Wrap Text
Unaudited results for the half-year ended December 31 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
Unaudited results for the half-year ended December 31 2015
"... a great platform for an optimistic tomorrow."
Brian Joffe Group chief executive
Highlights
+ 9,6%
Turnover increased to R114,5 billion
(2014: R104,4 billion)
+ 11,8%
Trading result rose to R5,1 billion
(2014: R4,6 billion)
+ 13,0%
HEPS increased to 1 001,5 cents
(2014: 886,3 cents)
+ 13,1%
Distribution per share rose to 482,0 cents
(2014: 426,0 cents)
+ 22,2%
Net asset value per share up to 12 897 cents
(2014: 10 557 cents)
Condensed consolidated income statement
for the
Half-year ended Year ended
December 31 June 30
R'000 2015 2014 Percentage 2015
Unaudited Unaudited change Audited
Turnover 114 446 512 104 436 524 9,6 204 915 925
Revenue 103 303 625 92 613 034 11,5 182 164 453
Cost of revenue (79 800 409) (71 602 834) 11,4 (139 566 689)
Gross income 23 503 216 21 010 200 11,9 42 597 764
Operating expenses (18 526 079) (16 565 648) 11,8 (33 453 768)
Sales and distribution costs (12 986 993) (11 528 784) (23 129 638)
Administration expenses (3 705 917) (3 420 111) (6 783 084)
Other costs (1 833 169) (1 616 753) (3 541 046)
Other income 162 544 150 831 382 023
Trading result 5 139 681 4 595 383 11,8 9 526 019
Income from investments 17 708 26 076 146 836
Trading profit 5 157 389 4 621 459 11,6 9 672 855
Share-based payment expense (112 668) (93 982) (228 637)
Acquisition costs (5 379) (35 026) (74 241)
Net capital items (233 559) (74 693) (32 574)
Operating profit 4 805 783 4 417 758 8,8 9 337 403
Net finance charges (601 521) (578 844) 3,9 (1 120 058)
Finance income 38 513 39 814 112 918
Finance charges (640 034) (618 658) (1 232 976)
Share of profit of associates 98 403 127 503 (22,8) 218 069
Profit before taxation 4 302 665 3 966 417 8,5 8 435 414
Taxation (1 192 902) (1 108 788) 7,6 (2 276 038)
Profit for the period 3 109 763 2 857 629 8,8 6 159 376
Attributable to:
Shareholders of the Company 3 029 104 2 767 461 9,5 5 898 406
Non-controlling interest 80 659 90 168 (10,5) 260 970
3 109 763 2 857 629 8,8 6 159 376
Shares in issue
Total 326 837 324 324 325 052
Weighted ('000) 325 399 320 556 322 792
Diluted weighted ('000) 327 182 323 993 324 606
Basic earnings per share (cents) 930,9 863,3 7,8 1 827,3
Diluted basic earnings per share (cents) 925,8 854,2 8,4 1 817,2
Headline earnings per share (cents) 1 001,5 886,3 13,0 1 882,2
Diluted headline earnings per share (cents) 996,0 876,9 13,6 1 871,7
Distributions per share (cents) 482,0 426,0 13,1 909,0
Half-year ended Year ended
December 31 June 30
R'000 2015 2014 Percentage 2015
Unaudited Unaudited change Audited
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 3 029 104 2 767 461 9,5 5 898 406
Impairment of property, plant and equipment; goodwill
and intangible assets 146 1 518 94 792
Property, plant and equipment 203 2 108 11 740
Intangible assets - - 113 137
Tax relief (57) (590) (30 085)
Net loss (profit) on disposal of interests in
subsidiaries and disposal and closure of businesses 5 685 - (52 855)
Loss (profit) on disposal and closure 5 685 - (95 338)
Tax charge - - 42 483
Net loss on disposal, impairment and reversal of
impairment of investments in associates 230 080 73 285 254 493
Impairment of investments in associates 216 916 118 127 305 047
Reversal of impairment of investments in associate - (33 328) -
Net loss (profit) on change in shareholding in associates 13 164 (11 514) (59 284)
Tax charge - - 8 730
Net profit on disposal of property, plant and equipment (4 807) (569) (151 411)
Property, plant and equipment (2 409) (700) (242 728)
Tax relief (charge) (4 231) 131 36 484
Non-controlling interest 1 833 - 54 833
Non-headline items included in equity accounted earnings
of associated companies (1 478) (758) 32 217
Headline earnings 3 258 730 2 840 937 14,7 6 075 642
Condensed consolidated statement of other comprehensive income
for the
Half-year ended Year ended
December 31 June 30
R'000 2015 2014 2015
Unaudited Unaudited Audited
Profit for the period 3 109 763 2 857 629 6 159 376
Other comprehensive income (expense) 4 064 909 (438 291) (63 099)
Items that may be classified subsequently to profit or loss 4 064 909 (438 291) (96 252)
Foreign currency translation reserve
Exchange differences arising during the period 4 050 223 (437 198) (114 732)
