Bid Corporation (Bidcorp) is on the hunt for acquisitions backed by a robust balance sheet.
CEO Bernard Berson said the group was still seeking bolt-on acquisitions, including larger ones, even though they had been scarce in recent years.
“Our balance sheet provides significant financial firepower for opportunities; however, we will continue to be disciplined in capitalising on the most appropriate opportunities,” Berson said.
This is as the group kicked off its new financial year on very strong footing even as the global food-services company flagged persistently higher food inflation in most parts of the world.
Bidcorp operates in more than 35 countries across six continents, servicing hotels, pubs and restaurants among its wide array of clients in the hospitality industry.
The geographic diversification of its portfolio also means it is exposed to the vagaries of the volatile foreign-exchange markets.
Updating its shareholders on the four months ended October, Bidcorp said on Tuesday that sales surged 112% year on year, with the UK, emerging markets, Europe and Australia all punching above their weight.
However, there were slight variations in individual market countries such as China, where consumer spending was under pressure, reflecting the broader economic malaise in the world’s second-largest economy.
Hong Kong underperformed because consumers left the city during the northern hemisphere summer holiday, while the anticipated influx of tourists did not happen.
“Customer demand post-June 2023 held up well both in the UK and Europe through the northern hemisphere summer despite generally poor weather in the peak holiday season,” Bidcorp said.
“Australasian demand is stable despite weaker economic conditions. In emerging markets, except for greater China, market demand has held up despite generally unfavourable economic conditions.
The share price dropped 3.45% to R415.57 in early afternoon trade on the JSE, but was still up 26% year to date, making it one of the best performing among the top 40 JSE-listed stocks.
“The consumer eat-out spend appears to have moderated a bit, but it’s not a drop-off,” Imtiaz Suliman, portfolio manager and executive director at Sentio Capital.
Bidvest said high food inflation had started to moderate but remained sticky and was tracking higher than core inflation in most parts of the world.
However, labour costs have stabilised as the demand for skills and the scarcity of labour eased. Energy and fuel costs, both of which are not a material component of the cost base, have declined and have benefited the businesses.
Bidcorp said headline earnings per share also grew during the reporting period year on year, despite an estimated weighted average inflation of about 8%.
However, gross profit margin will be lower compared with the matching period a year ago, weighed down by the UK where food inflation was estimated at 12%.
The weaker rand provided a tailwind for the group as it positively affected translated earnings.
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