THE BIDVEST GROUP LIMITED - Audited provisional financial results for the year ended 30 June 2018

Release Date: 03/09/2018 07:05
Code(s): BVT
 
Wrap Text
Audited provisional financial results for the year ended 30 June 2018

The Bidvest Group Limited 
("Bidvest" or "the Company" or "the Group")
(Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06) 
Share code: BVT
ISIN ZAE000117321

Audited provisional financial results
for the year ended 30 June 2018

Salient features

Trading profit
up 8.2% to
R6.5 billion

Five of the seven divisions
grew trading profit despite
challenging economic conditions

Strong earnings growth
in associate companies

Headline earnings
increased by 11.9% to
R4.1 billion

HEPS
increased by 11.1% to
1 231.6 cents

Normalised HEPS
increased by
12.5%

Strong balance sheet maintained
with conservative gearing

Cash conversion of
106%

Continued strong investment in
South Africa with
R3.7 billion
spent on acquisitions

Final dividend declared of
301 cents
per share, up 14%.

Invested R602 million in training

80% of businesses achieved between level 1-4
B-BBEE ratings

Key financial statistics
for the year ended 30 June 2018

                                                              2018      2017        %
                                                                               Change
Revenue                                        R billion      77.0      71.0      8.4
Gross profit margin(1)
                                                       %      28.9      29.1
Operating expenses ratio(1)                            %      21.0      21.3
EBITDA                                         R billion       8.2       7.7      6.5
Trading result (excluding investment income)   R billion       6.4       5.8      9.6
Trading profit                                 R billion       6.5       6.0      8.2
Trading profit margin                                  %       8.5       8.5
Basic earnings                                 R billion       3.8       4.8   (20.0)
Headline earnings                              R billion       4.1       3.7     11.9
EPS                                                cents   1 137.3   1 430.3   (20.5)
Normalised HEPS(3)                                 cents   1 254.9   1 115.4     12.5
HEPS                                               cents   1 231.6   1 108.2     11.1
DPS                                                cents     556.0     491.0     13.2
EBITDA interest cover                              times       8.0       7.2
Net debt EBITDA                                    times       0.8       0.7
Long-term portion of gross debt                        %      57.1      50.5
Average funds employed                         R billion      30.3      28.6      6.1
Average return on funds employed (ROFE)                %      22.9      22.3
Cash conversion(2)                                     %     106.4      80.4
Weighted number of shares                        million     335.7     333.5      0.7

(1) As percentage of revenue.
(2) As percentage of trading profit.
(3) Normalised headline earnings per share excludes acquisition costs and amortisation of 
    acquired customer contracts.

Message to shareholders

Introduction

Bidvest is a leading business-to-business trading, distribution and services group, operating through seven
divisions: Services, Freight, Automotive, Office and Print, Commercial Products, Financial Services and Electrical.
The Group owns 52.0% of Bidvest Namibia and a significant Bidvest property portfolio, occupied largely by Bidvest
companies. Bidvest continues to hold investments in Adcock Ingram (38.5%), Comair (27.2%) and Mumbai Airport
(6.75%), as well as other listed and unlisted investments.

Highlights

Bidvest delivered a strong result in a volatile market characterised by weak economic growth and consumer spend, as well
as significant business and political uncertainty. The value of a diversified portfolio and the quality of
the underlying businesses continues to manifest in the performance of the South African trading operations. Five
of Bidvest's seven divisions, as well as Bidvest Properties, delivered growth in trading profit. Exceptional cost and
capital disciplines, as well as good cash generation, were highlights against a volatile trading backdrop.

The trading operations delivered an improved result with trading profit increasing by 10.8% against revenue growth
of 8.9%. The results were bolstered by a strong focus on clients and solutions, as well as the successful maiden
offshore acquisitions of Noonan (effective September 2017) and Ultimate Security Services (USS) (effective October
2017) in the Services division and smaller bolt-on acquisitions in the Office and Print and Financial Services
divisions. Bidvest Namibia continued to be impacted by a virtual collapse of the fishing industry and a recessionary
macroeconomic environment in that country. The fishing operations have been sold. Bidvest Corporate benefited
from a strong performance in the property division, a turnaround in the UK operations of Mansfield and Ontime and
mark-to-market fair value adjustments on its various investments. 

Strong profitability gains were achieved at Adcock Ingram and Comair, which increased Bidvest's share of profits from 
these associate companies. The profitability did not translate into higher market values for these investments. 
Bidvest's headline earnings per share (HEPS) increased by 11.1% to 1 231.6 cents (2017: 1 108.2 cents).

Normalised HEPS (HEPS excluding acquisition costs and amortisation of acquired customer contracts), a metric
used by management to assess the underlying business performance, grew by 12.5%. The Group declared a final
dividend of 301 cents per share, bringing the total dividend for the year to 556 cents, up 13.2%.

Financial overview

Group revenue increased by 8.4% to R77.0 billion (2017: R71.0 billion), with R5.2 billion of the increase attributable
to the acquired international services businesses. On a comparable basis, revenue was flat.

Gross profit margin was broadly stable at 28.9% (2017: 29.1%). The inclusion of the lower margin Noonan reset
the overall margin lower. The distribution-type businesses maintained margin, despite input cost volatility and fierce
competition.

Operating expenses increased by 7.1%. Continued, strong focus on cost containment increased like-for-like
expenses by a modest 3.4%.

The trading result was higher by 9.6%. Freight delivered a record result on higher volumes handled through South
Africa's ports. Office and Print's result was particularly pleasing given the structural decline in the industry and
a significant contract handed over to a new operator. A good organic result was delivered by Services while the
Commercial Products division posted a mixed result. Financial Services faced the headwinds of fleet contracts
rolling off. The Electrical division, while not growing profits, managed to perform ahead of a very challenging market.
Automotive results were disappointing mainly due to Bidvest Car Rental and Bidvest Namibia again suffered another decline. 
Acquisitions performed to expectation. 

Income from investments decreased by R68.0 million to R142.8 million. This was the result of a range of realised
and unrealised gains and losses during the year in both the listed and unlisted investments. The insurance
investment portfolio yielded strong growth.