Realisation of reserve on disposal of subsidiaries and associates - - (1 687)
Available-for-sale financial assets
Net fair value gain (loss) on available-for-sale financial assets (6 334) 3 579 29 456
Cash flow hedges
Fair value gains (losses) arising during the period 28 992 (6 801) (6 026)
Taxation effects
Tax relief (charge) for the period (7 972) 2 129 (3 263)
Items that will not be reclassified subsequently to profit or loss - - 33 153
Defined benefit obligations
Net remeasurement of defined benefit obligations during the period - - 44 096
Taxation effects
Tax charge for the period - - (10 943)
Total comprehensive income for the period 7 174 672 2 419 338 6 096 277
Attributable to
Shareholders of the Company 7 061 997 2 316 347 5 814 601
Non-controlling interest 112 675 102 991 281 676
7 174 672 2 419 338 6 096 277
Condensed consolidated statement of cash flows
for the
Half-year ended Year ended
December 31 June 30
R'000 2015 2014 2015
Unaudited Unaudited Audited
Cash flows from operating activities (520 339) 1 421 540 6 434 016
Operating profit 4 805 783 4 417 758 9 337 403
Dividends from associates 88 327 53 661 85 366
Acquisition costs 5 379 35 026 74 241
Depreciation and amortisation 1 442 835 1 345 490 2 539 847
Other non-cash items 21 113 124 605 (315 523)
Cash generated by operations before changes in
working capital 6 363 437 5 976 540 11 721 334
Changes in working capital (3 481 570) (2 370 409) (74 408)
Cash generated by operations 2 881 867 3 606 131 11 646 926
Net finance charges paid (592 449) (570 695) (969 404)
Taxation paid (1 136 290) (1 112 511) (2 287 700)
Dividends paid by - Company (1 572 605) (383 635) (1 767 532)
- subsidiaries (100 862) (117 750) (188 274)
Cash effects of investment activities (3 400 178) (3 931 826) (6 239 094)
Net additions to vehicle rental fleet 28 212 ( 355 067) (87 364)
Net additions to property, plant and equipment (2 655 152) (1 595 229) (2 834 200)
Net additions to intangible assets (117 122) (142 386) (278 447)
Net acquisition of subsidiaries, businesses,
associates and investments (656 116) (1 839 144) (3 039 083)
Cash effects of financing activities 1 548 593 (7 591) 167 116
Proceeds from shares issued 82 506 104 398 104 312
Net issue of treasury shares 418 970 382 795 540 385
Net borrowings raised (repaid) 1 047 117 (494 784) (477 581)
Net increase (decrease) in cash and cash equivalents (2 371 924) (2 517 877) 362 038
Net cash and cash equivalents at beginning of the period 5 818 512 5 560 585 5 560 585
Exchange rate adjustment 698 233 (57 987) (104 111)
Net cash and cash equivalents at end of the period 4 144 821 2 984 721 5 818 512
Net cash and cash equivalents comprise:
Cash and cash equivalents 6 298 693 6 453 820 5 819 288
Bank overdrafts included in short-term portion of interest
bearing borrowings (2 153 872) (3 469 099) (776)
4 144 821 2 984 721 5 818 512
Condensed consolidated statement of financial position
as at
December 31 June 30
R'000 2015 2014 2015
Unaudited Unaudited Audited
ASSETS
Non-current assets 49 152 075 40 468 379 43 094 009
Property, plant and equipment 21 053 008 16 975 428 18 301 434
Intangible assets 2 248 624 2 216 557 2 093 480
Goodwill 16 546 020 13 269 182 13 567 032
Deferred tax assets 922 814 635 510 877 623
Defined benefit pension surplus 146 954 124 768 146 954
Interest in associates 4 822 142 3 926 101 4 816 412
Investments 2 524 116 2 381 866 2 551 260
Banking and other advances 888 397 938 967 739 814
Current assets 52 656 498 45 048 395 44 773 608
Vehicle rental fleet 1 262 758 1 697 958 1 376 295
Inventories 18 045 879 14 973 415 14 843 572
Short-term portion of banking and other advances 705 957 226 717 547 740
Trade and other receivables 26 343 211 21 696 485 22 186 713
Cash and cash equivalents 6 298 693 6 453 820 5 819 288
Total assets 101 808 573 85 516 774 87 867 617
EQUITY AND LIABILITIES
Capital and reserves 43 446 557 35 450 544 37 710 234
Attributable to shareholders of the Company 42 153 184 34 237 585 36 372 190
Non-controlling interest 1 293 373 1 212 959 1 338 044
Non-current liabilities 12 559 806 11 321 753 10 020 249
Deferred tax liability 1 071 514 890 226 1 033 660
Life assurance fund 25 861 27 578 26 733
Long-term portion of borrowings 9 086 978 9 227 023 7 124 986
Post-retirement obligations 298 149 357 647 283 919
