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

InvestecAnnouncement

04/03/2024 08:15

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RNS Number : 3339F  Bidvest Group (UK) PLC (The)  04 March 2024

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 ENDED 31
DECEMBER 2023

 

SALIENT FEATURES

ZAR62.2 billion revenue, +8.8%

ZAR6.5 billion trading profit, +11.8%

Improved trading profit margin of 10.5%

Cash generated by operations almost doubled to ZAR3.7 billion after ZAR4.5
billion investment in working capital

ROFE 38.3.%

HEPS 987.9 ZAcents, +5.3%

Normalised HEPS 1 051.3 ZAcents, +6.9%

Final dividend of 467 ZAcents, + 6.9%

Introduction

Bidvest has delivered a good result against a pedestrian trading backdrop,
characterised by stubbornly high inflation, peak interest rates and minimal
underlying economic growth.

Pleasing organic operational growth has been achieved, largely through new
business secured, and good gross margin and expense management. We leveraged
our broad service and product basket to add value to customers. Higher
interest costs moderated the bottom-line performance.

We successfully executed on our pipeline. Numerous acquisitions concluded in
South Africa, Australia, the United Kingdom and Singapore, added to our
geographic footprint in hygiene services, enhanced geographic scale in
facilities management and augmented our product and service offering.

Pursuing our strategy of building a sustainable business for the long-term,
enables us to increase levels of employment, improve livelihoods, invest in
skills and technology, while reducing our environmental footprint and
contributing to building South Africa.

Financial overview

Five of our seven divisions reported double digit trading profit growth.

Modest top-line growth, together with active gross margin management and
strong expense control, culminated in 11.8% trading profit growth. This is
commendable especially in the current very competitive and price conscious
market, with close to double digit wage inflation.

Cash generated by operations almost doubled. We spent ZAR3.2 billion on
acquisitions, invested in maintaining and growing our asset base, as well as
awarded our shareholders with a higher dividend. Despite this, our gearing
increased only modestly year-on-year. The coveted cash generative nature of
the Group remains firmly intact.

HEPS and Normalised HEPS(1), a measurement used by management to assess the
underlying business performance, grew by 5.3% and 6.9%, respectively. Return
on Funds Employed (ROFE(2)) remained stable at 38.3% since year end, a very
good outcome given the growth in working capital. Return on Invested Capital
(ROIC) of 15.8% compares to 16.3% in the prior year. Despite higher interest
rates, this remains well above the Group's weighted cost of capital.

Basic earnings per share (EPS) increased from 918.2 ZAcents to 960.8 ZAcents,
or 4.6%, mainly due to a strong operational performance diluted by
significantly higher net finance and acquisition charges as well as increased
amortisation on customer contracts in the current period.

Group NAV per share grew from ZAR89.88 in the prior period to ZAR100.08 as at
31 December 2023.

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

(2)       Trading income divided by net operating assets plus net
working capital

Prospects

Our scale, range of product and service offering, agility as well as
sector-leading innovation, ensure that our businesses remain in a strong
position to offer solutions and value-added propositions to customers,
existing and new, in a competitive global market.

Traditional seasonal trading trends appear to be re-establishing in bulk
commodity freight movement. This, together with the non-repeat of frenetic
renewable product purchases as well as ongoing weak vehicle demand, will
result in continued market pressures in the second half of the financial year.

We remain optimistic about the Group's ongoing growth trajectory as we pursue
pockets of opportunity in sectors such as travel and tourism. Recent strong
business wins will contribute fully and management will also remain vigilant
with regards to margin and expense management.

Our acquisition pipeline remains strong and we are actively pursuing a number
of acquisition opportunities.

We will continue to advance our strategy and maintain our financial
discipline, while collaborating with all stakeholders to build and support a
brighter future.

Dividend declaration

In line with the Group dividend policy, the directors have declared an interim
gross cash dividend of 467 ZAcents (373.60000 ZAcents net of dividend
withholding tax, where applicable) per ordinary share for the six months ended
31 December 2023 to those members registered on the record date, being
Thursday, 28 March 2024. 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
 ISIN:                                            ZAE000117321
 Company registration number:                     1946/021180/06
 Company tax reference number:                    9550162714
 Gross cash dividend amount per share (ZAcents):  467.00000
 Net dividend amount per share (ZAcents):         373.60000
 Issued shares at declaration date:               340 274 346

 

 Declaration date:                Monday, 4 March 2024
 Last day to trade cum dividend:  Monday, 25 March 2024
 First day to trade ex-dividend:  Tuesday, 26 March 2024
 Record date:                     Thursday, 28 March 2024
 Payment date:                    Tuesday, 2 April 2024

Share certificates may not be dematerialised or rematerialised between Tuesday
26 March 2024, and Thursday 28 March 2024, 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/2024/jse/isse/BVT/1HFY2024.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 Bank Limited, 100 Grayston Drive,
Sandown, Sandton, 2196, South Africa at no charge, during normal business
hours from Monday, 4 March 2024.

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: 1 March 2024

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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