Group trading profit grew 8.2% to R6.5 billion (2017: R6.0 billion), with a stable trading margin of 8.5%.
Net capital items contributed losses of R352.0 million in 2018, relative to profits of R1.0 billion in the prior year.
This included net negative adjustments of R248.7 million to the investment values of mainly Adcock Ingram and
Comair compared to positive adjustments of R1.2 billion for the 2017 financial year. The balance of the charge
relates to the insurance receipts on damaged Freight assets as well as the losses on the disposal and closure of
businesses, including the fishing operations in Namibia.

Net finance charges were 3.7% lower at R1.0 billion (2017: R1.1 billion). Good operational cash generation offset the
additional borrowing to fund acquisitions. There was also a cumulative 50-basis point reduction in the South African
prime lending rate. The Group's average cost of funding is now 6.7%.

Share of profit from associates increased by 11.7%, due to the substantially improved performances in Adcock Ingram 
and Comair.

Bidvest's headline earnings increased by 11.9% to R4.1 billion (2017: R3.7 billion) and HEPS by 11.1% to
1 231.6 cents per share, due to the increased number of weighted average shares in issue. Organic HEPS growth
was 8.0%. Basic earnings per share decreased by 20.5% to 1 137.3 cents (2017: 1 430.3 cents) mainly due to the
contraction in the share prices of our associates compared to material share price increases in the prior year.

Bidvest continues to maintain a conservative approach to gearing and net debt levels are considered acceptable
at R6.3 billion (2017: R5.6 billion). A stable net debt to EBITDA metric at 0.8 times (2017: 0.7 times) and EBITDA 
interest cover of 8.0 times (2017: 7.2 times), are both comfortably above the Group's conservative targets, providing  
ample capacity for further expansion.

Cash generated by operations at R9.4 billion was higher than the R6.9 billion generated in the prior year. The Group
released R1.5 billion of working capital in the current year compared to an absorption of R368 million in the prior
year. Non-financial services had strong and improved cash conversion and Bidvest Bank was successful in raising
deposits.

Return on funds employed (ROFE) improved from 22.3% to 22.9% as asset management remains a core focus,
particularly in these challenging times.

Corporate action

Bidvest's EUR175 million acquisition of Noonan became effective 1 September 2017. The bolt-on acquisition of
USS followed shortly thereafter. Both these businesses traded in line with expectations.

The Group also concluded bolt-on acquisitions in Office and Print and Financial Services. Several opportunities
were assessed during the year, some of which are still being considered. We remain steadfast in our disciplines
when evaluating and responding to opportunities. Buying into the wrong business and management team or the
right business at the wrong price is not in the best interest of our stakeholders.

Over the last year, Bidvest's divisional management critically evaluated all businesses and discontinued various
smaller operations in a portfolio clean-up exercise. The fishing and related operations in Namibia were sold. Security
businesses in West-Africa and the Middle-east were sold, Zonke was closed after the national contract for the
monitoring of limited pay-out machines was handed over to a new operator and some industrial service businesses
exited.

Management remains committed to the disposal of non-core assets, but only at fair value.

Prospects

The core competencies and drivers of Bidvest remain firmly intact and we expect that continued growth will be achieved. 
There is, however, an expectation that economic growth and a return to more robust consumer spending in the current financial 
year will be lacklustre until policy and political certainty emerges post the national election in 2019. The main concern 
remains government's ability to drive infrastructural spending and the ongoing maintenance at certain key 
entities and facilities. It is incumbent on the State to initiate larger programmes of development to kick-start the 
South African economy.

Bidvest is actively advancing its various infrastructural development projects, specifically in liquid gas storage.
Pockets of activity and opportunities exist across the economy and the Group will participate in these. The overall 
projection is for continued growth in trading profit, cash generation and the dividend.

Sufficient headroom exists to advance the Group's strategy of growth in its existing markets, as well as continuing
to acquire divisional bolt-on businesses, and to pursue larger, value adding opportunities locally. Internationally, 
we target expansion in the chosen niche areas of Services and Commercial Products.

On November 1st, we will be celebrating Bidvest's 30th birthday. Since formation, the objective has been to invest
in South African trading, services and distribution businesses and deliver above-average shareholder returns on an
annual basis. Through the ups and downs of economic life, the Bidvest people have transformed a group of homegrown 
South African businesses into industry leaders. This is South African resolve at its best and has served
stakeholders well. We remain committed to this course whilst being Proudly Bidvest and proudly South African.

Divisional review

Services

This is a large and diverse division operating in numerous areas of service. Trading profit rose by 26.3% to
R2.0 billion. The South African businesses delivered an increase of 8.3% in trading profit. The offshore businesses,
Noonan and USS, performed in line with expectations with good volumes of new business secured in the last
quarter. The core annuity income businesses delivered good results with a strong performance from Facilities
Management, BidAir, Allied Services, Steiner and Protea Coin. Both Protea Coin and Prestige have noted some
insourcing and margin pressures, signs of the challenging economy. Management is responding with a sharp focus
on expenses and service innovation. Our travel cluster had another tough year of lower rebate rates and numerous
system changes. The project-based industrial business, TMS, had a poor year and the potential sale of the business
is being negotiated.

Freight

The Freight division had an excellent performance with trading profit up 21.8% on revenue growth of 14.6%. 
Higher agricultural, bulk commodity and liquid volumes drove greater utilisation and therefore operating leverage. 
The investment in liquid fuel and multi-purpose tanks during 2017 and 2018 contributed to the growth. Grain import and
export volumes were exceptional and mineral export flow was steady. Despite three debilitating incidents to berths
and equipment, Bulk Connections performed well. Airfreight volumes remained depressed. Bidvest Panalpina Logogistics (BPL) 
secured new contracts which resulted in a better second half. Project related work was significantly reduced in 
BPL and Bidfreight Port Operations. ROFE remains healthy despite considerable long-dated capital expenditure in 
Bidvest Tank Terminals.