Puttable non-controlling interest liabilities 1 084 404 - 939 430
Long-term portion of provisions 830 058 642 805 511 246
Long-term portion of operating lease liabilities 162 842 176 474 100 275
Current liabilities 45 802 210 38 744 477 40 137 134
Trade and other payables 31 305 906 26 038 368 29 546 007
Short-term portion of provisions 998 197 861 090 501 611
Vendors for acquisition 650 035 1 807 958 573 271
Taxation 480 696 367 590 401 850
Short-term banking liabilities 3 096 947 2 061 776 2 653 862
Short-term portion of borrowings 9 270 429 7 607 695 6 460 533
Total equity and liabilities 101 808 573 85 516 774 87 867 617
Net tangible asset value per share (cents) 7 147 5 782 6 372
Net asset value per share (cents) 12 897 10 557 11 190
Condensed consolidated statement of changes in equity
for the
Half-year ended Year ended
December 31 June 30
R'000 2015 2014 2015
Unaudited Unaudited Audited
Shareholders' interest
Issued share capital 16 770 16 758 16 758
Balance at beginning of the period 16 758 16 562 16 562
Shares issued during the period 12 17 17
Capitalisation issue - 179 179
Share premium arising on shares issued 379 792 297 384 297 298
Balance at beginning of the period 297 298 193 182 193 182
Shares issued during the period 82 580 104 703 104 688
Capitalisation issue - (179) (164)
Share issue costs (86) (322) (408)
Foreign currency translation reserve 9 167 601 4 838 047 5 149 394
Balance at beginning of the period 5 149 394 5 288 068 5 288 068
Realisation of foreign currency translation reserve
on sale of subsidiaries and associates - - (1 687)
Arising during the period 4 018 207 (450 021) (136 987)
Hedging reserve 46 403 24 369 25 383
Balance at beginning of the period 25 383 29 041 29 041
Fair value gains (losses) arising during the period 28 992 (6 801) (6 026)
Deferred tax recognised directly in reserve (7 972) 2 129 2 368
Equity-settled share-based payment reserve 117 734 401 041 310 416
Balance at beginning of the period 310 416 359 594 359 594
Arising during the period 112 433 93 703 228 177
Deferred tax recognised directly in reserve 39 891 52 464 106 911
Utilisation during the period (345 006) (104 720) (428 422)
Transfer from retained earnings - - 44 156
Retained earnings 32 991 139 29 802 801 31 558 166
Balance at beginning of the period 31 558 166 27 420 045 27 420 045
Attributable profit 3 029 104 2 767 461 5 898 406
Change in fair value of available-for-sale financial
assets (6 334) 3 579 23 825
Net remeasurement of defined benefit obligations
during the period - - 33 015
Transfer of reserves as a result of changes in
shareholding of subsidiaries (17 192) (4 649) (5 437)
Dividends paid (1 572 605) (383 635) (1 767 532)
Transfer to other reserves - - (44 156)
Treasury shares (566 255) (1 142 815) (985 225)
Balance at beginning of the period (985 225) (1 525 610) (1 525 610)
Shares disposed of in terms of share incentive scheme 418 970 382 795 540 385
42 153 184 34 237 585 36 372 190
Equity attributable to non-controlling interests of the Company
Balance at beginning of the period 1 338 044 1 230 233 1 230 233
Movement in foreign currency translation reserve 32 016 12 823 20 568
Movement in equity-settled share-based payment reserve 235 279 460
Attributable profit 80 659 90 168 260 970
Net remeasurement of defined benefit obligations during the
period - - 138
Dividends paid (100 862) (117 750) (188 274)
Transactions with non-controlling interest (73 911) (7 443) 935 197
Transfer to puttable non-controlling interest liability - - (926 685)
Transfer of reserves as a result of changes in shareholding
of subsidiaries 17 192 4 649 5 437
1 293 373 1 212 959 1 338 044
Total equity 43 446 557 35 450 544 37 710 234
Condensed segmental analysis
for the
Half-year ended Year ended
December 31 June 30
R'000 2015 2014# Percentage 2015#
Unaudited Unaudited change Audited
TURNOVER
Bidvest South Africa 45 263 572 43 881 623 3,1 87 390 798
Automotive 12 149 439 12 282 452 (1,1) 23 683 728
Commercial 2 942 439 2 163 529 36,0 4 168 360
Electrical 2 682 768 2 600 376 3,2 5 256 267
Financial Services 1 509 218 907 864 66,2 2 035 048
Freight 14 673 677 14 423 680 1,7 29 058 663
Office and Print 5 151 281 4 977 947 3,5 10 575 028
Services 6 154 750 6 525 775 (5,7) 12 613 704
Bidvest Namibia 2 045 915 2 049 033 (0,2) 4 085 868
Bidvest Foodservice 68 223 647 59 545 021 14,6 116 588 849
Australasia 14 568 000 14 869 713 (2,0) 28 187 109
