Wrap Text
Audited provisional results for the year ended June 30 2015
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
Audited provisional results for the year ended June 30 2015
+ 11,6%
Turnover increased to R204,9 billion (2014: R183,6 billion)
+ 11,7%
Trading result rose to R9,5 billion (2014: R8,5 billion)
+ 8,6%
HEPS increased to 1 882,2 cents (2014: 1 733,9 cents)
+ 9,0%
Distribution per share rose to 909,0 cents (2014: 834,1 cents)
+ 12,3%
Net asset value per share up to 11 190 cents (2014: 9 965 cents)
“We strive to turn ordinary companies into extraordinary performers, delivering strong and consistent shareholder
returns in the process. We understand that people create wealth and that companies only report it…”
Brian Joffe Group chief executive
Commentary
Highlights
The Group delivered very credible trading results for the year ended June 30 2015, in challenging market conditions.
Headline earnings per share (HEPS) increased by 8,6% to 1 882,2 cents per share (2014: 1 733,9 cents per share) with
basic earnings per share (EPS) increasing by 25,0% to 1 827,3 cents per share (2014: 1 462,0 cents per share).
Excellent trading results in Bidvest Foodservice reflect pleasing performances in most businesses, delivering real
organic growth in local currencies. The acquisitions of PCL 24/7 Transport Limited (PCL) and Gruppo DAC S.p.A. (DAC) have
expanded the breadth and geographical reach of the UK and European operations.
Bidvest South Africa delivered satisfactory trading results despite tough economic conditions, a feature of the
environment of the past financial year. Good performances were achieved in Electrical, Industrial, Paperplus, Services and
Rental and Products divisions. Bidvest Namibia recorded a further decline in trading profit as the lower fishing and food
distribution performances outweighed the improved results of the Industrial and Commercial businesses.
Financial overview
Turnover grew by 11,6% to R204,9 billion (2014: R183,6 billion). Major contributors to the increases were Bidvest
Europe and Bidvest UK, reflecting organic growth, some assistance from currency effects on translation and acquisitions.
Gross profit percentage increased to 20,8% (2014: 20,3%). Operating expenses remained well controlled, increasing by
6,2% (in rands) on a like-for-like basis excluding the effects of foreign currency translation and the impact of the DAC
and PCL acquisitions.
Investment income declined significantly due to reduced fair value and mark-to-market gains on the investment
portfolios, the impact of which equates to 3,4% of HEPS.
The Group grew the trading result by 11,7% to R9,6 billion (2014: R8,5 billion). Trading result margin was maintained at
4,7%. The average rand exchange rate weakened against the sterling, however, appreciated against the euro, resulting in
a 0,8% overall benefit to trading profit.
Share-based payment costs rose to R228,6 million (2014: R187,1 million), reflecting the new allocation of long-term
incentives to staff at a higher share price. Acquisition costs were R74,3 million (2014: R74,0 million).
Net finance charges were 6,8% higher at R1,1 billion (2014: R1,0 billion), principally a function of financing
acquisitions which were not fully included or included at all in the prior year i.e. Mvelaserve Limited (Mvelaserve), PCL, DAC
and Adcock Ingram Holdings Limited (Adcock) being the material new investments. Net finance costs were further impacted
by utilisation of working capital through the year and a rising interest rate environment in South Africa.
Associate earnings are significantly higher as a result of the full year inclusion of Adcock, which became an
associate in March 2014. Despite this full year contribution to associate earnings, the impact of the acquisition of Adcock has
been a negative 2,7% on HEPS.
Headline earnings increased by 11,3% to R6,1 billion with profit for the year up 27,3% to R6,2 billion. Net headline
earnings adjustments in the year totalled R177,2 million comprising primarily a R305,0 million fair value impairment of
the investment in associates offset by profit on the disposal of property, plant and equipment of R151,4 million.
The Group’s financial position remains robust. Growth in total assets reflects the impacts of recent acquisitions on
goodwill and intangibles, normal levels of capital expenditure on property, plant and equipment and the trading activity
in inventories and receivables. Net debt has declined to R7,8 billion as compared to R7,9 billion at June 30 2014
despite the outlay of funds for DAC, PCL and other acquisitions (R3,0 billion). Trading profit interest cover (excluding
the finance costs of the Adcock investment) is 11,3 times (2014: 9,4 times) and is comfortably above the Group’s
conservative self-imposed targets. Bidvest’s attitude to gearing remains prudent while retaining adequate headroom to
accommodate expansion opportunities.
Cash generated by operations before working capital changes increased 9,2% to R11,7 billion (2014: R10,7 billion). The
Group absorbed R0,1 billion of working capital in 2015 compared to R0,5 billion in 2014, reflecting a strong focus on
the management thereof despite growth, the impact of the devaluation of the rand on replacement inventories and
acquisitions. Net working capital days decreased to 10,0 days (2014: 10,8 days).
Moody’s Investor Service affirmed Bidvest’s national long-term rating of A1.za with a stable outlook in November 2014.
In January 2015, Fitch Ratings affirmed the Group’s national long-term rating at AA(zaf) with a stable outlook.
Acquisitions
With effect from July 1 2014, the Group acquired a 60% interest in DAC, a leading Italian foodservice provider, as
well as a 75% stake in PCL, a specialist chilled products storage and distribution business operating in the UK.
The aggregate purchase consideration was approximately R1,7 billion (£95 million). During the latter part of the year,
the Group acquired the remaining part of PCL for a consideration of £15 million. The Group has the option to increase
its interest in DAC over time. These acquisitions form part of the Group’s strategic expansion plans in the international
foodservice industry.
The Group also made a number of smaller acquisitions. Disposals included the sale of Protea Coin’s Cash-In-Transit
(CIT)business and Océ.