Commercial Products

The division produced a satisfactory result with an increase in revenue of 11.2% and a resultant trading profit
increase of 3.2%. The results include twelve months' trading from Brandcorp vs nine months in the prior year.
Excluding Brandcorp, revenue increased by 5.9% and trading profit by a commendable 7.8%, in a tough trading
environment. Industrial activities represent approximately two-thirds of the trading profit. Excellent results were
achieved by Berzacks, Plumblink, Bidvest Materials Handling (BMH), Academy Brushware and Vulcan. Yamaha
operated in a constrained consumer environment and Renttech's trading profit was significantly down due to
reduced project work. Whilst pricing pressure in the consumer division was relentless, much work was done on
sourcing and price relevance in the market place which ensured the trading margin within the consumer business
was steady. Capex was spent within the industrial businesses to ensure future growth prospects would be met and
will also result in efficiencies going forward.

Office and Print

Revenue declined by 3.8% while trading profit grew by 6.5%. Year-on-year comparisons are distorted by the non-
recurrence of the Tanzanian voter registration project, the closure of Zonke in December 2017 and the net result of
some corporate action. Pressure on the top line was evident, particularly, in office products. Initiatives to simplify
businesses, improve efficiencies and tight cost control were the main contributors to this very pleasing result.
Konica Minolta had a record year while data, print and packaging held its own despite no election work, ongoing
migration from print to post to electronic products and pricing pressure in packaging. After a slow start, Kolok
finished the year stronger and Silveray delivered a good result, driven by innovation and further factory efficiencies.
Tough trading conditions continued at Waltons but ongoing management actions are bearing fruit. Cecil Nurse
delivered another good result. Operating cash generation and asset management was excellent.

Financial Services

Bidvest Bank and the Insurance cluster reported a flat result with trading profit up by 1.0%. Fleet contract roll-off,
the termination of a major short-term rental contract and the negative new business drag from the fast growing life
insurance activities were material headwinds to both revenue and trading profit. The investment portfolio performed
strongly.

No big public sector fleet contracts were secured during the year despite a promising pipeline as decision-making
was postponed. Merchant acquiring, business banking, trade finance and treasury related businesses 
delivered growth. The Bank's corporate advances increased by 13% and deposits grew by 27%. The leased assets
declined by 1%. The Bank also delivered improvements in key banking ratios, with the Credit Loss ratio improving
by 40 basis points to negative 0.2%, the Capital Adequacy ratio increasing by 70 basis points to 20.7% and the Net
Stable Funding ratio improving from 102% to 141%. The cost to income ratio deteriorated somewhat to 64.9%.

Bidvest Insurance delivered a strong result after cleaning up some of the product lines. The balance of the financial
services businesses delivered a reasonable result, boosted by bolt-on acquisitions to broaden the product offering.

Automotive

Bidvest Automotive delivered a disappointing result. Revenue grew by 2.1% but trading profit declined by
R61.2 million to R602.1 million. New vehicles sold by McCarthy outpaced the industry but margins were under
strain. Significant pressure in the luxury segment, in which McCarthy has a leading market share, and reduced
parts activity was largely neutralised by good fleet business, solid activity in the volume brands and the benefit from
closing non-performing dealers in the previous year. The used vehicle segment softened recently as aggressive new
vehicle incentives pose a challenge. Bidvest Car Rental revenue, cost control and fleet management have been
disappointing, resulting in a significant decline in trading profit. This business is currently being reviewed.

Electrical

Considering the challenging conditions in the building and construction industry and the severe downturn that the
larger construction companies are experiencing, Electrical performed commendably. Project-type businesses
were depressed as key programmes stalled. Revenue was broadly flat while trading profit contracted by 14.3%.
Voltex held its own while further entrenching its position as the pre-eminent electrical distributor in South Africa.
Voltex MV LV and Cabstrut delivered strong results while Solid State Power, Electech and the lighting businesses
had a slow year. Initiatives to improve efficiencies and consolidate the solution activities should deliver benefits for
the division. The very significant Waco relocation to a state of the art facility will bring many additional efficiencies
and strategic value to this critical business in our supply chain. Management remains steadfast in its vision to
broaden Bidvest's electrical offering into niche markets which will add value going forward.

Other investments

Bidvest Namibia (52% share)

Namibia delivered a disappointing result with revenue and trading profit 10.9% and 12.9% lower, respectively.
Bidfish recorded an operating loss on a reduction in volumes, poor size mixes, a significant decline in prices,
increased taxes and levies as well as forex losses. The disposal of various parts of the business cloud this year's
result. The food distribution business performed poorly amidst a complete business shakeup and Automotive
trading profit declined sharply as the vehicle market contracted 14%. Freight and Logistics activities delivered a
good result while Industrial and Commercial Products and Services held their own. The trading conditions are not
expected to ease in the short term. The bulk of the corporate action in Fishing is now complete.

Bidvest Corporate
Bidvest Properties performed well with an 11.0% increase in trading profit. A negative mark-to-market adjustment
in Bidcorp, no change to the Mumbai International Airport Limited USD valuation (refer to Fair value of financial
instruments on page 17 for further detail) and good improvement in the UK businesses of
Mansfield and Ontime impacted the result. The weaker Rand against the major currencies also played a role.

Directorate

Ms Renosi Denise Mokate and Mr Norman William Thomson joined the board on 1 May 2018 as non-executive
directors. Mr Mark John Steyn was appointed Chief Financial Officer effective 1 March 2018 and joined the board
as an executive director.

Ms Xoliswa Makasi joined Bidvest as group company secretary effective 1 July 2018, replacing Ms Ilze Roux,
who was acting in this role.

For and on behalf of the board

CWL Phalatse                          LP Ralphs
Chairman                              Chief executive

Johannesburg
31 August 2018

Dividend declaration

In line with the Group dividend policy, the directors have declared a final gross cash dividend of 301 cents 
(240.8000 cents net of dividend withholding tax, where applicable) per ordinary share for the year ended 
30 June 2018 to those members registered on the record date, being Friday, 21 September 2018. This brings the 
total dividend for the year to 556 cents per share (2017: 491 cents).

