Diversified industrial group Bidvest is not looking to make any big acquisitions in the new financial year after completing more than 20 deals in the past two years.
In the year to end-June, the group concluded nine acquisitions across SA, the UK and Australia.
The group’s deal-making activities culminated in the purchase of Citron Hygiene, giving it a foothold in North America.
Bidvest CEO Mpumi Madisa said the group aimed to bed down its recent purchases and was excited by the possibilities Citron presented.
“After two years of significant M&A activity, Bidvest executed almost all transactions in the proactively built pipeline,” Madisa said.
“The focus is being maintained on ensuring these businesses deliver on their growth potential and generate strong operational cash flow.”
Revenue for the year was up 5% at R126.6bn and trading profit was 1% higher at R12bn.
Headline earnings per share (HEPS) from continuing operations was down 3% at 1,759.5c, and 2% lower for total operations. The group reported a 6% rise in cash generated by operations, at R14.7bn.
Among its divisions, Bidvest said the earnings contraction in freight (10%) and commercial products (28.4%) continued into the second half.
However, it reported “exceptionally strong profit growth” in services SA (13.6%), services international (12.1%) and branded products (7.8%). Its automotive unit improved profitability and, excluding restructuring costs, delivered “an excellent result”. Adcock Ingram delivered a “commendable improved second half performance”.
The group said the successful acquisition of Citron provided a strategic platform for multiyear hygiene services growth in North America, while the awarding of a new 25-year concession in Richards Bay enabled further domestic investment in long-dated port terminal assets.
The group declared a final dividend of 453c per share, an increase of 1.3% year on year.
Bidvest said the recent announcements on the awarding of private sector rail concessions by Transnet boded well for the revitalisation of the rail sector.
The award of third-party access to 11 private operators across six rail corridors for 10 years demonstrated policy reform in action, and was an extremely positive occurrence for the overall supply chain in SA, it said.
While Bidvest is not directly affected by the new US trade tariffs, the conflict and tension, differing political and social values, and supply chain shifts are delaying badly needed improvement in the business and operating environment, as well as the consequential economic growth.
“Bidvest is sharpening its strategic positioning and agility to ensure more efficient operations and a cost base that aligns to the prevailing environment, while seeking growth nodes that support the group’s diverse portfolio, expertise and geographic footprint,” it said.
SA businesses would continue to benefit from the positive momentum in travel and tourism and growing demand for safe, reliable water. These are on the back of investments in capacity and expanded testing and compliance service capability, ongoing store rollouts and the introduction of new brands and innovative products.
Internationally, the broader service offerings in all territories presented unrivalled upsell and cross-sell opportunities, Bidvest said.
Further synergies would be extracted from the acquisitions concluded, while new territories provided an expanded growth opportunity, the group said.
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