REG - Bidvest Group (UK) - Half-year Report

InvestecAnnouncement

06/03/2023 08:15

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RNS Number : 9040R  Bidvest Group (UK) PLC (The)  06 March 2023

Tickers: 52AX, 51NI

The Bidvest Group (UK) PLC

3.625% SNR NTS 23/09/26

 

The Bidvest Group
Limited

(Incorporated in the Republic of South Africa)

(Registration number 1946/021180/06)

Share code: BVT SJ

ISIN ZAE000117321

("Bidvest" or the "Company" or "guarantor")

 

UNAUDITED FINANCIAL RESULTS AND CASH DIVIDEND DECLARATION FOR THE SIX MONTHS
ENDED 31 DECEMBER 2022

 

SALIENT FEATURES

ZAR57.2 billion revenue, +14.0%

ZAR5.8 billion trading profit, +14.5%

ZAR7.3 billion cash generated by operations before ZAR5.5 billion investment
in working capital

ROFE 37.6%

HEPS 938.5 ZAcents, +15.3%

Normalised HEPS 983.4 ZAcents, +15.3%

Interim dividend of 437.0 ZAcents, +15.0%

Introduction

Bidvest delivered an impressive first half result by capitalising on growth
nodes within the agriculture, mining, renewable energy and travel and tourism
industries. Organic growth has been strong, notwithstanding various global
macro-economic pressures. The financial strength of the Group remains key to
successfully advancing and competing in these sectors, while also pursuing
overall strategic growth.

Trading profit grew by 14.5% to ZAR5.8 billion, with ZAR1.1 billion
contributed by the international operations. Robust cash generation of ZAR7.3
billion was delivered before investing ZAR5.5 billion in working capital.
Capital investment of ZAR1.5 billion was made into the operations to upgrade
facilities and maintain assets while ZAR2.3 billion was used for acquisitions.

The expansion of Bidvest's facilities management footprint into Australia,
effective 7 July 2022, delivered in line with expectations. Pleasingly, the
pipeline of strategic growth opportunities is active across the Group.

 

Financial overview

At the start of the financial year, against a backdrop of unprecedented
inflation, margin management was a key focus area. The team delivered with
both gross (29.4%) and trading profit (10.2%) margins remaining stable
compared to the prior period. This is commendable considering the inflationary
trading environment and incremental energy and distribution costs.

Despite an already high base, six out of the seven divisions delivered real
trading profit growth with many individual businesses producing record months
during the six months under review. The continuation of strong demand for
bulk, mineral and agricultural, commodities, as well as higher Liquid
Petroleum Gas (LPG) volumes, benefitted the Freight terminal operations, while
clearing and forwarding activity recovered strongly. The expected revival in
tourism volumes materialised, notwithstanding continued air travel capacity
constraints, resulting in excellent performances from the Group's travel and
hospitality-related businesses. Coming off record high bases, both Commercial
Products and Branded Products, delivered strong results as many of the
underlying businesses gained market share by trading in sought-after products,
while simultaneously managing margins well. The expected improved performance
from Financial Services materialised and margin discipline in Automotive
continued. Services International's largely unchanged financial result was
commendable, given the businesses realigning following the extraordinary
Covid-related work in the prior year, while augmented by the inclusion of BIC
for six months.

HEPS and Normalised HEPS(1), a measurement used by management to assess the
underlying business performance, grew by 15.3% to 938.5 cents and 983.4 cents,
respectively.

Return on Funds Employed (ROFE) was slightly down at 37.6% at 31 December 2022
(1H FY2022: 40.4%) given the working capital investment. Return on Invested
Capital (ROIC) of 16.3%, compares favourably to 15.5% as at 31 December 2021,
and remains above the Group's weighted cost of capital.

Group NAV grew from ZAR81.62 in the prior period to ZAR89.88 as at 31 December
2022.

((1) ) Normalised HEPS, which excludes acquisition costs and amortisation of
acquired customer contracts, is a measurement management uses to assess the
underlying business performance

Prospects

Activity in renewable energy, mining, agricultural, tourism and
hospitality-related sectors is expected to remain healthy. Planned investments
into alternative energy to mitigate the impact of the electricity crisis in
South Africa will continue. Consumer disposable income pressure is anticipated
to intensify throughout the calendar year. Demand for select bulk commodities
is expected to remain robust, supporting terminal activity in the southern
African ports. The improved performance from Financial Services should gain
momentum.

We will remain disciplined on margin generation, nimble in offering a
differentiated product and/or service offering and focused on expense
management as competition intensifies, together with declining economic
growth, suboptimal infrastructure as well as labour cost pressures.

The recent acquisitions are performing in line with expectations and growth
opportunities have been identified to add incremental value. Several corporate
action opportunities are currently being actively pursued and discussions
continue with regards to capital intensive partnership opportunities in South
Africa. The Group balance sheet remains able to support its growth strategy.
 

 

Dividend declaration

In line with the Group dividend policy, the directors have declared an interim
gross cash dividend of 437.00000 ZAcents (349.60000 ZAcents net of dividend
withholding tax, where applicable) per ordinary share for the six months ended
31 December 2022 to those members registered on the record date, being Friday,
31 March 2023. 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 SJ
 ISIN                                  ZAE000117321
 Company registration number           1946/021180/06
 Company tax reference number          9550162714
 Gross cash dividend amount per share  437.00000
 Net dividend amount per share         349.60000
 Issued shares at declaration date     340 274 346
 Declaration date                      Monday, 6 March 2023
 Last day to trade cum dividend        Tuesday, 28 March 2023
 First day to trade ex-dividend        Wednesday, 29 March 2023
 Record date                           Friday, 31 March 2023
 Payment date                          Monday, 3 April 2023

 

Share certificates may not be dematerialised or rematerialised between
Wednesday 29 March 2023 and Friday 31 March 2023, 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 half year 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/2023/jse/isse/BVT/1HFY2023.pdf

The full announcement is available for viewing on the Company's website and
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. at no charge, during normal business hours from 6
March 2023.

The information in this announcement has been extracted from the Interim
Condensed Consolidated Financial Statements. The results have not been audited
or reviewed by the Group's auditors and have been prepared under the
supervision of the Chief Financial Officer, MJ Steyn, BCom CA (SA).

Date: 6 March 2023

Johannesburg

Board of Directors

For additional information, please contact:

Ilze Roux, Bidvest Executive: Corporate Affairs, +27 11 772
8745, ilze.roux@bidvest.co.za

 

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