United Kingdom 30 367 309 23 847 434 27,3 47 722 732
Europe 14 432 427 12 722 872 13,4 24 802 908
Emerging Markets 8 855 911 8 105 002 9,3 15 876 100
Bidvest Corporate 923 723 817 951 12,9 1 603 871
Properties 244 245 209 445 16,6 425 331
Corporate and Investments 679 478 608 506 11,7 1 178 540
116 456 857 106 293 628 9,6 209 669 386
Inter Group eliminations (2 010 345) (1 857 104) (4 753 461)
114 446 512 104 436 524 9,6 204 915 925
TRADING PROFIT
Bidvest South Africa 2 657 183 2 529 180 5,1 5 146 464
Automotive 357 814 384 735 (7,0) 731 723
Commercial 250 894 182 748 37,3 334 705
Electrical 138 965 121 915 14,0 305 080
Financial Services 264 671 253 591 4,4 527 576
Freight 512 397 566 893 (9,6) 1 059 728
Office and Print 415 325 333 133 24,7 742 446
Services 717 117 686 165 4,5 1 445 206
Bidvest Namibia 120 662 172 514 (30,1) 400 186
Bidvest Foodservice 2 348 680 1 912 490 22,8 3 986 144
Australasia 751 935 680 916 10,4 1 437 078
United Kingdom 717 725 521 489 37,6 1 087 877
Europe 435 012 341 078 27,5 806 163
Emerging Markets 444 008 369 007 20,3 655 026
Bidvest Corporate 30 864 7 275 140 061
Properties 220 203 193 216 14,0 396 992
Corporate and Investments (189 339) (185 941) (256 931)
5 157 389 4 621 459 11,6 9 672 855
#Refer to note below
Message to shareholders
Highlights
The Group delivered solid trading results for the half-year ended December 31 2015, against the backdrop of challenging
market conditions, particularly in the southern African region. Headline earnings per share (HEPS) increased by 13,0%
to 1 001,5 cents per share (2014: 886,3 cents per share) with basic earnings per share (EPS) increasing by 7,8% to
930,9 cents per share (2014: 863,3 cents per share).
Bidvest Foodservice achieved real organic growth in local currencies in most businesses in an environment of zero food
inflation. Trading results in rand overall were buoyed by currency depreciation.
Bidvest South Africa delivered an improved trading result despite tough economic conditions as a consequence of the
fallout from declining commodity volumes and prices in Freight and weak consumer demand in Automotive. Some good
performances were achieved in the Commercial, Electrical and Office and Print divisions. Bidvest Namibia recorded a further
decline in trading profit impacted by poor Fishing and Freight results which outweighed the benefits of newly acquired
Automotive business.
Financial overview
Turnover grew by 9,6% to R114,5 billion (2014: R104,4 billion). Major contributors to the increases were Bidvest
Europe and Bidvest UK, reflecting organic growth and some assistance from currency effects on translation.
Gross profit percentage increased to 20,5% (2014: 20,1%) off the increase in turnover. Operating expenses remained
well controlled, increasing by 5,5% on a like-for-like basis excluding the effects of foreign currency translation.
Investment income declined slightly due to reduced fair value and mark-to-market gains on the portfolio investments.
The Group grew trading profit by 11,6% to R5,2 billion (2014: R4,6 billion). Trading profit margin improved marginally
to 4,5%. The average rand exchange rate weakened against sterling and the euro, resulting in a 3,7% overall benefit to
trading profit.
Net finance charges were 3,9% higher at R601,5 million (2014: R578,8 million), a consequence of higher working capital
utilisation, some acquisitions and a rising interest rate environment in South Africa, both in respect of base rates as
well as credit spreads. Bidvest remains well capitalised in line with its conservative approach to gearing, with
trading profit interest cover at 8,6 times (2014: 8,0 times).
Associate earnings declined by 22,8% largely as a result of the decline in the fortunes of Comair Limited offset to
some extent by the improved performance of Adcock Ingram Holdings Limited (Adcock).
Headline earnings increased by 14,7% to R3,3 billion with profit for the year up 9,5% to R3,0 billion. Headline
earnings adjustments in the period totalled R229,6 million comprising mostly fair value impairments of the investment in
associates. In line with management's valuation as at June 2015, Adcock was valued at R52 per share. As a consequence of the
subsequent decline of the Adcock share price, this may require a non-cash and non-headline earnings impairment at year
end.