Subsequent events
The Group acquired Plumblink SA Proprietary Limited (Plumblink) with effect from July 1 2015 for an enterprise value
of R446 million. Plumblink is a specialist plumbing and bathroom merchant currently operating from 61 branches
strategically situated throughout South Africa.
The Group acquired a further 2,6 million Adcock ordinary shares from Adcock’s black economic empowerment partners for
a cash consideration of R52,00 per Adcock ordinary share. The Group also supported the new Adcock BEE scheme and sold
15% of its Adcock shareholding in accordance with the terms of the scheme. Following these transactions, the Group holds
37,7% of the net ordinary shares in issue in Adcock.
Prospects
Bidvest is confident that its entrepreneurial and decentralised business model is well placed to exploit opportunities
in the volatile and somewhat unpredictable economic conditions being experienced in many of our operating geographies.
This model breeds accountability and confidence which allows management to innovate to ensure our relevance and value to
our customers.
Trading conditions in South Africa are likely to remain tough in a low-growth environment but management see
opportunity in the current market volatility. Certain divisions are being realigned to cater for succession, and to streamline
our service offering to customers. Management will continue to focus on delivering real organic growth and unlocking
synergies to realise improved returns on recent investments. Our focus on expanding our exposure to Africa remains, however,
as progress has been slow, alternative strategies to speed up penetration are being explored. The recent acquisition of
Plumblink will strengthen our Industrial products base. Opportunities to complement our existing product and service
offering, as well as to broaden our exposure to the distribution of branded FMCG products, will continue to be pursued.
In the Food division, the focus of our wholesale segments remains on balancing the exposure between national and
independent foodservice customers. Growing the national footprint of the fresh food offering in most regions continues.
Innovative technological value-adding foodservice solutions for customers continue to be rolled out across all businesses.
The acquisitions of DAC and PCL have been well integrated and present excellent platforms for further areas of geographic
and service offering expansion. Our exposure to developing markets particularly Latin America and China, despite
economic headwinds, presents exciting opportunities to sustain further growth. Across all our businesses, opportunities exist
to add new product ranges and expand local footprints, via both organic and acquisitive growth.
Significant effort has been undertaken by Adcock management to reorganise and restructure the business. These
corrective measures and actions have put Adcock on the path to improved profitability, which is borne out in their recent
performance. Bidvest remains optimistic about the medium-term prospects, however, further work is still required for Adcock to
reach its potential.
Management remains focused on maximising returns in all our businesses. Our financial position remains sound, cash
generation remains strong and we retain adequate headroom to accommodate expansion opportunities, both acquisitive and
organic. Despite market volatility, the outlook for the Group is positive, underpinned by anticipated real organic growth
and bolstered by the anticipated benefits arising from the recent acquisitions and investments. Bidvest’s teams remain
alert to opportunities and all employees remain motivated to ensure Bidvest delivers ‘Proudly Tomorrow’.
Divisional review
Bidvest South Africa
Results were generally satisfactory in difficult trading conditions, with turnover 9,2% higher at R87,4 billion (2014:
R80,0 billion).
Trading profit rose 4,0% to R5,1 billion (2014: R4,9 billion).
Plummeting commodity markets created challenges for Freight while other operations faced low business and consumer
confidence, with sectors such as mining, manufacturing and construction under particular pressure.
Within this challenging context, several teams delivered impressive market share gains and solid growth. Innovation
continues.
Automotive
Despite a difficult environment, trading profit rose 1,5% to R627,1 million (2014: R618,0 million) while turnover
moved
3,6% higher to R22,7 billion (2014: R21,9 billion). Results reflect a lower vehicle finance contribution. Margin
pressure increased and the return on sales was flat at 2,7% (2014: 2,8%). New vehicle price increases impacted affordability
and new vehicle sales fell to 37 840 units (2014: 41 329). Pre-owned vehicle sales were down 1,8% to 41 043 units (2014:
41 802), though this market ticked higher in the final quarter. Parts revenue rose and service volumes increased.
Improved after-sales performance was supported by strict expense management. Among the dealerships Mercedes Benz, Chrysler,
Jeep, Dodge and Mitsubishi performed strongly and Land Rover, Jaguar, Audi and Toyota put in a solid performance. New
management at Ford drove a strong turnaround. The Call-a-Car website was enhanced and relaunched.
Consumer Products
Turnover dipped to R1,2 billion (2014: R1,3 billion) as consumer demand remained under pressure. Trading profit fell
to R78,9 million (2014: R102,1 million). The rand’s slide and pressure from branded competitors and private labels
impacted margins. Hoover’s relaunch pushed up sales and Pineware promotions worked well. The National Service division
performed ahead of expectations and logistics achieved exceptional on-time deliveries. Marketing cost efficiencies were secured
without compromising the brand strategy. Exports faced strong second-half headwinds.
Electrical
Turnover rose 9,4% to R5,3 billion (2014: R4,8 billion). The division performed strongly despite depressed conditions
across many customer groups. Trading profit rose to R305,1 million (2014: R264,3 million). Margin management was good,
returns increased and stock days fell by 9,3%. Sales and gross profits rose at Voltex and Versalec Cables. Low copper
prices and cable industry over-supply were well managed. Pleasing performances were seen at Solid State, Cabstrut, Waco,
Versalec and the regions. The RAD Phambile acquisition bedded in well. The lighting business is being restructured.
Financial Services
Overall turnover increased by 22,3% to R2,0 billion (2014: R1,7 billion) while trading profit declined by 14,4% to
R527,6 million (2014: R616,7 million). The Bank remained strongly cash generative and cash balances rose 9,1% to R2,7
billion. Deposits rose strongly and leased assets moved 86,1% higher to R1,9 billion on the back of new contracts. Moody’s
published an unchanged credit rating of A3/P2 with a stable outlook. Insurance results were impacted by less positive than
last year mark-to-market movements on the equity portfolio. Pre-tax profit reflects a 60,8% fall in investment income.
