Bid Corporation (Bidcorp) has not turned negative on SA despite several headwinds facing the domestic economy, the CEO of the food services major says, adding that the group is on the hunt for acquisitions in the country.
“In SA, we have three businesses. They are slightly countercyclical to each other. The rate of growth in the food business is slowing down a little bit, but the ingredients business is seeing an improvement through food manufacturers, processors and the retail channel,” CEO Bernard Berson told Business Day on Wednesday.
“SA is a tough place to do business. The economy has not grown and the consumer is struggling. But we are out there, doing the best we can. We are not negative about our prospects in SA.”
The SA market, where it employs about 3,500 people, is one of those in which the company is looking for bolt-on acquisition opportunities.
“We are looking at doing a couple of deals in SA, some in Europe and some in the UK. We are very opportunistic and the deals we are looking at are relatively small and will incrementally add to the base of what we do,” Berson said.
The group, worth about R150bn on the JSE, reported its interim results covering the six months to to end-December on Wednesday.
The results showed its Europe business was a standout feature among its markets after reporting record revenue and trading profit.
The SA-based global food services group operates in more than 35 countries across six continents, servicing hotels, pubs and restaurants among its wide array of clients in the hospitality industry.
Tabling the results, the company said its headline earnings per share rose 19% to R11.50 during reporting period versus the same period a year ago.
Group trading profit jumped 21% to R5.9bn, with revenue up 24% to R113.8bn.
Europe more than compensated for the slack in markets such as the UK, where profitability was undermined by lower margins and high costs.
Trading profit from emerging markets was up just 4%, as China and Hong Kong underperformed. Australasia, which includes Australia and New Zealand, came to the party, with trading profit jumping 17%.
But Europe was star performer of all markets during the reporting period, with revenue and trading profit jumping 29% and 46%, respectively.
Bidcorp, which was unbundled from industrial conglomerate Bidvest in 2016, said the long-term growth fundamentals of the global food-service industry remained positive in the short term, although the economic outlook for many of the markets in which it operated was tough.
“Food inflation is abating erratically, cost inflation remains elevated driven by ongoing wage increases, and consumer spend will remain under pressure until interest rates start to decline,” the company said in a statement.
Bidcorp declared an interim dividend of R5.25 per share, up 19% from a year-ago period.
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