The Group's financial position remains strong. Growth in total assets reflects the ongoing investments into
infrastructure and the trading activity in inventories and receivables. Net debt has increased to R12,0 billion as compared to
R7,8 billion at June 30 2015 (2014: R10,4 billion) driven by investment into property, plant and equipment and working
capital utilisation. Normalised trading profit interest cover (excluding the finance costs of the Adcock investment) is
10,7 times (2014: 10,3 times) and is comfortably above the Group's conservative self-imposed targets, retaining adequate
headroom to accommodate expansion opportunities.
Cash generated by operations before working capital changes increased 6,5% to R6,4 billion (2014: R6,0 billion). The
Group absorbed R3,5 billion of working capital in 2015 compared to R2,4 billion in 2014, reflecting growth, the impact of
the devaluation of the rand on replacement inventories, some acquisitions, pockets of inefficient asset management as
well as impacts of currency translation. Net working capital days increased to 17,6 days (2014: 14,1 days).
Moody's Investor Service affirmed Bidvest's national long-term rating of A1.za with a stable outlook in January 2015.
Acquisitions
The Group made a number of small acquisitions, including Plumblink SA Proprietary Limited (Plumblink) in South Africa
and Novel Ford in Namibia.
Prospects
Trading conditions in South Africa are likely to remain subdued in a low growth environment. Certain divisions have
been realigned to cater for succession, and to streamline our service offering to customers. Management will strive to
deliver real organic growth and pursue local and international opportunities to complement our existing product and service
offering. Further acquisition opportunities in the industrial sector are being pursued. In respect of Adcock, good
progress continues to be made on their path to normalised profitability and Bidvest remains optimistic about their
medium-term prospects. Bidvest Namibia continues to face uncertainty around future horse mackerel quotas and the availability
thereof, however initiatives are underway to finding more permanent solutions to the issue. Fixing areas of underperformance
and diversifying the business base remain focus areas.
In the Food businesses, the ongoing focus of our wholesale segments remains on balancing the exposure between national
and independent foodservice customers. Innovative technological foodservice solutions for customers as a value-add
service continue to be rolled out across all businesses. The fresh product offering presents significant potential in most
regions. Across all our businesses, opportunities to add new product ranges and expand local footprints, via both organic
and acquisitive growth, will continue.
Management is conscious of the need to remain focused on improving asset management in order to maximise returns in
our businesses, particularly in current economic environments. Our financial position remains sound, cash generation
remains strong and we retain adequate headroom to accommodate expansion opportunities, both acquisitive and organic.
Management remains alert to opportunities and is confident of delivering further growth in the period ahead.
Over many years, the Bidvest entrepreneurial and decentralised business model has proven its resilience through many
economic cycles. The strength of the culture breeds accountability and confidence which allows the Group to deliver
above-average returns to our shareholders. As the Group prepares itself for the next stage in its evolution, each
management team is confident of being able to sustain 'Proudly Tomorrow'.
Subsequent events
Bidvest announced on October 7 2015 that it was in the process of formalising the restructure of its business
operations and management focus.
Further to this announcement, and in order to provide shareholders with the opportunity to participate directly in
Bidvest's Foodservice operations, Bidvest intends to unbundle and separately list the Foodservice business on the main
board of the JSE. The successful completion of the proposed transaction will be subject to conditions precedent, including
approval by shareholders and the relevant regulatory authorities. Shareholders are advised to continue to exercise
caution when trading in Bidvest securities until a further announcement in this regard is made.
Divisional review
Bidvest Industrial
Bidvest South Africa
In challenging economic conditions the business achieved 3,1% turnover growth to R45,3 billion (2014: R43,9 billion)
and a 5,1% rise in trading profit to R2,7 billion (2014: R2,5 billion). Performance was pleasing as a new divisional
structure was rolled out.
The new combined Services division brings together the original Services division plus Travel and Aviation and Rental
and Products divisions. The Office and Paperplus divisions are consolidated into a new Office and Print division, while
the Industrial and Consumer Products divisions are combined into a single Commercial Products division. The Automotive,
Electrical, Financial Services and Freight divisions remain unchanged.
Automotive
Satisfactory results were delivered in the context of severe market contraction. Turnover dipped to R12,2 billion
(2014: R12,3 billion). Trading profit fell 7,0% to R357,8 million (2014: R384,7 million). Passenger vehicle sales and
margins were under pressure. Expenses rose and credit extension tightened. The uptick in used vehicle trading was slower than
expected. Two loss-making dealerships are being disposed of. The parts business continued to grow, as did service
revenue. Rising interest rates and currency weakness are expected to create significant headwinds in the second half.