The dividend has been declared from income reserves. A dividend withholding tax of 20% 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:                                                                  301.0
Net dividend amount per share:                                                                      240.8000
Issued shares at declaration date:                                                               337 463 035
Declaration date:                                                                   Monday, 3 September 2018
Last day to trade cum dividend:                                                   Tuesday, 18 September 2018
First day to trade ex-dividend:                                                 Wednesday, 19 September 2018
Record date                                                                        Friday, 21 September 2018
Payment date                                                                      Tuesday, 25 September 2018

Share certificates may not be dematerialised or rematerialised between Wednesday, 19 September 2018, and Friday, 
21 September 2018, both days inclusive.

For and on behalf of the board

Xoliswa Makasi
Company Secretary

Summarised consolidated
income statement
for the year ended 30 June 2018

                                                                              2018           2017          %
R'000                                                                      Audited        Audited     Change

Revenue                                                                 76 963 472     70 998 001        8.4
Cost of revenue                                                       (54 716 818)   (50 342 325)        8.7
Gross profit                                                            22 246 654     20 655 676        7.7
Operating expenses                                                    (16 199 932)   (15 131 637)        7.1
Other income                                                               319 558        282 122
Trading result                                                           6 366 280      5 806 161        9.6
Income from investments                                                    142 795        210 776
Trading profit                                                           6 509 075      6 016 937        8.2
 Share-based payment expense                                             (154 986)      (143 145)
 Acquisition costs and customer contracts amortisation                    (82 901)       (24 230)
 Net capital items**                                                     (351 977)      1 027 588
Operating profit                                                         5 919 211      6 877 150     (13.9)
Net finance charges                                                    (1 020 730)    (1 059 560)      (3.7)
 Finance income                                                            158 709        232 069
 Finance charges                                                       (1 179 439)    (1 291 629)
Share of profit of associates                                              423 729        379 231       11.7
 Current year earnings                                                     431 857        354 966       21.7
 Net capital items**                                                       (8 128)         24 265

Profit before taxation                                                   5 322 210      6 196 821     (14.1)
Taxation                                                               (1 436 597)    (1 328 232)        8.2
Profit for the year                                                      3 885 613      4 868 589
Attributable to:
Shareholders of the Company                                              3 817 996      4 769 940     (20.0)
Non-controlling interest                                                    67 617         98 649     (31.5)
                                                                         3 885 613      4 868 589     (20.2)
Basic earnings per share                                     (cents)       1 137.3        1 430.3     (20.5)
Diluted basic earnings per share                             (cents)       1 132.4        1 423.4     (20.4)
Supplementary information
Normalised headline earnings per share*                      (cents)       1 254.9        1 115.4       12.5
Headline earnings per share                                  (cents)       1 231.6        1 108.2       11.1
Diluted headline earnings per share                          (cents)       1 226.3        1 102.9       11.2
Shares in issue
Total                                                         ('000)       336 766        335 094
Weighted                                                      ('000)       335 718        333 497
Diluted weighted                                              ('000)       337 161        335 098
Dividends per share                                          (cents)         556.0          491.0       13.2 
 Interim                                                     (cents)         255.0          227.0       12.3
 Final                                                       (cents)         301.0          264.0       14.0

*  Normalised headline earnings per share excludes acquisition cost and amortisation of acquired customer contracts.
** Refer to the headline earnings calculation for additional detail.

                                                                             2018          2017            %
R'000                                                                     Audited       Audited       Change

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                      3 817 996     4 769 940       (20.0)
Impairment/(reversal) of property, plant and equipment;
goodwill and intangible assets                                             12 840       (1 403)
 Property, plant and equipment#                                             3 311       (1 147)
 Goodwill#                                                                 15 258             -
 Intangible assets#                                                         1 115             -
 Taxation effect                                                                -           158
 Non-controlling interest                                                 (6 844)         (414)
Net loss on disposal of interests in subsidiaries and disposal
and closure of businesses                                                 155 828        50 874
 Loss on disposal and closure#                                            188 635        65 311
 Impairment of disposal groups held for sale#                              39 323             -
 Taxation effect                                                         (37 407)      (14 437)
 Non-controlling interest                                                (34 723)             -
Net loss/(gain) on disposal and remeasurement to recoverable
fair value of associates                                                  234 338   (1 080 926)
 Remeasurement to recoverable fair value of associate#
                                                                          248 709   (1 144 633)
 Net (gain)/loss on change in shareholding in associates#                 (2 981)        82 072
 Taxation effect                                                                -      (18 365)
 Non-controlling interest                                                (11 390)             -
Net gain on disposal of property, plant and equipment
and intangible assets                                                    (24 185)       (7 114)
 Property, plant and equipment#                                          (39 796)       (8 446)
 Intangible assets#                                                      (15 895)       (9 371)
 Taxation effect                                                            1 400         2 909
 Non-controlling interest                                                  30 106         7 794
Compensation received on loss or impairment of
property plant and equipment                                             (70 263)             -
 Compensation received#                                                  (85 702)             -
 Taxation effect                                                           15 439             -

Gain on bargain purchase#                                                       -      (11 374)
Non-headline items included in equity accounted earnings
of associated companies                                                     8 128      (24 265)

Headline earnings                                                       4 134 682     3 695 732         11.9

# Items above included as capital items on summarised consolidated income statement.

Normalised headline earnings per share

Normalised headline earnings per share is a measurement used by the chief operating decision maker. The calculation of
normalised headline earnings per share excludes acquisition costs and amortisation of acquired customer contracts and is
based on the normalised headline profit attributable to ordinary shareholders, divided by the weighted average number of
ordinary shares in issue during the year. The presentation of normalised headline earnings is not an IFRS requirement.

