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Report On Annual General Meeting Proceedings, Granting Of Conditional Share Plan Awards And Business Update
THE BIDVEST GROUP LIMITED
(“Bidvest” or “The Group”)
(Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06)
JSE Share code: BVT
ISIN: ZAE000117321
REPORT ON ANNUAL GENERAL MEETING PROCEEDINGS (“AGM”), GRANTING OF CONDITIONAL SHARE PLAN
(“CSP”) AWARDS AND BUSINESS UPDATE
1: REPORT ON AGM PROCEEDINGS
Bidvest shareholders are advised that at the AGM of members held on Monday, 27 November 2017. Except for
Ordinary Resolution’s 6 and 8 (which required a 75% majority), all the other ordinary and special resolutions as
proposed in the Notice of the Annual General Meeting were approved by the requisite majority of members.
In this regard, Bidvest confirms the voting statistics from the AGM as follows:
1 Ordinary resolution number 1: To re-appoint the external auditors
For Against Total Shares Abstained
voted
262 157 610 738 285 262 895 895 704 978
99.72% 0.28% 100.00%
2 Ordinary resolution number 2.1: Re-election of director appointed during the year – CWN Molope
For Against Total share Abstained
voted
262 242 729 534 678 262 777 407 823 466
99.80% 0.20% 100.0%
3 Ordinary resolution number 2.2: Directors retiring by rotation and available for re-election – LP Ralphs
For Against Total shares Abstained
voted
260 459 232 2 443 463 262 902 695 698 178
99.07% 0.93% 100.0%
4 Ordinary resolution number 2.3: Directors retiring by rotation and available for re-election – GC
McMahon
For Against Total shares Abstained
voted
260 500 374 2 402 321 262 902 695 698 178
99.09% 0.91% 100%
5 Ordinary resolution number 2.4: Directors retiring by rotation and available for re-election –T Slabbert
For Against Total shares Abstained
voted
260 479 417 2 423 278 262 902 695 698 178
99.08% 0.92% 100.0%
6 Ordinary resolution number 2.5: Directors retiring by rotation and available for re-election – DDB
Band
For Against Total shares Abstained
voted
239 381 689 23 519 556 262 901 245 699 628
91.05% 8.95% 100.0%
7 Ordinary resolution number 3.1: Election of audit committee members – EK Diack
For Against Total shares Abstained
voted
262 707 197 195 498 262 902 695 698 178
99.93% 0.07% 100.0%
8 Ordinary resolution number 3.2: Election of audit committee members – S Masinga
Resolution withdrawn
9 Ordinary resolution number 3.3: Election of audit committee members – CWN Molope
For Against Total shares Abstained
voted
261 660 811 1 116 796 262 777 607 823 266
99.58% 0.42% 100.0%
10 Ordinary resolution number 3.3: Election of audit committee members – NG Payne
For Against Total shares Abstained
voted
251 099 171 11 803 524 262 902 695 698 178
95.51% 4.49% 100.0%
11 Ordinary resolution number 4.1: Endorsement of Bidvest remuneration report – non-binding advisory
note: “Part 1 - Remuneration policy”
For Against Total shares Abstained
voted
253 527 281 8 731 957 262 259 238 1 341 635
96.67% 3.33% 100.0%
12 Ordinary resolution number 4.2: Endorsement of Bidvest remuneration report – non-binding advisory
note: “Part 2–Implementation of remuneration policy”
For Against Total shares Abstained
voted
255 987 020 6 272 218 262 259 238 1 341 635
97.61% 2.39% 100.0%
13 Ordinary resolution number 5: General authority to directors to allot and issue authorised but
unissued ordinary shares
For Against Total shares Abstained
voted
189 028 763 73 242 021 262 270 784 1 330 089
72.07% 27.93% 100.0%
14 Ordinary resolution number 6: General authority to issue shares for cash
For Against Total shares Abstained
voted
186 225 054 75 921 332 262 146 386 1 454 487
71.04% 28.96% 100.0%
15 Ordinary resolution number 7: Payment of dividend by way of pro rata reduction of share premium
For Against Total shares Abstained
voted
262 894 335 12 357 262 906 692 694 181
100.0% 0.0% 100.0%
16 Ordinary resolution number 8: Creation and Issue of convertible debentures
For Against Total shares Abstained
voted
189 662 548 73 229 390 262 891 938 708 935
72.14% 27.86% 100.0%
17 Ordinary resolution number 9: Directors’ authority to implement special and ordinary resolutions
For Against Total shares Abstained
voted
262 862 965 38 840 262 901 805 708 935
