined by R20,1 million to R764,6 million, indicative of the lower
interest rate environment which was offset to some degree by the increased investment in
working capital.
Associate earnings from Group investments showed a healthy increase, buoyed by the full
year contribution from the 34,8% equity accounted interest in Mvelaserve Limited and the
much improved performance of Comair Limited.
The Groups financial position remains strong and the Group remains well-capitalised.
Net debt has increased to R4,5 billion (2012: R3,6 billion) driven principally by the
absorption of working capital. Normalised interest cover has increased to 10,0 times
(2012: 8,9 times). Bidvests attitude to gearing remains prudent whilst retaining
adequate borrowing capacity.
Cash generated by operations before working capital changes increased 5,9% to R9,3 billion
(2012: R8,7 billion). The Group absorbed R1,9 billion of working capital reflecting
growth and strategic stocking in a number of businesses. Inventories remain well controlled
and appropriately valued. Credit extension remains a critical focus area of management
across the Group. Accounts receivable have increased in line with revenue growth across the
businesses.
Fitch Ratings upgraded the Groups national long-term rating to AA(zaf) from
AA-(zaf) following the sovereign downgrade. Moodys continue to rate the Group at A1.za
with a stable outlook.
Acquisitions
In June 2013, the Competition Commission approved the takeover of Home of Living Brands
Holdings Limited (HLB) formerly Amalgamated Appliances Holdings Limited. HLB delisted from
the JSE on July 2 2013. The R532,0 million transaction will be funded out of Bidvests
internal resources. Save for accounting for the Groups share of associate earnings in 2013,
the full benefit of the acquisition will be in 2014. A number of smaller acquisitions
were also made in the year.
Prospects
Economic confidence in many of the geographies within which we operate our global
business is fragile and investors have become risk averse to emerging markets. Our
management teams the world over are being encouraged to remain focussed on delivering above
average returns for all stakeholders despite the impact of these environmental factors.
In South Africa, our operations remain positive, mindful of the fact that innovation and
continued diversification are key drivers for growth. Weakness in the Rand and the likely
spike in inflation are expected to present some cost pressures, but these pressures also
give rise to trading opportunities. Our divisional teams continue to seek out acquisitive
opportunities to complement our existing product and services offering while rigorously
pursuing real organic growth within our existing footprint.
Bidvest continues to use it's South African businesses as a base to harness product
related opportunities into Africa. Further progress in expanding our African footprint
is expected into 2014.
In the Asia Pacific region, the focus is directed to delivering innovative value adding
solutions for customers across all product categories to achieve real organic growth in
the core wholesale model. Further consolidation opportunities exist which are being
aggressively pursued. In Europe, despite the low growth environment, further opportunities
to add new product ranges and expand local footprints both via organic and acquisition growth
remain a focus area across all businesses. Management is committed to rectifying those areas
of underperformance.
Bidvest Namibia will continue to pursue strategic growth across both the commercial and
fishing businesses.
Management focus remains on product and service innovation to assist in growing revenue
on a sustainable basis, ongoing cost control, which combined with good working capital
management, will assist in generating acceptable returns on funds employed. Further effort
is being directed at those operations where performance is below our own expectations. Our
financial position remains strong and the Group has ample capacity to fund both organic and
acquisitive growth. We continue to see opportunities to expand our product and service
offering, which bodes well for the Group going forward.
Divisional review
Bidvest South Africa
The division achieved real revenue and trading profit growth in challenging market
conditions. Revenue increased 10,5% to R69,3 billion (2012: R62,7 billion). Trading profits
increased by 10,5% to R4,2 billion with good growth contributions from Bidvest Automotive
(27,6%) and Bidvest Services (28,3%).