Opportunities for selective expansion of McCarthy Pre-Owned will be pursued.
Commercial Products
The new, consolidated division recorded impressive results from both the Industrial and Consumer Products units. The
combined entity drove turnover 36,0% higher to R2,9 billion (2014: R2,2 billion), with trading profit up 37,3% at
R250,9 million (2014: R182,8 million). Trading profit in the new reporting period benefited from Plumblink's first
contribution (acquired July 2015).
Home of Living Brands experienced volume growth at almost all top retailers in the customer mix. Independents face
particular challenges, but a new approach by management resulted in overall volume improvements. Online sales grew and
exports met expectations. Academy Brushware, Bidvest Afcom, Berzacks, Bidvest Materials Handling, Bidvest Buffalo Tapes and
Yamaha all delivered solid results. Vulcan Catering and G Fox faced challenges. Plumblink bedded down well and opened
eight new stores. A restructure was undertaken at Sanlic.
Electrical
A positive half-year result was achieved. Turnover rose 3,2% to R2,7 billion (2014: R2,6 billion). At R139,0 million,
trading profit was up 14,0% (2014: R121,9 million). Margins and expenses were well managed. Cable volumes rose while
market prices fell. Infrastructure and construction faced intense pressure. Volume and margin pressure is constant among
mining customers. Subcontractor debtor stress remains a challenge. Eastern and southern Cape operations are being
consolidated. The Voltex Lighting business restructure is underway. Atlas, Solid State and Waco did well. The Voltex MV/LV
Solutions business is positioned for ongoing growth. Versalec disappointed but remains profitable with a strong order book.
Financial Service
Trading profit rose 4,4% to R264,7 million (2014: R253,6 million), buoyed by a strong Bidvest Bank performance.
However, poor share portfolio performance within the Insurance business led to a negative mark-to-market adjustment of
R41,3 million on the prior year.
Trading profit at Bidvest Bank rose 26,7% to R231,9 million (2014: R183,1 million). At R1,5 billion, new lending
pay-outs were 451% up on the comparative period. Top-line income of R527,5 million was up 20% on strong contributions from
foreign exchange, transactional banking and fleet and asset finance. Deposits were up 50,3% at R3,2 billion. Corporate
advances, leased assets and trade finance showed pleasing growth. The bank is strongly cash generative, though cash
surpluses fell from R2,0 billion to R1,4 billion as management maintained strong focus on higher returns.
Trading profit at Bidvest Insurance fell 53,6% to R32,7 million (2014: R70,5 million), though gross written premiums
rose 7,2% to R148,0 million (2014: R138,1 million). Premiums were buoyed by the launch of the commercial channel and
rising volumes from new product ranges, including Theft Buster and travel insurance.
Freight
Half-year results were disappointing. Turnover increased 1,7% to R14,7 billion (2014: R14,4 billion). Trading profit
dropped 9,6% to R512,4 million (2014: R566,9 million). Big reductions in commodity volumes created substantial
challenges. South African Bulk Terminals handled no maize volumes as drought crippled agricultural exports. However, Bidvest
Tank Terminals achieved some growth and the Richards Bay fuel storage build made progress. Bidvest Panalpina Logistics also
put in a good performance buoyed by automotive demand and warehousing growth. Port Operations experienced low activity
levels in both its terminal and stevedoring operations. South African Container Depots was hit by lower import volumes as
a consequence of rand weakness. Exports also fell. Low demand from mining customers severely impacted Bulk Connections.
Naval volumes were well down.
Office and Print
The consolidated business, combining Office and Paperplus, achieved satisfactory results, with turnover 3,5% higher at
R5,2 billion (2014: R5,0 billion) and trading profit up 24,7% at R415,3 million (2014: R333,1 million).
Lithotech was buoyed by export income and changes to its service mix. Bidvest Data created a competitive advantage
from the shift to electronic communication. Bidvest Packaging maintained strong momentum after consolidation. Rotolabel
achieved a pleasing turnaround, as did Silveray. Kolok performed strongly, with rand weakness contributing to its results.
Performance at Waltons continued to disappoint. A strong performance was put in by Konica Minolta. Zonke Monitoring
Systems again did well. Among the furniture businesses, Cecil Nurse performed exceptionally well and the furniture
contribution was well above budget.
Services
A new-look Services business, combining the previous operations at Services, Rental and Products, and Travel and
Aviation recorded acceptable results. Turnover fell 5,7% to R6,2 billion (2014: R6,5 billion) mainly as a result of the
Cash-in-Transit business sale in February 2015. Trading profit, however, was up 4,5% at R717,1 million (2014: R686,2
million). Fine individual business performances were interspersed with some sluggish results. Expenses were well managed.
Several new management teams made a promising start and new business clusters settled down well.