                                                                                     2018           2017
R'000                                                                             Audited        Audited

Headline earnings                                                               4 134 682      3 695 732
 Acquisition costs                                                                 50 190         24 230
 Amortisation of customer contracts                                                32 711              -
 Taxation effect                                                                  (4 522)              -
Normalised headline earnings                                                    4 213 061      3 719 962

Summarised consolidated statement
of other comprehensive income
for the year ended 30 June 2018
                                                                                     2018           2017
R'000                                                                             Audited        Audited

Profit for the year                                                             3 885 613      4 868 589
Other comprehensive expense net of taxation
Items that may be reclassified subsequently to profit or loss                    (41 894)      (134 297)

Decrease in foreign currency translation reserve
Exchange differences arising during the year                                     (31 331)      (117 787)
(Decrease)/increase in fair value of available-for-sale financial assets          (3 111)          2 527
Decrease in fair value of cash flow hedges                                        (7 452)       (19 037)

 Fair value loss arising during the year                                         (10 350)       (26 440)
 Taxation effect for the year                                                       2 898          7 403

Items that will not be reclassified subsequently to profit or loss
Defined benefit obligations                                                         2 031          7 394

 Net remeasurment of defined benefit obligations during the year                    2 920         10 278
 Taxation effect for the year                                                       (889)        (2 884)

Total comprehensive income for the year                                         3 845 750      4 741 686
Attributable to:
 Shareholders of the Company                                                    3 785 885      4 654 904
 Non-controlling interest                                                          59 865         86 782

                                                                                3 845 750      4 741 686
Summarised consolidated
statement of cash flows
for the year ended 30 June 2018
                                                                                     2018           2017
R'000                                                                             Audited        Audited

Cash flows from operating activities                                            4 968 427      2 816 458
 Operating profit                                                               5 919 211      6 877 150
 Dividends from associates                                                        206 725        114 494
 Acquisition costs                                                                 50 190         24 230
 Depreciation and amortisation                                                  1 680 638      1 641 568
 Remeasurement to recoverable fair value of associates                            248 709    (1 144 633)
 Other cash and non-cash items                                                  (261 045)      (265 154)
 Cash generated by operations before changes in working capital                 7 844 428      7 247 655
 Changes in working capital                                                     1 523 258      (367 886)
 Cash generated by operations                                                   9 367 686      6 879 769
 Net finance charges paid                                                     (1 038 799)    (1 030 415)
 Taxation paid                                                                (1 297 155)    (1 373 927)
 Dividends paid by the Company                                                (1 740 197)    (1 529 585)
 Dividends paid by subsidiaries                                                 (323 108)      (129 384)
 - Non-controlling shareholders                                                 (319 984)      (129 384)
 - Put-call option holders                                                        (3 124)              -
Cash effects of investment activities                                         (5 872 506)    (1 621 011)
 Net disposals of vehicle rental fleet                                             73 245        107 399
 Net additions to property, plant and equipment                               (2 204 353)    (1 895 257)
 Net additions to intangible assets                                             (102 044)      (141 066)
 Acquisition of subsidiaries, businesses, associates and investments          (3 704 932)      (669 803)
 Disposal of subsidiaries, businesses, associates and investments                  65 578        977 716
Cash effects of financing activities                                              671 239       (21 223)
 Proceeds from shares issued (net of costs)                                       418 028              -
 Disposal of treasury shares                                                            -        274 229
 Borrowings raised                                                              3 669 023      2 902 588
 Borrowings repaid                                                            (3 415 812)    (3 198 040)

Net (decrease)/increase in cash and cash equivalents                            (232 840)      1 174 224
Net cash and cash equivalents at the beginning of the year                      3 886 417      2 706 226
Net cash and cash equivalents arising on consolidation
of the Bidvest Education Trust                                                     23 094              -
Net cash and cash equivalents of disposal groups held for sale                  (122 651)              -
Exchange rate adjustment                                                         (39 622)          5 967
Net cash and cash equivalents at end of the year                                3 514 398      3 886 417
Net cash and cash equivalents comprise:
Cash and cash equivalents                                                       6 168 293      5 132 550
Bank overdrafts included in short-term portion of interest-bearing borrowings (2 653 895)    (1 246 133)
                                                                                3 514 398      3 886 417
Summarised consolidated
statement of financial position
for the year ended 30 June 2018
                                                                                     2018           2017
R'000                                                                             Audited        Audited
ASSETS
Non-current assets                                                             28 950 541     25 323 700
 Property, plant and equipment                                                 11 173 458     10 474 205
 Intangible assets                                                              3 367 806      1 667 710
 Goodwill                                                                       4 447 769      3 167 700
 Deferred taxation assets                                                         761 368        728 913
 Defined benefit pension surplus                                                  224 577        202 886
 Interest in associates                                                         5 342 027      5 375 328
 Life assurance fund                                                               21 324              -
 Investments                                                                    2 802 905      2 843 132
 Banking and other advances                                                       809 307        863 826
Current assets                                                                 29 131 418     26 067 498
 Vehicle rental fleet                                                           1 205 591        992 942
 Inventories                                                                    8 515 551      8 595 692
 Short-term portion of banking and other advances                               1 082 937      1 026 974
 Trade and other receivables                                                   12 033 937     10 136 307
 Taxation                                                                         125 109        183 033
 Cash and cash equivalents                                                      6 168 293      5 132 550
Disposal group assets held for sale                                               253 919              -
Total assets                                                                   58 335 878     51 391 198
EQUITY AND LIABILITIES
Capital and reserves                                                           24 980 709     23 044 323
 Attributable to shareholders of the Company                                   23 957 082     21 697 305
 Non-controlling interest                                                       1 023 627      1 347 018
Non-current liabilities                                                         8 899 765      7 165 102
 Deferred taxation liabilities                                                  1 209 549      1 014 705
 Life assurance fund                                                               10 545        311 355
 Long-term portion of borrowings                                                7 122 485      5 408 072
 Post-retirement obligations                                                       76 943         77 197
 Puttable non-controlling interest liabilities                                     90 530         60 990
 Long-term portion of provisions                                                  248 633        149 907
 Long-term portion of operating lease liabilities                                 141 080        142 876
Current liabilities                                                            24 423 619     21 181 773
 Trade and other payables                                                      12 983 511     11 033 424
 Short-term portion of provisions                                                 281 532        278 582
 Vendors for acquisition                                                           22 708         39 523
 Taxation                                                                         168 844        109 771
 Amounts owed to bank depositors                                                5 621 142      4 412 104
 Short-term portion of borrowings                                               5 345 882      5 308 369
Disposal group liabilities held for sale                                           31 785              -
Total equity and liabilities                                                   58 335 878     51 391 198
Supplementary information
Net tangible asset value per share                                   (cents)        4 793          5 032
Net asset value per share                                            (cents)        7 114          6 475