Automotive
Excellent results were achieved with trading profit up 27,6% at R641,0 million (2012:
R502,4 million) on an 8,2% revenue increase to R20,7 billion (2012: R19,1 billion). Return
on sales rose to a healthy 3,1% from 2,6% in 2012. Overall the new vehicle market showed
continued growth, up 7,2% to 644 191 units from 600 689. Strong performances were put in by
VW, Audi, Land Rover, Nissan, Renault and UD Trucks. Multi Franchise Division performance
was below expectations. Reorganisation continued and the business exited the non-performing
Peugeot, Citroen and Volvo franchises. Toyota continued to make steady progress. Burchmores
was streamlined into a pure auctioneering business. McCarthy Auto Repair Centres gained
traction as a multi-brand repairer. Innovation continued across the division and McCarthy
launched a mobile app, a pre-owned dealer network and a new customer loyalty programme.
Migration to the Autoline dealer management system was two-thirds complete by year-end.
Electrical
Pleasing results were achieved despite a sluggish construction industry. Revenue rose
5,6% to R4,5 billion (2012: R4,3 billion). Trading profit moved 8,2% higher to R224,6
million (2012: R207,6 million). The Gauteng East and West regions were consolidated and Atlas
Cables and Voltex Lighting relocated to new premises. Voltex Lighting had a better year and
Versalec Cables put in a strong performance, particularly in the last quarter. Collections
and debtors management remained focus areas and stock management efficiencies were
achieved. Fleet upgrades are planned and Voltex is in process of opening a Soweto branch.
Financial Services
Financial Services delivered a 1,4% increase in trading profit to R594,9 million.
Bidvest Bank remained strongly cash generative in trading conditions impacted by lower
inbound and outbound travel, currency volatility and consumer down trading. Overall lending
turnover dropped as the run off of a major FML contract exceeded new replacement
business. Cash on hand rose 31% and deposits were up 19%. Advances (excluding leasing) grew
by 32%. At 2,4 times (2012: 2,5 times), financial leverage remained low. Credit quality
remained good and impairments were well managed. The asset base grew to R4,6 billion
(2012: R4,2 billion).
Bidvest Insurance delivered a pleasing result
driven by strong investment returns. Profit before tax increased 29,5%. Like for like
gross written premiums increased due to new business undertaken and penetration levels
across all categories improved, notably in the last quarter. Expenses were well controlled,
declining 2% over 2012. Extension of the short term licence will enable product development
outside of current channels. Suitable expansion opportunities are currently under
consideration, which may include acquisitions.
Freight
Revenue was up 20,5% at R25,1 billion (2012: R20,8 billion), with trading profit 6,2%
higher at R979,4 million (2012: R922,2 million). Expenses were well managed but rose 4,7%,
reflecting some one off reorganisation costs and increased property costs.
Bulk Connections had a very strong year, boosted by higher manganese volumes. The major
terminal upgrade was completed enabling the business to handle 3,9 million tons, up 18,2%.
Manica, the African general freight business, achieved a pleasing turnaround. Despite a
big dip in wheat volumes, SABT put in a strong showing with maize volumes up 9%. SACD
controlled expenses well and achieved good overall results despite lower import and export
container volumes as well as the completion of a major contract. Naval (Mozambique) performed
well in the face of disrupted rail services and some pricing pressure. Bidvest Panalpina
Logistics performance was solid, with strong contributions from Transport and Warehousing.
Exposure to the automotive market reduced margins. IVS was impacted by lower petroleum
volumes and several once-off costs. BPO experience lower volumes of steel and soya beans
through Durban however cement imports gained momentum and fertiliser volumes rose. Marine
Insurance achieved pleasing profit growth.
Industrial
Trading profit increased 5,2% to R86,0 million (2012: R81,8 million). Results improved
in the last quarter as management turnaround plans started to materialise. At R1,5 billion
revenue was up 3,7%. Despite rising costs, the 3,3% increase in operating expenses was
kept well below prevailing inflation. Materials Handling had a successful year. Inventory
levels and trading margins were well managed. Buffalo Tapes put in a satisfactory performance
and introduced a night shift to accommodate higher demand. Afcom results were
disappointing, but rebounded in the fourth quarter. Berzacks were unable to pass on rising
costs in a tough market. Vulcans bakery equipment division picked up momentum. Demand for
leisure products remained subdued, though improvement was evident by year-end at Yamaha.