Facilities Management Services, the largest cluster in the business, produced reasonable results. Prestige is
centralising its division into hubs with warehousing. Employment tax incentives underpinned good Prestige growth. Steiner was
impacted by the weak rand, but achieved acceptable growth. Royal Mnandi disappointed. A restructure is under way.
Allied Services' growth was bolstered by pleasing results at Pureau and Execuflora. Pureau's bulk water and coffee
sales were a highlight.
The security cluster achieved very positive results, and the Technical turnaround continued. BidTrack excelled. An
enhanced sales team is in place.
Within Industrial Services, BidAir put in a stellar performance. Cargo volumes are well up. Results at TMS were flat
and operating expenses moved higher. Vericon achieved profit growth and Laundries made some gains.
The travel cluster faced serious challenges, with the flagship Rennies brand under pressure.
Bidvest Namibia
Results again disappointed. Turnover was flat at R2,1 billion, but trading profit fell 30,1% to R120,7 million
(2014: R172,5 million). Bidfish was impacted by poor performance at Trachurus, Comet (Angola) and Namsea. Freight and
Logistics performed below expectation. Food and Distribution achieved some growth. Performance was flat at Industrial and
Commercial. The recently acquired Automotive business became the second largest profit contributor after Bidfish. Another
recent acquisition, Namibia Bureau de Change made a small contribution. The Glenryk brand was acquired.
Bidvest Foodservices
Food Group achieved strong results in challenging economic environments across all regions. Strategies put in place in
recent years solidified. UK and Europe achieved strong growth. Australasia made a solid contribution, as did Emerging
Markets.
Turnover rose 14,6% to R68,2 billion (2014: R59,5 billion), with trading profit 22,8% higher at R2,4 billion
(2014: R1,9 billion).
Australasia
Turnover reported in Australasia fell 2,0% to R14,6 billion (2014: R14,9 billion), but the dip was more than offset by
a pleasing 10,4% rise in trading profit to R751,9 million (2014: R680,9 million) as the mix changed.
Australia delivered a strong performance, growing the free-trade base while exiting some large logistics contracts.
Expenses rose, but this was foreseen as the new Fresh Produce and Fresh Meat divisions operate off a higher expenses base.
The new divisions were slow to build momentum, but look forward to second-half improvements.
New Zealand exceeded sales and profit expectations on the back of a strong second quarter. The core Foodservice, Fresh
and Logistics divisions did well, while solid improvements were seen in Processing and Retail. A key focus was the use
of specialist sales resources to support margins and drive growth in key categories.
UK
Foodservice performed very well, achieving good sales and profit growth. Margins were well managed. Turnover was up
27,3% at R30,4 billion (2014: R23,8 billion) and trading profit 37,6% higher at R717,7 million (2014: R521,5 million).
Strategic focus remains on building an entrepreneurial culture while driving free-trade volumes. The south of England
infrastructure programme is progressing well. Logistics had a difficult period impacted by excess capacity, delayed new
contract start-ups and high vehicle expenses, yet achieved sales growth. A major long-term contract was won. Bidvest Fresh
faced a tough six months as Seafood experienced operational challenges, though Oliver Kay did well.
Europe
A positive half-year result was achieved. Turnover rose 13,4% to R14,4 billion (2014: R12,7 billion) and at R435,0 million
trading profit was up 27,5% (2014: R341,1 million). Deli XL Netherlands grew profit and sales. Lower Institutional
volumes were offset by improvements in the free-trade sector. Deli XL Belgium put in a solid performance. Catering and
Institutional did well. Horeca sales faced pressure. DAC Italy put in a pleasing performance as the business footprint
grows nationally. Cash generation was robust. Farutex Poland exceeded budget for sales and profit. Strong growth was seen
in the individual market. Czech Republic and Slovakia achieved good results. Foodservice optimised changes to the sales
team and Retail surprised on the upside. Ice cream sales hit a 10-year high. Bidvest Baltics were impacted by the
Russian food embargo and the slowdown in the Russian economy. Aktaes Turkey improved significantly against the prior year.
Emerging Markets
Emerging Markets increased turnover 9,3% to R8,9 billion (2014: R8,1 billion). Trading profit rose 20,3% to R444,0 million
(2014: R369,0 million).
Bidvest Food Africa achieved net sales growth above food inflation, with improved trading profit. Bidvest Food
Ingredients saw strong growth across most channels while Bidvest Foodservice did well in the independent and national account
channels. Bidvest Bakery Solutions recorded continued growth in the retail and franchise sectors. Industrial sector sales
and export business faced challenges. The business acquired full ownership of its Zambian operations.
Angliss Greater China again performed well. Shenzhen and Beijing showed exceptional sales growth. However, Hong Kong
failed to meet expectations as tourism inflows slowed. Sales in China's second-tier cities grew steadily.