Results reflect the contribution of the acquired Compendium Insurance Group. Gross written premiums rose 9,1% to R362,0
million as the rollout of new products gained traction.
Freight
Falling exports and imports impacted the division, which grew turnover by 8,4% to R29,1 billion (2014: R26,8 billion),
though trading profit dipped 4,9% to R1,1 billion (2014: R1,1 billion). Volumes through Durban harbour dropped sharply.
Bidvest Tank Terminals (previously Island View Storage) performed well after investment in more bulk liquids capacity.
South African Bulk Terminals did well on exceptional first-half volumes, but was impacted by a major second-half
slowdown. Bidvest Panalpina Logistics faced challenges on low import/export volumes, but optimised automotive sector
opportunities. Results at Port Operations were affected by poor steel and container volumes and completion of the wind turbine
import programme. Container activities faced continued pressure. Poor demand for coal and manganese was negative for Bulk
Connections. Loss of iron ore and magnetite business severely affected Naval. Manica showed a loss and is receiving
management’s attention.
Industrial
A good set of results saw trading profit rise 30,7% to R164,3 million (2014: R125,7 million) while turnover increased
10,5% to R2,2 billion (2014: R2,0 billion). Cash generated from operations reached R194,8 million (2014: R60,7 million).
Returns continued to improve. Academy Brushware, Berzacks, Bidvest Materials Handling, Buffalo Tapes, Vulcan Catering
and Yamaha all registered significant profit growth. Vulcan and Afcom recovered well from national strike action. Further
divisional growth is projected, supported by Plumblink’s imminent integration.
Office
Results varied across operations. Turnover rose 8,5% to R5,1 billion (2014: R4,7 billion), but trading profit
increased slightly by 3,1% to R377,0 million (2014: R365,5 million). Expenses were carefully managed. Technology did well, with
Konica Minolta in the forefront. Furniture had a tough year, especially in the chair segment, though desk factory
performance improved. Ditulo and Cecil Nurse returned pleasing results. Waltons’ results were disappointing, and restructuring
is being implemented. Zonke continues to perform well. Overall results reflect a four-month contribution from a recent
Botswana acquisition.
Paperplus
Turnover rose 16,9% to R5,7 billion (2014: R4,9 billion) with trading profit up 23,6% at R390,2 million (2014: R315,6 million).
Expenses increased just 3,5%, including Bidvest Digital start-up costs. This newcomer successfully entered the
wide format printing market. The strong contribution of Tanzanian voter registration work offset the negative impacts
of the postal strike on Bidvest Data. Exports boosted Lithotech results. Stamford Sales was integrated into Packaging.
Rotolabel showed improvement but Kolok and Silveray had a difficult year.
Rental and Products
Trading profit moved 12,2% higher to R535,9 million (2014: R477,6 million) with turnover up 6,7% at R2,5 billion
(2014: R2,4 billion). Steiner had an exceptional year. Pest services showed sustained growth. Laundry group
performed admirably. Bidserv Industrial grew sales and the Cape Town branch benefited from the Alsafe
acquisition. Puréau performed well despite a major account loss. Execuflora ended the year strongly and Silk By Design did
well again. Hotel Amenities performed strongly, assisted by the Luxury Guest acquisition. Master Guard secured new
business and did well. G.Fox and Steripic disappointed.
Services
Turnover rose 23,5% to R9,0 billion (2014: R7,2 billion) as the division achieved a pleasing overall result. Trading
profit was up 20,7% at R636,9 million (2014: R527,5 million). Cash generation was strong. The annualised effect of the
integration of Mvelaserve operations was beneficial. Margins were under pressure. The CIT business was sold and a small
landscaping operation acquired. Prestige and Landscaping grew despite contract losses. The security cluster faced a tough
trading environment. Catering firm RoyalMnandi was under pressure but new business looks promising. Pie-maker Khuseti
was boosted by exports and retail. SA Water achieved a pleasing turnaround but Velocity road repairs was challenged by
slow municipal approvals.
Travel and Aviation
Turnover of R2,7 billion (2014: R2,4 billion) was up 12,2% while trading profit rose 5,3% to R443,7 million (2014:
R421,4 million). Results overall disappointed. Travel volumes fell and car rental volumes were initially impacted by the
change from Budget to Bidvest Car Rental. BidAir returned pleasing results. Ground handling won significant new contracts
while maintaining world-class standards. BidAir Cargo achieved strategic growth, complementing day-time with night-time
services after successfully concluding the Imperial Air Cargo acquisition. Bidvest Premier Lounges attracted growing
volumes, topping the one million passenger per annum milestone. Newly acquired BushBreaks boosted the leisure offering.
Namibia
Bidvest Namibia experienced a 2,6% increase in turnover to R4,1 billion (2014: R4,0 billion). Trading profit decreased
18,9% to R400,2 million (2014: R493,7 million). Bidfish contributed 82% of profit, though operations were severely
affected by further fishing quota reductions. The Carapau joint venture was launched to accommodate fishing industry
entrants. Angolan operations showed improvement. Bidcom businesses had mixed fortunes. Freight and Logistics was impacted by
lower project volumes but innovated strongly. Food and Distribution disappointed, impacted by reduced poultry volumes.
Commercial and Industrial Services secured a measure of growth and has, post year-end, acquired an established motor
dealership business.
Bidvest Food Group
Food Group performed strongly in a watershed year as strategies put in place in recent years developed critical mass.
Europe, bolstered by recent acquisitions, achieved strong growth, as did the UK. Australasia made another solid
contribution and Emerging Markets grew profits in the face of economic difficulties.