Office
The division delivered pleasing results on the back of good performances by Waltons,
Cecil Nurse and Dauphin. Revenue grew 1,5% to R4,3 billion (2012: R4,2 billion) while trading
profit rose 17,8% to R324,3 million (2012: R275,2 million). Expenses were well
controlled. Konica Minolta did well to protect its margins in a competitive market but Océ
and GPT were below expectation. The furniture factories showed significant improvement,
especially the Cape Town desk factory.
Paperplus
Trading profit fell 14,3% to R281,3 million (2012: R328,1 million) while revenue rose
4,5% to R4,0 billion (2012: R3,9 billion). Expenses rose 3,4% and gross margin declined by
1,9%. General print contraction continued necessitating further rationalisation. Lithotech
exports put in a strong final quarter performance benefitting from project work.
Lithotech Afric Mail and Email Connection were combined into a new sub-division, Bidvest Data
to offer customers a multi-channel service. Packaging and labels were separated into distinct
sub-divisions to enable greater management focus. Lufil had a good year. Masterpack, a
folding carton producer, was acquired and will give critical mass to Sprint Manufacturing.
Labels disappointed, impacted by retail market contraction. Silveray Stationery Companys
sales and trading margins declined. Kolok performed strongly as management traded
aggressively in a competitive market.
Rental and Products
A pleasing performance took revenue 7,4% higher to R2,2 billion (2012: R2,1 billion)
while trading profit rose 13,6% to R435,8 million (2012: R383,8 million). Bidvest Steiner
performed strongly and debtors management showed a pleasing improvement. Laundries achieved
a good turnaround delivering much improved returns. G Fox recorded excellent results, in
particular the Swaziland factory. The African expansion is well underway. Pureau performed
well but margins are under pressure. Customers cut back on office plant contracts in
Excuflora. Corrective action at Hotel Amenities positions it for improvement in 2014. RMI
management was strengthened and Masterguard achieved good growth.
Services
The division made a strong recovery as all businesses delivered improved results.
Revenue rose 5,0% to R3,3 billion (2012: R3,1 billion). Trading profit increased by
28,3% to R276,5 million (2012: R215,4 million). Expenses were well managed across the
division.
Performance was underpinned by a successful turnaround at TMS and at Top Turf. Under-recovery
of cost increases in a price-sensitive market impacted Prestige. At Magnum, the technology
division faced challenges, but Bidtrack put in another strong performance.
Travel and Aviation
A strong overall performance drove trading profit up 19,0% to R379,9 million
(2012: R319,8 million) off a 7,9% increase in revenue of R2,2 billion
(2012: R2,1 billion). BidTravel results were above expectation despite a drop in
volumes. Total transaction values reached record levels. BidAir Group also performed
strongly, but the ramp operations faced continued challenges. Bidvest Lounges opened its
ORTIA Sky Lounge and grew passenger numbers. BidAir Cargo started an overnight service in
South Africa, and also benefitted from a new major contract.
Budget Car and Van Rental grew rental days off a high base, delivering a pleasing trading
result.
Bidvest Foodservice
Overall performance was pleasing. Trading profit rose by 12,0% to R2,5 billion
(2012: R2,2 billion). Asia Pacific maintained its growth trajectory, Europe was flat in
the face of economic headwinds and Southern Africa bounced back.
Asia Pacific
Bidvest Asia Pacific achieved revenue growth of 21,8% to R28,6 billion (2012: R23,5 billion)
as a result of organic and acquisition growth, as well as assistance from the Rand weakness
on translation. Trading profits increased by 21,1% from R1,0 billion in the previous year
to R1,2 billion in 2013.