99.99% 0.01% 100.0%
18 Special resolution number 1: General authority to acquire (repurchase) shares
For Against Total shares Abstained
voted
251 641 752 11 251 901 262 893 653 707 220
95.72% 4.28% 100.0%
19 Special resolution number 2: Approval of non-executive directors’ remuneration - 2017/18
For Against Total shares Abstained
voted
262 862 502 27 637 262 890 139 710 734
99.99% 0.01 100.0%
20 Special resolution number 3: General authority to provide direct or indirect financial assistance to all
related and inter-related entities
For Against Total shares Abstained
voted
253 938 297 8 956 058 262 894 355 706 518
96.59% 3.41% 100.0%
2. GRANTING OF CONDITIONAL SHARE AWARDS IN TERMS OF THE 2008 BIDVEST CSP
Executive Directors have been awarded Conditional Share Awards in terms of the 2008 Bidvest Group CSP,
approved by shareholders at the annual general meeting in November 2008. Conditional Share Awards are
subject to performance conditions for the period starting 1 July 2017 and ending 30 June 2020. Subject to
performance, vesting will occur in September 2020 and September 2021. The remuneration Committee has
given approval for the following individual allocations.
Conditional share awards are as follows:
Executive Directors:
L P Ralphs 112 000 conditional share awards
N T Madisa 30 000 conditional share awards
G C McMahon 15 000 conditional share awards
A W Dawe 38 000 conditional share awards
3. BUSINESS UPDATE
Bidvest executive management are briefing stakeholders, including shareholders and financial analysts, on
Tuesday, 28 November 2017 with regards to the performance of the Group for the first four months, ended 30
October 2018, of the financial year (FY18).
Overall, the operating performance, year to date, has been exceptionally pleasing, despite weak economic
activity. This increase can be attributed to the resilience of the underlying businesses and the continuing
strong focus of the Bidvest management team on ensuring an acceptable shareholder return.
Bidvest Chief Executive, Lindsay Ralphs, commented, “Whilst we are very pleased with our year to date
performance, the country and economy continue to face a high level of uncertainty. Bidvest management
remain confident that our resilient business model, tight expense control, the strategic business measures
taken to remain relevant and competitive, as well as increased volumes in certain sectors and acquisitions, will
deliver good growth in FY18. Our sound financial position and strong balance sheet provides adequate
headroom to support our growth and investment aspirations, both locally and internationally.”
The South African operations delivered a strong trading result, which was also partially assisted by the
acquisitions of Brandcorp (effective 1 October 2016) and Noonan. Given the broad reach of our activities,
Bidvest has benefitted from greater commodity and agricultural volumes in various businesses, as well as the
annuity-type nature of many of its operations. Businesses exposed to the infrastructure and construction
sectors witnessed further contraction in demand. Consumer facing businesses reported weak results.
The Noonan acquisition became effective 1 September 2017. Noonan traded ahead of expectations and
recently concluded a bolt-on acquisition of a niche security company, Ultimate Security Services, in the United
Kingdom.
Bidvest Freight secured approvals for the construction of a ZAR1 billion Liquified Petroleum Gas (LPG)
investment. A contractor has been appointed with earthworks now completed. The commissioning of the
multi-purpose tanks in Richards Bay is on track.
Discussions and processes continue with regards to the strategic assessment of Bidvest’s non-core assets. No
further monetisation has occurred since year-end. Bidvest Namibia continues to trade under a cautionary.
Asset management remains a core focus. Management of debtors remain critical in these challenging times
and the current profile is acceptable. In line with normal seasonality, the Group expects working capital
absorption at the end of the interim period. Net debt /EBITDA remains healthy, despite the acquisition of
Noonan and capital investments in projects in South Africa.