Food turnover rose by 14,0% to R116,6 billion (2014: R102,3 billion) with trading profit 25,1% higher at R4,0 billion
(2014: R3,2 billion).
Growing attention is given to global synergies, enabled by our Asian and new "Made in Italy" procurement capabilities.
Australasia
The region again made a substantial contribution and remains the biggest profit generator in the Food Group. Turnover
moved 5,9% higher to R28,2 billion (2014: R26,6 billion). Trading profit rose 13,3% to R1,4 billion (2014: R1,3 billion).
Bidvest Australia put in a strong finish to the year and achieved a pleasing rise in profits off subdued sales growth.
The team exited several large low-margin logistics contracts as the process of rebalancing the portfolio gained
traction. The business is transitioning to a free trade better margin business and new market segments such as fresh produce
and fresh meat. Focused attention is given to growing the base of customers with trading opportunities. Expenses and
margins were well controlled. Foodservice again made a good contribution. Most business units improved their profits.
Hospitality had a flat year and, early in the new year, was sold. Fresh achieved strong gains on organic and acquisitive
growth. The Meat business is moving toward direct supplies to customers. Several operations have already adopted this model.
Logistics moved back into profit on lower volumes and better expense management.
Bidvest New Zealand performed strongly, driven by sustained innovation. Pleasing sales and profit growth were
achieved. Infrastructure investment was maintained and working capital well managed. The core Foodservice business returned
excellent results and made continued productivity improvements. Fresh maintained its record of improving its results every
year. Processing made significant improvement and moved into profit. Logistics grew sales and storage income, but profit
fell on increased capacity. Retail performance was disappointing, though substantial final quarter improvements were
evident.
UK
UK businesses performed strongly. Turnover rose 17,4% to R47,7 billion (2014: R40,6 billion) while trading profit
increased by 41,8% to R1,1 billion (2014: R0,8 billion). Sales growth was seen across all parts of the business.
Bidvest Foodservice (previously Bidvest 3663) ended the year on a high. Management focused on building free trade
volumes, reducing complexity and cutting costs. Margins were well controlled and cash flows improved. Catering Equipment and
Swithenbanks Fresh & Fine Foods achieved profits above budget. Work began on the infrastructure programme in the south
of England. IT infrastructure is being modernised and simplified.
Bidvest Logistics gained scale following the acquisition of PCL, a distribution and chilled products storage business,
and is now a sizeable player in food logistics. Volumes grew, though margins per case came under pressure. Efficiencies
and volume synergy were focus areas.
Bidvest Fresh returned pleasing results on continued independent sector growth. Seafood and Produce performed well.
Newly acquired Hensons, a London-based meat business, performed ahead of expectations. Integration of Swithenbanks is a
priority going forward.
Europe
The region performed strongly, particularly some eastern Europe jurisdictions. Turnover rose 18,9% to R24,8 billion
(2014: R20,9 billion) while trading profit rose 57,0% to R806,2 million (2014: R513,6 million).
Bidvest Deli XL Netherlands was impacted again by a significant fall in institutional business. Sales overall were
flat as hospitality, national accounts and catering grew at a fast rate. An acceptable trading profit was achieved.
Bidvest Belgium faced challenges as sales dipped while margins remained under pressure, especially in the highly
competitive institutional market. Expenses were well controlled, however, profitability fell slightly.
Bidvest Czech Republic and Slovakia enjoyed their best ever year. All aspects of the business made a contribution.
Foodservice sales increased across all sectors while Retail volumes strengthened considerably.
Farutex Poland put in an impressive performance. Sales were up, margins well managed and overheads stringently
controlled. Contract extensions by several national customers were beneficial. Investment in plant and equipment continued.
Bidvest Baltics achieved significant Foodservice sales gains in all markets: Lithuania, Latvia and Estonia. Latvian
operations moved into a new depot and opened a fish processing plant.
DAC (acquisition effective July 2014) performed strongly. Buoyant sales of ambient and frozen products were driven by
strong growth of the street market. Robust cash flows were maintained. A new depot in Rome was opened in June 2015.
Bidvest Spain made a small loss, though volumes rose, driven by new account gains and market inroads by a wider
product range. New warehouses opened in Cartagena and Mallorca.
Emerging Markets
These businesses achieved a commendable result as many markets faced economic headwinds. Turnover moved 12,3% higher
to R15,9 billion (2014: R14,1 billion), with trading profit up 2,9% at R655,0 million (2014: R636,7 million).
Southern Africa operations at Bidvest Food Africa performed relatively well, with a strong contribution from
Foodservice as implementation of the multi-temp strategy delivered ongoing customer service and efficiency benefits. Continued
e-commerce growth was achieved, with 26% of Foodservice turnover now in this channel. Crown’s move into dairy products
generated continued gains and general food volumes grew. New ingredient categories were introduced and Bakery Solutions
launched the NCP range of pre-mixes. Crown expanded its network of cash-and-carry premises.
Angliss Greater China achieved good growth, driven by product and market innovation. Sales in the mainland cities of
Shanghai, Beijing, Guangzhou and Shenzhen exceeded expectations. Growth continued in the second-tier cities of Changsha,
Xian, Sanya and Wuhan. Hong Kong was impacted by falling tourist numbers, though gourmet lines did well.
Angliss Singapore grew profit, but sales fell as planned downsizing continued and the transition to a foodservice
model gained further traction. The local wholesale trading operation closed in May.
Bidvest Chile did well in a slowing economy. Foodservice and Bakery made pleasing contributions. Foodservice was
driven by new product introductions, wider market coverage and customer service focus. Bakery is well positioned following
restructuring. Work began on a new Santiago distribution centre for the core foodservice business.
Bidvest Brazil faced challenges and margin pressure as the national economy stalled. Sales were well below
expectation. The sales regionalisation programme made further progress.
