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Profit up for South African foodservice corporation

Oscar Rousseau

By Oscar Rousseau+

23-Feb-2017
Last updated on 23-Feb-2017 at 14:04 GMT2017-02-23T14:04:50Z

BidCord: demand for meat, value-added processing offers growth 'potential'
BidCord: demand for meat, value-added processing offers growth 'potential'

Multinational foodservice giant BidCorp has reported a 20% rise in half-year profit less than a year after its spin-off from Bidfood (formerly Bidvest Foodservice).

Strong performance across all areas of Bidcorp’s operation – which spans Africa, South America, Asia and the Middle East – was driven by organic growth and market share gains.

Our strategic focus of balancing the exposure between contract, national and independent customers has driven margin improvement, despite generally very low inflation environments,” said Bernard Berson, chief executive of Bidcorp.

Significant volatility across many major currencies, not only versus the [South African] rand, did not materially impact rand-translated results.

‘Pleasing’ results
 
Headline earnings per share (or HEPS) is the key profit barometer used in South Africa and Bidcorp said six-month HEPS up to 31 December 2016 increased by 20.3%. Berson described this growth as “very pleasing”.
 
He also said global rebranding exercise of its company Bidfood, which recently changed its name from Bidvest Foodservice, will “reinforce our image as a value-added food people, rather than logistics providers”.

In May 2016, BidCorp was unbundled from Bidvest, the international trading and services firm, on the Johannesburg Stock Exchange to help shareholders assess the performance of the company.

Overall net revenue was down marginally on the year before and was hit by “the ongoing, deliberate and planned exit of some large contract business in various geographies, which still reflect to some extent in the comparative base”, said Berson.

Net revenue for the six months was ZAR67.8 billion ($5.22bn) down from ZAR68.2bn ($5.25bn) in the same period a year earlier.

The strong position in the market is expected to remain the same in 2017, as worldwide foodservice firms implement strategies to rebalance their exposure between contract, national and independent customers.

Our financial position is strong, cash generation is expected to remain robust and we retain significant headroom to accommodate expansion opportunities, both acquisitive and organic,” said Berson

Fresh produce, meat categories and value-added processing continue to be areas of unexploited potential in many regions.

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