Bidvest first half earnings up 5% despite 'pedestrian' trading backdrop
Diversified industry group Bidvest reported a 5% rise in headline earnings for the first half, with five of its seven divisions reporting double-digit trading profit growth.
The group, which is seen as one of the proxies of the SA economy, given its extensive footprint across services, freight, consumer and commercial products, financial services and automotive sectors, reported a 4.2% increase in after-tax profit to R3.46bn.
Revenue grew 8.8% to R62.2bn in the six months to end-December and headline earnings per share (HEPS) amounted to 987.9c, a rise of 5.3%. An interim dividend of 467c was declared, up 6.9%.
The group said on Monday that pleasing organic growth was achieved largely through new business it has secured, and good gross margin and expense management despite what it described as a “pedestrian trading backdrop, characterised by stubbornly high inflation, peak interest rates and minimal underlying economic growth”.
The group concluded several acquisitions in SA, Australia, the UK and Singapore, which added to its geographic footprint in hygiene services, enhanced geographic scale in facilities management and augmented its product and service offering.
Looking ahead, the group said 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 and 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,” it said.
Recent strong business wins will contribute fully and management will also remain vigilant about margin and expense management.
“Our acquisition pipeline remains strong and we are actively pursuing a number of acquisition opportunities,” it said.