Bidvest Middle East built momentum and performed well in the final quarter. HORECA UAE grew sales and core brands did
well. Al Diyafa, our Saudi joint venture won important new accounts. Aktaes Turkey faced challenges, while businesses in
Bahrain and Lebanon continue to expand.
Bidvest Procurement Company made strong progress. Sales and the number of certified suppliers rose. Product ranges
were further extended.
Corporate and Investments
Bidvest Properties continued to develop its portfolio while assisting Bidvest operations to expand their
infrastructure. Its investment in 2015 topped R280 million. The Mansfield Group continues to win new business, but margins remain
under pressure. Luxury car deliveries by Ontime Automotive were impacted by increased BMW volumes.
In February 2015, the Group made an offer to the shareholders of Adcock to acquire 100% of the shares in Adcock at a
price of R52 per share. As a result of this offer and the acquisition of shares in the market, the Group acquired a
further 8,4% of the net issued capital in Adcock for a consideration of R737 million.
Directorate
At the annual general meeting (AGM), Adv FDP Tlakula retired from the board. The board and management of Bidvest wish
to thank Adv Tlakula for her contribution to the development of Bidvest. Mrs GC McMahon was appointed as an executive
director with effect from May 27 2015.
CWL Phalatse B Joffe
Chairman Chief executive
Dividend declaration
In line with the Group dividend policy, the directors have declared a final gross cash dividend of 483,0 cents
(410,55 cents net of dividend withholding tax, where applicable) per ordinary share for the year ended June 30 2015 to those
members registered on the record date, being Friday, September 25 2015.
The dividend has been declared from income reserves. 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 amount per share: 483,0 cents
Net dividend amount per share: 410,55 cents
Issued shares at declaration date: 335 163 151
Declaration date: Monday, August 31 2015
Last day to trade cum dividend: Thursday, September 17 2015
First day to trade ex dividend: Friday, September 18 2015
Record date: Friday, September 25 2015
Payment date: Monday, September 28 2015
Share certificates may not be dematerialised or rematerialised between Friday, September 18 2015 and Friday, September 25 2015,
both days inclusive.
For and on behalf of the board
CA Brighten - Company Secretary
Johannesburg
August 31 2015
Summarised consolidated income statement
for the year ended June 30 2015 Audited 2014 Audited %
R’000 R’000 change
Turnover 204 915 925 183 645 179 11,6
Revenue 182 164 453 161 612 418 12,7
Cost of revenue (139 566 689) (124 247 763)
Gross income 42 597 764 37 364 655 14,0
Operating expenses (33 453 768) (29 276 028) 14,3
Sales and distribution costs (23 129 638) (19 324 756)
Administration expenses (6 783 084) (6 674 996)
Other costs (3 541 046) (3 276 276)
Other income 382 023 437 978
Trading result 9 526 019 8 526 605 11,7
Income from investments 146 836 418 916
Trading profit 9 672 855 8 945 521 8,1
Share-based payment expense (228 637) (187 119)
Acquisition costs (74 241) (74 044)
Net capital items (32 574) (802 373)
Operating profit 9 337 403 7 881 985 18,5
Net finance charges (1 120 058) (1 048 295) 6,8
Finance income 112 918 90 232
Finance charges (1 232 976) (1 138 527)
Share of profit of associates 218 069 110 142 98,0
Dividends received 85 366 76 788
Share of current year earnings 132 703 33 354
Profit before taxation 8 435 414 6 943 832 21,5
Taxation (2 276 038) (2 107 173)
Profit for the year 6 159 376 4 836 659 27,3
Attributable to:
Shareholders of the Company 5 898 406 4 603 307 28,1
Non-controlling interest 260 970 233 352
6 159 376 4 836 659 27,3
Shares in issue
Total 325 052 318 916
Weighted (‘000) 322 792 314 873
Diluted weighted (‘000) 324 606 316 859
Basic earnings per share (cents) 1 827,3 1 462,0 25,0
Diluted basic earnings per share (cents) 1 817,1 1 452,8 25,1
Headline earnings per share (cents) 1 882,2 1 733,9 8,6
Diluted headline earnings per share (cents) 1 871,7 1 723,0 8,6
Dividends per share (cents) 909,0 834,1 9,0
Interim 426,0 398,1
Final 483,0 436,0
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 5 898 406 4 603 307 28,1
Impairment of property, plant and equipment, goodwill and intangible assets 94 792 18 731
Property, plant and equipment 11 740 1 964
Intangible assets 113 137 20 961
Tax relief (30 085) (4 194)
Net loss (profit) on disposal of interests in subsidiaries and disposal
and closure of businesses (52 855) 70
Loss (profit) on disposal and closure (95 338) 70
Tax charge 42 483 -
Net loss on disposal, impairment and reversal of impairment of investments in associates 254 493 906 542
Impairment of investments in associate 305 047 1 056 060
Reversal of impairment of investments in associate - (130 000)
Net profit on change in shareholding in associates (59 284) (47 560)
Tax charge 8 730 28 042
Net profit on disposal of property, plant and equipment (151 411) (3 136)
Property, plant and equipment (242 728) (1 888)
Intangible assets - (1 967)
Tax charge 36 484 244
Non-controlling interest 54 833 475
Gain on a bargain purchase - (24 338)
Net fair value adjustment arising on acquisition of control of associates - (70 929)
Non-headline items included in equity accounted earnings of associate companies 32 217 29 303
Headline earnings 6 075 642 5 459 550 11,3
Summarised consolidated statement of other comprehensive income
for the year ended June 30 2015 Audited 2014 Audited
R’000 R’000
Profit for the year 6 159 376 4 836 659
Other comprehensive income (63 099) 2 016 644