Bidvest Australia achieved pleasing sales and trading profit growth, reflecting the
first full-year contribution of Foodlink (Logistics Perth). Results were creditable in the
context of a slowing mining resource boom, rising unemployment and zero food inflation.
Foodservice, Logistics and Fresh showed good growth. Volumes dipped at the Hospitality
division due to a strategic restructure. Expenses were well controlled. Most Foodservice
branches achieved positive results however margin squeeze did necessitate exits on certain
unprofitable national contracts. Fresh achieved a pleasing profit turnaround, highlighting
potential for promising growth in fruit and vegetable distribution. Acquisition
opportunities continued to be explored. Logistics is pursuing new contracts.
Bidvest New Zealand once again grew both revenue and trading profit. Performance was
underpinned by strong fresh produce growth and development of the meat and produce
processing business. Two new foodservice distribution centres were completed and new
premises were acquired to house the processing business. Foodservice continued to perform
despite challenging conditions. Logistics was boosted by improvements in the Christchurch
operations and a small niche retail business, Reduced To Clear, was acquired in February.
Angliss Greater China achieved satisfactory revenue and trading profit growth. Angliss
Shenzhen, Guangzhou and Beijing put in a strong sales performance as exposure to the
mainland continues to grow. New hotel and restaurant openings were positive for
PastryGlobal.
Angliss Macau was much improved, increasing its product range into seafood. Jetstar
(Tsukiji), a newly launched Japanese food provider, continues to exceed expectations.
Angliss Singapore had an expected poor year as it transitions from a commodity trading
business to a fully-fledged foodservice distributor. This necessitated a strategy of
reducing reliance on redistributors and focusing on direct sales to end customers in
foodservice and casual dining markets. Despite the benefits of improving gross margins,
increased costs to serve customers diluted returns in this rebuilding phase.
Deli Meals (Chile) achieved its first operating profit in the final quarter. Warehouse
expansion is underway. Acquisition possibilities are being explored in the region.
Bidvest Procurement Company made good progress, and is a source of competitive
procurement advantage to the total foodservice business.
Europe
Resilient performances from most operations in Europe, bolstered by acquisition growth
and Rand translation benefits, have delivered a 17,1% increase in revenue to R48,2 billion
(2012: R41,1 billion). Trading profit increased 2,6% to R936,2 million (2012: R912,7
million).
3663 Wholesale delivered a resilient performance with an increased trading profit on
higher sales volumes. Gains were achieved despite challenging trading conditions and wet
spring weather. Margins were well managed. The recently acquired South Lincs business
traded in line with expectations. Infrastructure expansion to meet customers expectations
is on track. Bidvest Logistics exceeded sales and profit targets and achieved a new volume
record, moving 57,8 million cases. An annualised hours contract was signed with drivers
at all sites enabling the business to match demand and service levels. Bidvest Fresh
(incorporating Seafood Holdings and the newly acquired fresh produce business, Oliver Kay)
grew sales and trading profit thanks to rising salmon prices and a dedicated focus on
customer requirements, and presents exciting growth prospects.
Deli XL Netherlands faced continued margin pressure in a competitive environment which
was especially evident in the institutional market. Revenue dropped slightly and costs
were impacted by the restructuring of operations and inefficiencies incurred during the
ERP implementation.
Deli XL Belgium achieved revenue growth and trading profit improved as the Langens and
Makady acquisitions helped drive sales higher in the hotel, restaurant and catering
channel.
At Bidvest Czech Republic and Slovakia both revenue and trading profit remained flat.
Bad weather and floods affected sales. Foodservice continued to show steady growth as
exposure to retail is impacted by margin pressure. Expenses were extremely well
controlled.
Sales were flat at Farutex Poland and trading profit growth was below expectation in a
challenging business climate. Key infrastructure developments were completed. Working
capital and debtors management were focus areas.
Bidvest Baltics grew sales and reduced trading losses. The chilled and ambient ranges
were expanded, growing the product offering from the original base in frozen foods and
extending into the horeca segment.