Summarised consolidated
statement of changes in equity
for the year ended 30 June 2018
                                                                                     2018           2017
R'000                                                                             Audited        Audited
Equity attributable to shareholders of the Company                             23 957 082     21 697 305
Share capital                                                                      16 873         16 770
  Balance at beginning of the year                                                 16 770         16 770
  Shares issued during the year                                                       103             -
Share premium                                                                     797 717        379 792
  Balance at beginning of the year                                                379 792        379 792
  Shares issued during the year                                                   418 505              -
  Share issue costs                                                                 (580)              -
Foreign currency translation reserve                                              262 787        286 628
  Balance at beginning of the year                                                286 628        393 429
  Movement during the year                                                       (23 168)      (105 885)
  Realisation of reserve on disposal of subsidiaries and or associates              (673)          (916)
Hedging reserve                                                                     (963)          6 489
  Balance at beginning of the year                                                  6 489         25 526
  Fair value losses arising during the year                                      (10 350)       (26 440)
  Deferred tax recognised directly in reserve                                       2 898          7 403
Equity-settled share-based payment reserve                                      (243 388)       (14 787)
  Balance at beginning of the year                                               (14 787)         67 002
  Arising during the year                                                         155 637        143 712
  Deferred tax recognised directly in reserve                                      36 540         81 779
  Utilisation during the year                                                   (419 756)      (307 280)
  Realisation of reserve on disposal of subsidiaries and or associates            (1 022)              -
Movement in retained earnings                                                  22 486 993     20 279 261
  Balance at the beginning of the year                                         20 279 261     17 108 032
  Attributable profit                                                           3 817 996      4 769 940
  Change in fair value of available-for-sale financial assets                     (3 111)          2 527
  Net remeasurment of defined benefit obligations during the year                   1 620          7 359
  Retained earnings arising on consolidation of the Bidvest Education Trust       222 155              -
  Transfer of reserves as a result of changes in shareholding of subsidiaries
  and other transactions with subsidiaries                                       (85 706)      (118 000)
  Taxation direct in equity arising from transactions with subsidiaries                 -         47 664
  Remeasurement of put option liability                                           (5 025)        (8 676)
  Net dividends paid                                                          (1 740 197)    (1 529 585)
Treasury shares                                                                   637 063        743 152
Balance at the beginning of the year                                              743 152        468 923
Treasury shares arising on consolidation of the Bidvest Education Trust         (106 089)              -
Shares disposed of in terms of share incentive scheme                                   -        274 229

Equity attributable to non-controlling interests of the Company                 1 023 627      1 347 018
Balance at beginning of the year                                                1 347 018      1 286 606
Other comprehensive income                                                         59 865         86 782
  Attributable profit                                                              67 617         98 649
  Movement in foreign currency translation reserve                                (8 163)       (11 902)
  Net remeasurment of defined benefit obligations during the year                     411             35
Dividends paid                                                                  (319 984)      (129 384)
Movement in equity-settled share-based payment reserve                              (651)          (567)
Changes in shareholding                                                         (125 405)       (14 419)
Grant of put options to non-controlling interests                                (22 922)              -
Transfer of reserves as a result of changes in shareholding of subsidiaries        85 706        118 000

Total equity                                                                   24 980 709     23 044 323

Summarised segmental analysis
for the year ended 30 June 2018
                                                                         2018          2017           %
R'000                                                                 Audited       Audited      Change

Segmental revenue
Trading operations                                                 75 866 401    69 679 523         8.9
 Services                                                          18 968 423    13 138 496        44.4
 Freight                                                            5 713 055     4 986 641        14.6
 Commercial Products                                                8 920 467     8 025 202        11.2
 Office and Print                                                   9 304 937     9 670 916       (3.8)
 Financial Services                                                 2 562 848     4 009 127      (36.1)
 Automotive                                                        24 701 500    24 182 054         2.1
 Electrical                                                         5 695 171     5 667 087         0.5
Namibia                                                             3 381 027     3 794 668      (10.9)
Corporate                                                           1 577 260     1 592 071       (0.9)
 Properties                                                           531 981       489 124         8.8
 Corporate and investments                                          1 045 279     1 102 947       (5.2)

                                                                   80 824 688    75 066 262         7.7
Inter-group eliminations                                          (3 861 216)   (4 068 261)
                                                                   76 963 472    70 998 001         8.4

Segmental trading profit
Trading operations                                                  6 241 094     5 632 476        10.8
 Services                                                           1 991 786     1 577 085        26.3
 Freight                                                            1 303 807     1 070 257        21.8
 Commercial Products                                                  710 492       688 571         3.2
 Office and Print                                                     700 748       657 692         6.5
 Financial Services                                                   631 868       625 303         1.0
 Automotive                                                           602 136       663 395       (9.2)
 Electrical                                                           300 257       350 173      (14.3)
Namibia                                                                75 281        86 470      (12.9)
Corporate                                                             192 700       297 991      (35.3)
 Properties                                                           475 639       428 566        11.0
 Corporate and investments                                          (282 939)     (130 575)     (116.7)

                                                                    6 509 075     6 016 937         8.2

                                                                         2018          2017           %
R'000                                                                 Audited       Audited      Change

Segmental operating assets
Trading operations                                                 31 639 003    29 122 500         8.6
 Services                                                           5 209 904     4 030 779        29.3
 Freight                                                            5 551 181     4 645 695        19.5
 Commercial Products                                                3 762 876     3 551 648         5.9
 Office and Print                                                   3 199 313     3 323 661       (3.7)
 Financial Services                                                 5 502 744     5 563 759       (1.1)
 Automotive                                                         5 783 899     5 339 287         8.3
 Electrical                                                         2 629 086     2 667 671       (1.4)
Namibia                                                             1 843 265     2 015 270       (8.5)
Corporate                                                          10 420 119    10 125 882         2.9
 Properties                                                         2 801 996     2 476 202        13.2
 Corporate and investments                                          7 618 123     7 649 680       (0.4)