Additional operational commentary:
Freight
Higher agricultural and bulk commodity volumes have driven greater utilisation and therefore operating
leverage. The benefit from investment in liquid fuel tanks during the 2017 financial year continues to flow
through in higher trading profit. Activities exposed to airfreight and other discretionary consumer product
imports remained weak. Recent inclement weather in Durban caused some damage and hindered activity at
port loading and storage facilities. Despite this, the division delivered a strong result.
Services
The core annuity income businesses in Services delivered good results. Security held its own. Noonan's maiden
contribution is exceeding expectations. Industrial project services remain weak with trading profit lower in the
quarter. Operationally, Travel results have improved. Management interventions across the division continue
to lower the cost of doing business and further diversify the portfolio. Facilities Management bundling
initiatives are taking shape and the enhanced model is presenting exciting opportunities.
Commercial Products
The Brandcorp acquisition annualised its contribution in the first quarter of FY18. The industrial focused
businesses held their own, while the consumer facing operations experienced a tough quarter, particularly
Yamaha. The Yamaha business model is in the process of being transformed. Academy Brushware, Afcom,
Berzacks, Burncrete, Materials Handling and Vulcan produced solid results.
Financial Services
Fleet contract roll-off is putting pressure on revenue and trading profit within Bidvest Bank. The award of new
material fleet contracts has been delayed. The remainder of the division traded well, considering the negative
business drag from the fast-growing life insurance activities. The investment portfolio yielded strong returns.
Overall, the increase in trading profit was pleasing.
Automotive
New car volumes grew, particularly to fleet customers. Margin retention has, however, been disappointing.
Commercial vehicle dealerships performed well. Bidvest Car Rental volumes, realised rate per day and fleet
utilisation fell short of expectations, largely as a result of an extremely competitive market.
Electrical
The continued decline in construction and infrastructure activity in South Africa resulted in depressed demand.
Many of the project-type businesses experienced a poor quarter, largely due to organisational changes at key
clients. Trading challenges are compounded by cable price volatility. Active price management is vital, and
working capital management and expense control remain key focus areas.
Office & Print
Results were satisfactory despite lower revenue from tough trading conditions. Gross profit margin improved
on a better mix and active management resulted in exceptionally well controlled costs. Stationery demand
continued to decline, but the processes to simplify the businesses are starting to deliver benefits. The furniture
order book remains healthy. Konica Minolta benefitted from the start of a large municipal contract at an
acceptable gross margin, as well as the annualising of the Treasury price adjustment.
Namibia
Bidvest Namibia delivered improved results, but remain well below expectations. Activities are plagued by
recessionary economic conditions. Tight asset management and expense control remain key focus areas. Poor
catch and realised pricing as well as higher gazetted levies remain the key challenges in the fishing operations.
The Bidvest Namibia cautionary was updated on 8 November 2017, stating that negotiations have been
entered to dispose of Bidfish.
Retirement of executive director
The Bidvest Group announces the retirement of its Group financial director, Hans Peter Meijer, effective 28
February 2018. Mr Meijer’s retirement comes after spending nearly 28 years with the Group. He originally
joined Bidvest’s corporate office in 1990 and in 1995 moved into a subsidiary divisional financial role as
financial director of Steiner, appointed as financial director of the Bidvest Services division in 2001, and finally
the Bidvest South Africa division in 2011. He was appointed to the Bidvest board as Group financial director on
23 May 2016. The Board’s nominations committee is at an advanced interviewing stage for Mr Meijer’s
successor, and an announcement will be made in due course.
Conclusion
Bidvest intends issuing its results for the six-months ending 31 December 2017 on Monday, 26 February 2018.
Shareholders are advised that the financial information relating to the 2018 financial year has not been
audited, reviewed or reported on by the Group’s auditors and that this update does not constitute a forecast.
A recording of the stakeholder briefing will be available on www.bidvest.com shortly after the event.
Date: 28 November 2017
Johannesburg
Sponsor: Investec Bank Limited
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