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Unaudited financial results and cash dividend declaration for the six months ended 31 December 2019
THE BIDVEST GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06)
JSE Share code: BVT
ISIN: ZAE000117321
("Bidvest" or "The Group")
UNAUDITED FINANCIAL RESULTS AND CASH DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
SALIENT FEATURES
- Trading profit grew by 19.8% to R4.0 billion
- Trading profits margin improved 81bps to 9.2%
- Strong balance sheet maintained with 1.1x net debt / EBITDA
- ROFE up to 24.8%
- Operational cash generated up 32.7% to R5.5 billion
- Acquiring the largest hygiene service provider in the UK and Spain, PHS, for GBP495 million
- Normalised HEPS of 610.9 cents
- Unchanged interim dividend of 282 cents per share
PERFORMANCE OVERVIEW
Trading profit increased by 19.8% to R4.0 billion, off 9.2% revenue growth to R43.7 billion, enhanced by the consolidation of Adcock.
During the six months to December 2019, Bidvest's domestic operations held their own in a tough trading environment characterised by
low business confidence and constrained consumer demand culminating in lower volumes. Offshore service businesses performed well.
Our services businesses, comprising the Services, Freight and Financial Services divisions, grew trading profit by 6.5%.
Exceptional cost management and good capital discipline resulted in improved margins. Post working capital, cash generated
from operations increased almost three-fold to R3.8 billion.
The impact of accounting for Adcock as an associate for one month and consolidating it from 1 August 2019, was neutral on headline earnings.
The balance sheet remains strong. Return on Funds Employed (ROFE) improved from 22.8% to 24.8%. ROIC of 16.3% is well above
the Group's weighted cost of capital.
Acquisitions and investment in our businesses continued. The Bidvest balance sheet remains healthy. Net asset value grew by
3.4% to R77.10 per share.
In December, we announced the acquisition of PHS, the largest hygiene services provider in the UK and Spain, for GBP495 million.
This is in line with Bidvest's strategic intend to expand internationally in niche, asset light annuity income businesses that will
benefit from Bidvest's capabilities and expertise.
Normalised HEPS is a measurement used by management to assess the underlying business performance. The Group delivered a
slightly improved result, as reflected in pro forma normalised HEPS(1) of 636.5 cents. The non-cash impact of IFRS 16 (4.1%) and
Bidvest's share of Comair's impairment of the SAA settlement (5.8%) represents the differential to the reported 10.5% decline in
HEPS (563.2 cents). Basic EPS declined 27.7% to 476.9 cents due to the contraction in the share prices of associates compared to
material share price increases in the prior period.
The Group declared an interim dividend of 282 cents per share, in line with the prior period.
(1) Normalised HEPS, which excludes acquisition costs, amortisation of acquired customer contracts and includes an adjustment
for Bidvest's share of Comair's SAA impairment, is a measurement management uses to assess the underlying business performance.
PROSPECTS
The core competencies and drivers of the Bidvest business remain firmly intact. The diverse portfolio of businesses and extensive
reach allow the Group to weather challenging times. Our basic-need services and everyday essential product ranges enable the
Group to support and add value to all its stakeholders. Innovation to disrupt ourselves, and the industries in which we operate,
remains a core focus alongside disciplined asset management and cost control.
We anticipate the economic conditions experienced during the interim period to persist for the remainder of the financial year.
Bidvest remains well positioned to participate in pockets of activity and opportunities while creating value for its extensive
stakeholder base.
Bidvest will continue to carefully consider strategic investments in South Africa and internationally to generate sustainable
profits for the long term, particularly in those sectors where we can capitalise on structural growth drivers including out-of-
home hygiene, urbanisation, health and wellness awareness and outsourcing.
The Group remains cognisant of making growth decisions for capital investment in long-dated relevant infrastructure assets
backed by take-or-pay contracts, such as the LPG storage project in Richards Bay. This thinking has also led to a decision to
establish an inland LPG storage terminal, which was recently approved.
The funding for the acquisitions of PHS and Eqstra will absorb a meaningful portion of the financial headroom that exists on the
Group's balance sheet today. The resulting gearing ratio will, however, remain comfortably below bank covenants. Strong free
cash generation and a robust balance sheet will continue to support the Group's strategy of growth in its existing markets, as well
as continuing to acquire bolt-on businesses. This will also enable Bidvest to pursue expansion internationally in the chosen niche
areas of Services and Commercial Products.
DIVIDEND DECLARATION
In line with the Group dividend policy, the directors have declared a final gross cash dividend of 282 cents (225.6000 cents net
of dividend withholding tax, where applicable) per ordinary share for the six months ended 31 December 2019 to those members
registered on the record date, being Friday, 27 March 2020. 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: 282.0
Net dividend amount per share: 225.6000
Issued shares at declaration date: 340 274 346
Declaration date: Monday, 2 March 2020
Last day to trade cum dividend: Tuesday, 24 March 2020
First day to trade ex-dividend: Wednesday, 25 March 2020
Record date: Friday, 27 March 2020
Payment date: Monday, 30 March 2020
Share certificates may not be dematerialised or rematerialised between Wednesday, 25 March 2020, and Friday, 27 March 2020,
both days inclusive.
REGULATORY REQUIREMENTS
The contents of this short-form announcement are the responsibility of the board of directors of the Group. These are the
summarised results of the full announcement for the interim period and do not contain full or complete details of the financial
results. Any investment decisions made by investors and/or shareholders should be based on consideration of the full announcement
as a whole and shareholders are encouraged to read the full announcement which is available for viewing on the Company's website
(www.bidvest.co.za) and https://senspdf.jse.co.za/documents/2020/jse/isse/BVT/1HFY2020.pdf
The full announcement is available for inspection at the registered office of Bidvest, Bidvest House,
18 Crescent Drive, Melrose Arch, Melrose, Johannesburg, 2196, South Africa and at the offices of Bidvest's sponsors, Investec
Limited, 100 Grayston Drive, Sandown, Sandton, 2196, South Africa.
Inspection of the full announcement is available to investors at no charge, during normal business hours from 2 March 2020.
The information in this announcement has been extracted from the Unaudited Condensed Consolidated Financial Statements. The
Unaudited Condensed Consolidated Financial Statements have been prepared under the supervision of the Chief Financial Officer,
MJ Steyn, BCom CA(SA).
Date: 2 March 2020
Johannesburg
Sponsor: Investec
Date: 02-03-2020 07:05:00
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