                                                                   43 902 387    41 263 652         6.4
Inter-group eliminations                                            (690 773)     (752 360)
                                                                   43 211 614    40 511 292         6.7

Segmental operating liabilities
Trading operations                                                 19 010 833    16 308 453        16.6
 Services                                                           3 060 388     2 182 786        40.2
 Freight                                                            3 118 671     2 556 096        22.0
 Commercial Products                                                1 296 969     1 250 266         3.7
 Office and Print                                                   1 535 893     1 472 161         4.3
 Financial Services                                                 6 766 924     5 798 434        16.7
 Automotive                                                         2 317 409     2 022 061        14.6
 Electrical                                                           914 579     1 026 649      (10.9)
Namibia                                                               526 100       448 478        17.3
Corporate                                                             517 226       400 874        29.0
 Properties                                                            26 402         8 900       196.7
 Corporate and investments                                            490 824       391 974        25.2

                                                                   20 054 159    17 157 805        16.9
Inter-group eliminations                                            (690 773)     (752 360)
                                                                   19 363 386    16 405 445        18.0
Basis of presentation of summarised
consolidated financial statements

These summarised provisional financial statements have been prepared in accordance with the framework concepts
and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and
the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting
Pronouncements as issued by Financial Reporting Standards Council, and includes, at a minimum disclosure as re-
quired by IAS 34 Interim Financial Reporting, the Companies Act of South Africa and the JSE Listing Requirements.
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 30 June 2017.

In preparing the consolidated financial statements from which these summarised provisional consolidated financial 
statements are prepared, directors make 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 directors 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 30 June 2018.

Significant accounting policies

The accounting policies applied in these summarised consolidated financial statements in terms of IFRS and are the
same as those applied in the Group's consolidated financial statements as at and for the year ended 30 June 2017.

Commitments

At the reporting date the Group's total capital expenditure commitments amounted to R1 664 million (2017:
R1 995 million). Bidvest Freight has commenced the development of an LPG tank farm in the port of Richards
Bay, to 30 June 2018, R201 million has been spent with an additional R736 million committed to the project, the
estimated completion date is July 2020. Bidvest Properties and Bidvest Bank are parties to the development of a
property in the Sandton CBD and have a combined commitment of R250 million. Bidvest Properties has committed
R138 million to build a fit-for-purpose warehouse for Bidvest Panalpina Logistics in Mobeni, KwaZulu-Natal.

Fair value of financial instruments

The Group's investments of R2 803 million (2017: R2 843 million) include R32 million (2017: R62 million) recorded at
cost, R1 714 million (2017: R1 785 million) recorded and measured at fair values using quoted prices (level 1)
and R1 057 million (2017: R996 million) recorded and measured at fair value using factors not based on observable
data (level 3). Fair value gains on level 3 investments recognised in the income statement total R57 million
(2017: R95 million).

Analysis of investments at a fair value not determined by observable market data

                                                                                   Year ended     Year ended
                                                                                      30 June        30 June
                                                                                         2018           2017
R'000                                                                                 Audited        Audited

Balance at the beginning of year                                                      995 961        935 017
On acquisition of business                                                                  -         39 087
On disposal of business                                                                     -        (6 087)
Purchases, loan advances or transfers from other categories                             5 434          5 700
Fair value adjustment arising during the year recognised in the income statement       56 559         95 326
Proceeds on disposal, repayment of loans or transfers to other categories                   -       (72 679)
Exchange rate adjustments                                                               (966)          (403)
                                                                                    1 056 988        995 961

The Group's effective beneficial interest in the Indian-based Mumbai International Airport Private Limited (MIAL)
is included in unlisted investments held for trade, where the fair value is not based on observable market data (level 3).
The carrying value of this investment at 30 June 2018, based on the directors' valuation of 30 June 2018, is R988 million
(US$72 million) (2017: R940 million (US$72 million)). The valuation of MIAL is fair value less cost to sell. The calculation
used the pleasing underlying performance of MIAL (EBITDA +13% for the year to March 2018), takes consideration of the
illiquid nature of the asset and applies a discount to the median peer group multiple, which is in a range of 12.5 and
14.1x EBITDA. A 1% change in the multiple or EBITDA will result in US$1.4 million change in the value.

During August 2018, the Group launched a public process to dispose of the stake.

MIAL is a foreign based asset and the ruling year end exchange rate, US$1 = R13.72 (2017: US$1 = R13.06), is a further
factor that affects the carrying value.

The carrying values of all financial assets and liabilities approximate their fair values, with the exception of
borrowings of R12 477 million whose carrying value is R12 468 million.

Acquisition and disposal of businesses, subsidiaries, associates and investments

Acquisitions

The Group acquired 100% of the share capital and voting rights of Noonan Topco Limited (UK), holding company
of the Noonan Services Group (Noonan) with effect from 1 September 2017. Noonan, which is based and operates
throughout the Republic of Ireland and in the United Kingdom, has a clear leadership position and a 40-year track
record of delivering high-quality integrated facility management services and solutions. Its services include soft,
technical and ancillary services and range from cleaning and security to building services and facilities management.
The board believes that Noonan's business model and geographic presence will be complementary to Bidvest's
Service division. The purchase price was funded by way of a three-year euro denominated offshore credit facility at
an attractive variable interest rate.

Effective 1 October 2017, the Group acquired 100% of the share capital and voting rights of Ultimate Security
Services Limited (USS). USS, a building security company operating primarily in London (United Kingdom), provides
building security risk management solutions, "front of house" security management, reception services and mail-
room handling services to more than 240 of London's most prestigious and iconic locations. USS was founded in
1999 and currently has a staff complement of 2 100 experienced security officers. The acquisition enhances the
service offerings provided by Noonan. The purchase price was funded by way of existing euro denominated offshore
credit facility.

The Group also made a number of less significant acquisitions during the year. These acquisitions were funded from
existing cash resources.