Items that may be reclassified subsequently to profit or loss (96 252) 2 097 535
Foreign currency translation reserve
Exchange differences arising during the year (114 732) 2 116 666
Realisation of reserve on disposal of subsidiaries and associates (1 687) (2 223)
Available-for-sale financial assets
Net fair value profit (loss) on on available-for-sale financial assets 29 456 (3 368)
Cash flow hedges
Net fair value loss arising during the year (6 026) (16 572)
Taxation effects
Tax relief for the year (3 263) 3 032
Items that will not be reclassified subsequently to profit or loss 33 153 (80 891)
Defined benefit obligations
Net remeasurement of defined benefit obligations during the year 44 096 (105 539)
Taxation effects
Tax (charge) relief for the year (10 943) 24 648
Total comprehensive income for the year 6 096 277 6 853 303
Attributable to
Shareholders of the Company 5 814 601 6 614 085
Non-controlling interest 281 676 239 218
6 096 277 6 853 303
Summarised segmental analysis
for the year ended June 30 2015 Audited 2014 Audited %
R’000 R’000 change
TURNOVER
Bidvest South Africa 87 390 800 80 038 732 9,2
Automotive 22 676 120 21 894 262 3,6
Consumer Products 1 171 380 1 267 245 (7,6)
Electrical 5 256 267 4 804 896 9,4
Financial Services 2 035 048 1 664 307 22,3
Freight 29 058 663 26 808 565 8,4
Industrial 2 210 170 1 999 884 10,5
Office 5 103 866 4 705 029 8,5
Paperplus 5 707 922 4 881 646 16,9
Rental and Products 2 508 206 2 350 087 6,7
Services 8 954 475 7 248 191 23,5
Travel and Aviation 2 708 683 2 414 620 12,2
Bidvest Foodservice 116 588 849 102 261 128 14,0
Australasia 28 187 109 26 622 058 5,9
United Kingdom 47 722 732 40 644 615 17,4
Europe 24 802 908 20 860 766 18,9
Emerging Markets 15 876 100 14 133 689 12,3
Bidvest Namibia 4 085 868 3 980 883 2,6
Bidvest Corporate 1 603 870 1 495 083 7,3
Properties 425 331 388 123 9,6
Corporate and Investments 1 178 539 1 106 960 6,5
209 669 387 187 775 826 11,7
Inter Group eliminations (4 753 462) (4 130 647)
204 915 925 183 645 179 11,6
TRADING PROFIT
Bidvest South Africa 5 146 464 4 948 153 4,0
Automotive 627 087 618 001 1,5
Consumer Products 78 930 102 073 (22,7)
Electrical 305 080 264 263 15,4
Financial Services 527 576 616 661 (14,4)
Freight 1 059 728 1 113 896 (4,9)
Industrial 164 250 125 663 30,7
Office 377 019 365 519 3,1
Paperplus 390 222 315 590 23,6
Rental and Products 535 935 477 608 12,2
Services 636 865 527 511 20,7
Travel and Aviation 443 772 421 368 5,3
Bidvest Foodservice 3 986 144 3 185 767 25,1
Australasia 1 437 078 1 268 419 13,3
United Kingdom 1 087 877 767 072 41,8
Europe 806 163 513 619 57,0
Emerging Markets 655 026 636 657 2,9
Bidvest Namibia 400 186 493 714 (18,9)
Bidvest Corporate 140 061 317 887 (55,9)
Properties 396 992 366 801 8,2
Corporate and Investments (256 931) (48 914) 425,3
9 672 855 8 945 521 8,1
Summarised consolidated statement of cash flows
for the year ended June 30 2015 Audited 2014 Audited
R’000 R’000
Cash flows from operating activities 6 434 016 5 370 491
Operating profit 9 337 403 7 881 985
Dividends from associates 85 366 76 788
Acquisition costs 74 241 74 044
Depreciation and amortisation 2 539 848 2 344 920
Other non-cash items (315 524) 361 057
Cash generated by operations before changes in working capital 11 721 334 10 738 794
Changes in working capital (74 408) (531 601)
Cash generated by operations 11 646 926 10 207 193
Net finance charges paid (969 404) (895 814)
Taxation paid (2 287 700) (2 067 596)
Dividends paid by - Company (1 767 532) (1 685 663)
- Subsidiaries (188 274) (187 629)
Cash effects of investment activities (6 239 094) (8 493 479)
Net additions to vehicle rental fleet (87 364) (235 089)
Net additions to property, plant and equipment (2 834 200) (2 760 799)
Net additions to intangible assets (278 447) (213 085)
Net acquisition of subsidiaries, businesses, associates and investments (3 039 083) (5 284 506)
Cash effects of financing activities 167 116 1 080 266
Proceeds from shares issued - Company 104 312 55 872
Sale of treasury shares 540 385 326 536
Net borrowings raised (repaid) (477 581) 697 858
Net increase (decrease) in cash and cash equivalents 362 038 (2 042 722)
Net cash and cash equivalents at the beginning of the year 5 560 585 7 092 155
Exchange rate adjustment (104 111) 511 152
Net cash and cash equivalents at end of the year 5 818 512 5 560 585
Net cash and cash equivalents comprise:
Cash and cash equivalents 7 812 877 8 838 573
Bank overdrafts shown as short-term portion of borrowings (1 994 365) (3 277 988)
5 818 512 5 560 585
Summarised consolidated statement of financial position
as at June 30 2015 Audited 2014 Audited
R’000 R’000
ASSETS
Non-current assets 43 094 009 37 358 779
Property, plant and equipment 18 301 434 16 271 788
Intangible assets 2 093 480 1 647 006
Goodwill 13 567 032 11 723 176
Deferred tax asset 877 623 602 850
Defined benefit pension surplus 146 954 124 767
Interest in associates 4 816 412 3 928 433
Investments 2 551 260 2 367 602
Banking and other advances 739 814 693 157
Current assets 46 767 197 43 616 691
Vehicle rental fleet 1 376 295 1 462 715
Inventories 14 843 572 13 541 484
Short-term portion of banking and other advances 547 740 271 282
Trade and other receivables 22 186 713 19 502 637
Cash and cash equivalents 7 812 877 8 838 573
Total assets 89 861 206 80 975 470
EQUITY AND LIABILITIES
Capital and reserves 37 710 234 33 011 115
Attributable to shareholders of the Company 36 372 190 31 780 882
Non-controlling interest 1 338 044 1 230 233
Non-current liabilities 10 020 249 8 937 971
Deferred tax liability 1 033 660 815 402