Bidvest Middle East achieved strategic expansion into Turkey with the acquisition of a
majority stake in Aktaes, a medium-size distribution business in May. UAE operations
launched a retail business and opened an new depot in Abu Dhabi. The Al Diyafa business
in Saudi Arabia performed strongly.
Southern Africa
Revenue rose 4,2%, driven by growth at Bidvest Foodservice (BFS) in the industrial
catering channel while Crown did well in the independent butchery and supermarket
channels. Bidvest Bakery Solutions (BBS) excelled off a low base in the industrial
bakery market and Bidvest Food Exports gained new business in Nigeria. Trading profit
increased by 10,1% to R340,5 million (2012: R309,3 million). Pressure on the disposable
income of consumers impacted all businesses.
Patleys sales dipped following product range rationalisations to remove low margin
lines from its basket of brands. BFS did well to maintain its margins in highly competitive
trading conditions and in the face of Rand depreciation. Expenses were well managed as a
result of multi-temp mergers in BFS and the integration of the NCP Yeast business into BBS
and Patleys. The NCP Durban plant was closed. Crowns new Innovation, Design and Technology
Centre was successfully launched, and investment into infrastructure continued.
The South African business thrived under new leadership and direction.
Namibia
Bidvest Namibia recorded weaker results as challenges at the fishing and distribution
businesses impacted profitability. Revenue rose to R3,6 billion (2012: R3,0 billion).
Trading profit, however, fell by 7,1% to R592,2 million (2012: R637,7 million). Fishing
performance was impacted by lower direct quota allocations, higher quota purchase costs,
competition from new international operators and a poor result at the Angolan operation,
Pesca Fresca Limitada. Exchange rate weakness versus the US dollar was beneficial. The
UFE canning factory returned to profit. Expansion into the white fish market is being
considered. Results at the commercial businesses were below expectation, except for
Waltons, which successfully implemented a turnaround strategy. Rennies Travel, Minolco
and Waltons plan to increase their northern Namibia footprint.
Corporate
Bidvest Properties continued with its strategy of developing in-house properties for
Group requirements. Losses continued at Ontime Automotive, the UK parking and vehicle
services business. Early in the new period Ontime Automotive bulked up its rescue and
recovery operations by completing the £5 million acquisition of the Midlands-based
Mansfield Group.
Directorate
Fred Barnes, Lionel Jacobs, Joseph Pamensky and Alan Salomon did not offer themselves
for re-election as directors of Bidvest at the AGM held on November 26 2012. Peter Nyman
retired from the board and Muriel Dube and Rachel Kunene 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.
Change of Chairperson
Cyril Ramaphosa notified the board in March 2013 that he would retire from the position
of Chairman of Bidvest however would remain on the board until early September. The board
extends it sincere thanks and gratitude to Mr Ramaphosa for his leadership over the past
nine years.
Lorato Phalatse, an independent non-executive director was appointed to succeed Cyril
Ramaphosa as the new Chairperson.
CWL Phalatse B Joffe
Chairperson Chief Executive
Dividend declaration
The directors have declared a final gross cash dividend of 396,0 cents (336,6 cents net of
dividend withholding tax, where applicable) per ordinary share for the year ended June 30
2013 to those members registered on the record date.
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 396,0 cents
Net dividend amount per share 336,6 cents
Issued shares as at declaration date 327 734 929
Declaration date Monday, August 26 2013
Last day to trade cum dividend Friday, September 13 2013
Trading ex-distribution commences Monday, September 16 2013
Record date Friday, September 20 2013
Payment date Monday, September 23 2013
Share certificates may not be dematerialised or rematerialised between Monday,
September 16 2013 and Friday, September 20 2013, both dates inclusive.
For and on behalf of the board.
CA Brighten
Company secretary
Johannesburg
August 26 2013
Basis of presentation of financial statements
for the year ended June 30 2013
These summarised preliminary financial statements have been prepared in accordance with the framework concepts and
the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA
Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements
as issued by 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, with
the exception of the adoption of the amendments to IAS 1 which requires the Group to present items in the
statement of other comprehensive income based on whether they may be reclassified to profit or loss in the future.