The following table summarises the assets acquired and liabilities assumed at fair value which have been included
in these results from the respective acquisition dates. These values represent the final at acquisition fair values
consolidated by the Group.

                                                               Ultimate
                                                     Noonan    Security          Other          Total
R'000                                              Services    Services   acquisitions   acquisitions

Property, plant and equipment                       110 555       8 911         18 565        138 031
Deferred taxation                                 (185 673)           -       (38 576)      (224 249)
Interest in associates                                    -           -         35 221         35 221
Investments and advances                                  -           -        431 933        431 933
Inventories                                           2 134           -         54 184         56 318
Trade and other receivables                         845 610     233 777         86 236      1 165 623
Cash and cash equivalents                            84 583       4 523         37 963        127 069
Borrowings                                         (33 537)           -        (1 429)       (34 966)
Trade and other payables and provisions           (649 430)   (233 320)       (64 542)      (947 292)
Taxation                                             13 032     (6 372)          (911)          5 749
Intangible assets                                 1 573 116           -         93 663      1 666 779
                                                  1 760 390       7 519        652 307      2 420 216
Non-controlling interest                                  -           -         27 487         27 487
Goodwill                                            890 478     369 050         80 687      1 340 215
Net assets acquired                               2 650 868     376 569        760 481      3 787 918
Settled as follows:
Cash and cash equivalents acquired                                                          (127 069)
Acquisition costs                                                                              50 190
Transfer to non-controlling interest put option                                              (22 922)
Net change in vendors for acquisition                                                          16 815
Net acquisition of businesses,
subsidiaries, associates and investments                                                    3 704 932

Goodwill arose on the acquisitions as the anticipated value of future cash flows that were taken into account in determining the
purchase consideration exceeded the net assets acquired at fair value. The acquisitions have enabled the Group to expand its range
of complementary products and services and, as a consequence, has broadened the Group's base and geographic reach in the
marketplace.

With effect from 1 February 2018 the USS acquisition was integrated into Noonan Services. The combined
acquisitions of Noonan and USS contributed R5 241 million to revenue and R284 million to operating profit.

Had the Noonan and USS acquisitions taken place 1 July 2017, the contribution to revenue would have been
R5 771 million and R293 million to operating profit. Other smaller acquisitions contributed R613 million to revenue
and R22 million to operating profit, had these other smaller acquisitions taken place 1 July 2017, the revenue
contribution would have been R707 million and operating profit R27 million.

Disposals

Effective 30 June 2018, the Group disposed of its entire interest in Bidvest Namibia Fisheries Holdings Proprietary
Limited (Bidfish) to Tunacor Fisheries Limited. Bidfish was a 100% held subsidiary of Bidvest Namibia Limited
(Bidvest Namibia). Bidvest Nambia disposed of the Bidfish shares to Tunacor for a cash consideration equal to
the net asset value of Bidfish as at 30 June 2018.

                                                                                 Other        Total
R'000                                                             Bidfish    disposals    disposals

Property, plant and equipment                                   (193 288)     (19 761)    (213 049)
Deferred taxation                                                  62 116       35 673       97 789
Interest in associates                                           (16 965)        (680)     (17 645)
Investments and advances                                          (2 561)    (390 193)    (392 754)
Inventories                                                      (66 510)      (9 447)     (75 957)
Trade and other receivables                                     (125 081)    (156 368)    (281 449)
Cash and cash equivalents                                       (317 700)     (13 712)    (331 412)
Borrowings                                                              -       18 421       18 421
Trade and other payables and provisions                           378 778          568      379 346
Taxation                                                            3 096           55        3 151
Intangible assets                                                       -         (86)         (86)
                                                                (278 115)    (535 530)    (813 645)
Non-controlling interest                                           87 375       33 465      120 840
Realisation of foreign currency translation reserve                     -          673          673
Realisation of share-based payment reserve                          1 022            -        1 022
Goodwill                                                          (4 628)     (40 240)     (44 868)
Net assets disposed of                                          (194 346)    (541 632)    (735 978)
Settled as follows:
Cash and cash equivalents disposed of                                                       331 412
Net loss on disposal of operations                                                          148 247
Receivable arising on disposal of subsidiaries and associates                               190 741
Net proceeds on disposal of businesses, subsidiaries,
associates and investments                                                                 (65 578)

Disposal group held for sale

Bidvest Namibia has identified a purchaser and agreed terms for the disposal group, Comet Investments Capital
Inc. (Comet), a company incorporated in the Peoples Republic of Angola. Bidvest Namibia has a 69.55% interest
in Comet, which in turn owns 49.0% of Pesca Fresca Limitada, an Angolan fishing company with a strong focus on
sardinella fishing.

Subsequent events

Subsequent to year-end R1 billion of the cumulative redeemable preference share funding included in Long-term
portion of borrowings, with a maturity date of 11 September 2019, was settled using existing facilities.

During August 2018 the Group initiated a formal process to dispose of its 6.75% equity investment in MIAL.


Audit report

The auditors, Deloitte & Touche, have issued their opinion on the consolidated financial statements for the year
ended 30 June 2018. 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 consolidated financial statements have been derived from the consolidated financial statements
and are consistent in all material respects with the consolidated financial statements. These summarised provisional
consolidated financial statements have been audited by the Company's auditors who have issued an unmodified
opinion, which is available for inspection at the registered office. The auditor's report does not necessarily report 
on all of the information contained in this announcement. 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. Any reference to future financial information 
included in this announcement has not been reviewed or reported on by the auditors.

Preparer of the summarised consolidated financial statements

The consolidated financial statements and provisional summarised consolidated financial statements have been
prepared under the supervision of the Chief Financial Officer, MJ Steyn BCom CA (SA), and were approved by the
board of directors on 31 August 2018.

REGISTERED OFFICE SOUTH AFRICA
Bidvest House, 18 Crescent Drive, Melrose Arch, Melrose,
Johannesburg, 2196, South Africa
Telephone: +27 (11) 772 8700
Email: info@bidvest.co.za

www.bidvest.com

Sponsor: Investec Bank Limited

Date: 03/09/2018 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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