Life assurance fund 26 733 27 829
Long-term portion of borrowings 7 124 985 7 108 167
Post-retirement obligations 283 920 345 253
Puttable non-controlling interest liabilities 939 430 -
Long-term portion of provisions 511 246 509 980
Long-term portion of operating lease liabilities 100 275 131 340
Current liabilities 42 130 723 39 026 384
Trade and other payables 29 546 008 26 144 355
Short-term portion of provisions 501 611 420 999
Vendors for acquisition 573 271 482 937
Taxation 401 850 268 643
Banking liabilities 2 653 861 2 062 421
Short-term portion of borrowings 8 454 122 9 647 029
Total equity and liabilities 89 861 206 80 975 470
Net tangible asset value per share (cents) 6 372 5 773
Net asset value per share (cents) 11 190 9 965
Summarised consolidated statement of changes in equity
for the year ended June 30 2015 Audited 2014 Audited
R’000 R’000
Shareholders’ interest
Issued share capital 16 758 16 562
Balance at the beginning of the year 16 562 16 387
Shares issued during the year 17 11
Capitalisation issue 179 164
Share premium arising on shares issued 297 298 193 182
Balance at the beginning of the year 193 182 137 485
Shares issued during the year 104 703 56 204
Capitalisation issue (179) (164)
Share issue costs (408) (343)
Foreign currency translation reserve 5 149 394 5 288 068
Balance at the beginning of the year 5 288 068 3 181 802
Realisation of foreign currency translation reserve on sale of subsidiaries and associates (1 687) (2 223)
Arising during the year (136 987) 2 108 489
Hedging reserve 25 383 29 041
Balance at the beginning of the year 29 041 42 581
Fair value gains arising during the year (6 026) (16 572)
Deferred tax recognised directly in reserve 2 368 3 032
Equity-settled share-based payment reserve 310 416 359 594
Balance at the beginning of the year 359 594 255 319
Arising during the year 228 177 186 746
Deferred tax recognised directly in reserve 106 911 107 382
Utilisation during the year (428 422) (189 853)
Transfer to retained earnings 44 156 -
Retained earnings 31 558 166 27 420 045
Balance at the beginning of the year 27 420 045 24 592 164
Attributable profit 5 898 406 4 603 307
Change in fair value of available-for-sale financial assets 23 825 (3 368)
Net remeasurement of defined benefit obligations during the year 33 015 (80 803)
Transfer of reserves as a result of changes in shareholding of subsidiaries (5 437) (5 592)
Dividends paid (1 767 532) (1 685 663)
Transfer from equity-settled share-based payment reserve (44 156) -
Treasury shares (985 225) (1 525 610)
Balance at the beginning of the year (1 525 610) (1 852 146)
Shares disposed of in terms of share incentive scheme 540 385 326 536
36 372 190 31 780 882
Equity attributable to non-controlling interest
Balance at the beginning of the year 1 230 233 1 177 127
Movement in foreign currency translation reserve 20 568 5 954
Movement in equity-settled share-based payment reserve 460 373
Attributable profit 260 970 233 352
Net remeasurement of defined benefit obligations during the year 138 (88)
Dividends paid (188 274) (187 629)
Transactions with non-controlling interest 935 197 (4 448)
Transfer to puttable non-controlling interest liability (926 685) -
Transfer of reserves as a result of changes in shareholding of subsidiaries 5 437 5 592
1 338 044 1 230 233
Total equity 37 710 234 33 011 115
Basis of presentation of summarised consolidated financial statements
These summarised provisional consolidated 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 the 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. They do not include all the information required for a complete set of
IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are
significant to an understanding to the changes in the Group’s financial position and performance since the last annual
consolidated financial statements as at and for the year ended June 30 2014.
In preparing these summarised provisional consolidated financial statements, management makes judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities,
income and expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group’s accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year
ended June 30 2014.
Significant accounting policies
The accounting policies applied in these summarised provisional consolidated financial statements are the same as
those applied in the Group’s consolidated financial statements as at and for the year ended June 30 2014.
During the year, certain operations were reclassified between segments. The comparative year’s segmental information
has been represented to reflect these insignificant changes.
Net acquisition of businesses, subsidiaries, associates and investments
The Group acquired 60% of the issued share capital of DAC for a consideration of €75 million, and the entire issued
share capital of PCL for a consideration of £52 million, with effect from July 1 2014.
As part of the agreement to acquire the shares in DAC, the Group entered into a put option agreement to acquire the
remaining shares in DAC at predetermined future dates and at predetermined future values. A puttable non-controlling
interest liability has been raised in the statement of financial position in this regard.
In February 2015 the Group made an offer to the shareholders of Adcock to acquire 100% of the shares in Adcock at a
price of R52 per share.
The Group’s turnover for the year was enhanced by R3 805,6 million and R1 261,3 million and its trading profit by
R212,9 million and R178,0 million from DAC and PCL respectively.
The acquisitions were funded from its existing cash resources.