During the year, certain operations were reclassified between segments. The comparative years segmental information
has been re-presented to reflect these insignificant changes.
Audit report
The auditors, Deloitte & Touche, have issued their opinion on the Groups financial statements for the year ended
June 30 2013. The audit was conducted in accordance with International Standards on Auditing. They have issued an
unmodified opinion. A copy of the auditors report together with a copy of the audited financial statements are
available for inspection at the Companys registered office. These summarised preliminary financial statements
have been derived from the Groups financial statements and are consistent in all material respects with the Groups
financial statements. These summarised preliminary financial statements have been audited by the Companys auditors
who have issued an unmodified opinion. The auditors report does not necessarily report on all of the information
contained in this announcement. Any reference to future financial information included in this announcement has not
been reviewed or reported on by the auditors. Shareholders are advised, that in order to obtain a full understanding
of the nature of the auditors engagement they should obtain a copy of that report together with the accompanying
financial information from the Companys registered office.
Subsequent event
Other than the acquisition of HLB no significant events have occurred subsequent to the year end and the date of
this report.
Preparer of the financial statements
These summarised preliminary financial statements and the Groups financial statements have been prepared under the
supervision of the Group financial manager, NEJ Goodwin CA(SA).
Exchange rates
The following exchange rates were used in the conversion of foreign interests and foreign transactions during the
periods:
2013 2012
Rand/Sterling
Closing rate 15,05 12,94
Average rate 13,87 12,34
Rand/Euro
Closing rate 13,13 10,46
Average rate 11,46 10,41
Rand/Australian Dollar
Closing rate 9,05 8,42
Average rate 9,08 8,03
Supplementary pro formas information regarding the currency effects of the translation of foreign operations on the Group
The pro forma financial information has been compiled for illustrative purposes only 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. An unmodified reasonable assurance report has been issued by the
Companys auditors, Deloitte & Touche, in terms of ISAE 3420: Assurance Engagements to Report on the Compilation
of Pro Forma Information in a Prospectus, and is available for inspection at the Companys registered office. The
pro forma information has been compiled in terms of the JSE Listings Requirements and the Revised Guide on Pro Forma
Information by SAICA.
The average Rand exchange rate weakened against the major currencies in which the Groups foreign operations trade,
namely Sterling (12,34 in 2012 to 13,87 in 2013), the Euro (10,41 in 2012 to 11,46 in 2013) and the Australian Dollar
(8,03 in 2012 to 9,08 in 2013). The illustrative information, detailed below, has been prepared on the basis of applying
the 2012 average Rand exchange rates to the 2013 foreign subsidiary income statements and recalculating the reported
income of the Group for the year.
Illustrative 2013 at 2012
For the year ended June 30 average exchange rates
Actual Percentage Actual Recalculated Percentage
2013 change 2012 2013 change
Revenue (Rm) 153 404,5 14,9 133 533,6 145 176,4 8,7
Trading profit (Rm) 7 675,2 9,4 7 014,2 7 447,0 6,2
Normalised headline earnings (Rm) 4 878,0 16,2 4 196,6 4 727,6 12,7
HEPS (cps) 1 560,6 5,9 1 474,2 1 512,5 2,6
Normalised HEPS (cps) 1 560,6 15,4 1 352,3 1 512,5 11,8
Administration
Directors
Chairman: CWL Phalatse
Independent non-executive: PC Baloyi, DDB Band, AA Da Costa (alternate LJ Mokoena), EK Diack, S Koseff, AK Maditsi, D Masson,
NG Payne, T Slabbert, Adv FDP Tlakula
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
Sponsor
Investec Securities Limited
100 Grayston Drive, Sandown
Sandton, South Africa, 2196
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
Date: 26/08/2013 07:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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