Angliss Singapore continued its rightsizing programme. Operational efficiencies and new synergies are evident.
At Bidvest Procurement Company, sales and customer support showed pleasing growth. Strong sales momentum is driven by
new additions to the product mix and repeat orders.
In Brazil, sales and profit fell, though earnings were impacted by once-off distribution centre relocation costs.
After adjustments for abnormal costs, profit eased higher in an extremely challenging economic environment.
Despite the economic slowdown in Chile, pleasing sales and trading profit growth were achieved. Margins and expenses
were well managed, and the move to the new Santiago distribution centre was completed.
Across the Middle East, resilient businesses delivered healthy growth in a tough geopolitical environment, with margin
management improvements evident in the UAE, Saudi Arabia and Bahrain. Sales growth was assisted by changes to the
portfolio mix across all markets.
Bidvest Corporate
Ontime Automotive UK remained loss-making on the back of an extremely onerous contract. Activity levels at Technical
Services were subdued. At Mansfield Rescue Recovery the mild winter resulted in lower job numbers and a trading loss was
recorded. New efficiencies are being implemented as unprofitable contracts are renegotiated or exited. Bidvest
Properties continued to develop its portfolio while assisting Bidvest operations to expand their infrastructure.
Directorate
At the annual general meeting (AGM), Mr AA da Costa retired from the board. The board and management of Bidvest wish
to thank Mr da Costa for his contribution to the development of Bidvest.
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 482,0 cents (409,7 cents
net of dividend withholding tax, where applicable) per ordinary share for the six months ended December 31 2015 to those
members registered on the record date, being Friday, April 8 2016.
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: 482,0 cents
Net dividend amount per share: 409,7 cents
Issued shares at declaration date: 335 404 212
Declaration date: Monday, February 29 2016
Last day to trade cum dividend: Friday, April 1 2016
First day to trade ex dividend: Monday, March 4 2016
Record date: Friday, April 8 2016
Payment date: Monday, April 11 2016
Share certificates may not be dematerialised or rematerialised between Monday, April 4 2016 and Friday, April 8 2016,
both days inclusive.
For and on behalf of the board
CA Brighten - Company Secretary
Johannesburg
February 29 2016
Basis of presentation of condensed consolidated financial statements
These interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim
Financial Reporting and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial
Reporting Pronouncements as issued by Financial Reporting Standards Council. They do not include all the information
required for a complete set of International Financial Reporting Standards (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 2015.
In preparing these interim condensed 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 2015.
Significant accounting policies
The accounting policies applied in these interim condensed 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 2015.
Comparatives#
During the period, certain operations were reclassified between segments as a result of an internal reporting
restructure. The comparative period's segmental information has been amended to reflect these changes.
Net acquisition of businesses, subsidiaries, associates and investments
The Group made a number of small acquisitions and concluded certain minor disposals during the period.
The acquisitions were funded from its existing cash resources.
Unaudited results
These results have not been audited or reviewed by the Group's auditors. The interim condensed consolidated financial
statements have been prepared under the supervision of the Group financial manager, NEJ Goodwin CA(SA), and were
approved by the board of directors on February 26 2016.
#Refer to condensed segmental analysis above
Exchange rates
The following exchange rates were used in the conversion of foreign interests and foreign transactions during the periods:
December 31 June 30
2015 2014 2015
Rand/sterling
Closing rate 23,03 18,04 19,33
Average rate 20,86 17,89 18,03
Rand/euro
Closing rate 16,95 14,12 13,64
Average rate 15,01 14,16 13,74
Rand/Australian dollar
Closing rate 11,35 9,48 9,41
Average rate 9,84 9,79 9,56
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. 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 Group's foreign operations trade,
namely sterling (17,89 in 2014 to 20,86 in 2015), the euro (14,16 in 2014 to 15,01 in 2015) and the Australian dollar
(9,79 in 2014 to 9,84 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 income
of the Group for the period.
For the half-year ended Illustrative 2015 at 2014
December 31 average exchange rates
Actual Actual Recalculated Percentage
2015 2014 2015 change
Turnover (Rm) 114 446,5 104 436,5 108 233,9 3,6
Trading profit (Rm) 5 157,4 4 621,5 4 986,3 7,9
Headline earnings (Rm) 3 258,7 2 840,9 3 134,5 10,3
HEPS (cps) 1 001,5 886,3 963,3 8,7
Administration
Directors
Chairman: CWL Phalatse
Independent non-executive: PC Baloyi, DDB Band, EK Diack, AK Maditsi, 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
Email: info@bidvest.co.za
Tel: +27 (11) 772 8700
Further information regarding our Group can be found on the Bidvest website:
www.bidvest.com
Date: 29/02/2016 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
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