The following table summarises the net assets acquired and liabilities assumed which have been included in these
results from the respective acquisition and disposal dates.
R’000 Adcock DAC PCL Other Total Disposals Net
acquisitions acquisitions acquisitions
Property, plant and equipment 65 705 220 660 93 306 379 671 (145 498) 234 173
Deferred taxation 10 904 (113 779) 6 289 (96 586) 693 (95 893)
Interest in associates 737 357 27 503 - 326 305 1 091 165 (19 049) 1 072 116
Investments and advances 6 948 - 587 455 594 403 (293 877) 300 526
Inventories 343 047 - 92 354 435 401 (57 245) 378 156
Trade and other receivables 1 165 459 209 447 229 256 1 604 162 (92 326) 1 511 836
Cash and cash equivalents 76 023 115 893 73 529 265 445 (99 674) 165 771
Borrowings (211 633) (94 164) (58 835) (364 632) - (364 632)
Trade and other payables and provisions (604 561) (245 759) (205 653) (1 055 973) 115 545 (940 428)
Taxation (24 545) (12 873) (4 265) (41 683) 1 253 (40 430)
Intangible assets - 540 861 11 768 552 629 (2 458) 550 171
737 357 854 850 620 286 1 151 509 3 364 002 (592 636) 2 771 366
Non-controlling interest (935 197) - (935 197)
Goodwill 1 910 777 (20 556) 1 890 221
Net assets acquired 4 339 582 (613 192) 3 726 390
Settled as follows:
Cash and cash equivalents acquired/disposed of (265 445) 99 674 (165 771)
Acquisition costs 74 241 74 241
Fair value of existing interests (319 298) (319 298)
Net profit on disposal of operations (154 622) (154 622)
Net change in vendors for acquisition (121 857) (121 857)
Net acquisition of businesses, subsidiaries,
associates and investments 3 707 223 (668 140) 3 039 083
Fair value of financial instruments
The Group’s investment of R2 551 million (2014: R2 368 million) include R431 million (2014: R305 million) recorded at
cost, R1 273 million (2014: R1 408 million) recorded and measured at fair value using quoted prices (level 1) and R847
million (2014: R655 million) recorded and measured at fair value using factors not based on observable data (level 3).
Level 3 investments are valued using discounted cash flows with a discount rate of 15.3% (2014: 15.3%). Fair value gains
recognised in the income statement total R118 million (2014: R12 million) and other reductions of R14 million relate to
purchases and disposals net of foreign exchange gains of R61 million recognised in currency translation reserve.
The carrying amounts of all financial assets and liabilities approximate their fair values, with the exception of
borrowings of R15 569 million (carrying value R15 579 million).
Audit report
The auditors, Deloitte & Touche, have issued their opinion on the Group’s consolidated financial statements for the
year ended June 30 2015. The audit was conducted in accordance with International Standards on Auditing. They have issued
an unmodified opinion. A copy of the auditor’s report together with a copy of the audited consolidated financial
statements are available for inspection at the Company’s registered office.
These summarised provisional consolidated financial statements have been derived from the Group’s consolidated
financial statements and are consistent in all material respects with the Group’s consolidated financial statements. These
summarised provisional consolidated financial statements have been audited by the Company’s auditors who have issued an
unmodified opinion. The auditor’s 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 auditor’s
engagement they should obtain a copy of that report together with the accompanying financial information from the Company’s
registered office.
Preparer of the provisional consolidated financial statements
These summarised provisional consolidated financial statements have been prepared under the supervision of NEJ Goodwin
CA(SA) and were approved by the board of directors on August 29 2015.
Exchange rates
The following exchange rates were used in the conversion of foreign interests and foreign transactions during the
years:
June 30 2015 June 30 2014
Rand / Sterling
Closing rate 19,33 18,07
Average rate 18,03 16,91
Rand / Euro
Closing rate 13,64 14,47
Average rate 13,74 14,11
Rand / Australian Dollar
Closing rate 9,41 10,00
Average rate 9,56 9,54
Supplementary pro forma 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 Group’s financial position, changes in
equity and results of operations or cash flows. An unmodified reasonable assurance report has been issued by the Company’s
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 Company’s 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 and the accounting
policies of the Group as at June 30 2015.
The average rand exchange rate weakened against sterling and the Australian dollar and strengthened against the euro,
the major currencies in which the Group’s foreign operations trade, namely sterling (16,91 in 2014 to 18,03 in 2015),
the Australian dollar (9,54 in 2014 to 9,56 in 2015) and the euro (14,11 in 2014 to 13,74 in 2015). The illustrative
information, detailed below, has been prepared on the basis of applying the 2014 average rand exchange rates to the 2015
foreign subsidiary income statements and recalculating the reported revenue and earnings of the Group for the year.
Illustrative 2015 at 2014
average exchange rates
for the year ended June 30 Actual % change Actual Actual % change
2015 2014 2015
Turnover (Rm) 204 915,9 11,6 183 645,2 201 776,2 9,9
Trading profit (Rm) 9 672,9 8,1 8 945,5 9 595,4 7,3
Headline earnings (Rm) 6 075,6 11,3 5 459,6 6 017,0 10,2
HEPS (cps) 1 882,2 8,6 1 733,9 1 864,0 7,5
Directors
Chairman: CWL Phalatse
Independent non-executive: PC Baloyi, DDB Band, AA da Costa, EK Diack, AK Maditsi, FN Mantashe, S Masinga, D Masson,
NG Payne, T Slabbert
Executive directors: B Joffe (chief executive), BL Berson*, DE Cleasby, AW Dawe, NT Madisa, GC McMahon, LP Ralphs
(*Australian)
Company Secretary: CA Brighten
Transfer secretaries
Computershare Investor Services Proprietary 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 Bank 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: 31/08/2015 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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