Bidcorp, the food service solutions group operating in 35 countries, saw headline earnings a share (Heps) soar 75.3 percent to 668 cents in the six months to December 31 as economies started to bounce back from pandemic lockdowns, chief executive Bernard Berson said yesterday.
The group, which operates in Australasia, the UK, Africa, Europe, Asia, the Middle East, and South America, declared a 300 cents dividend - it did not declare an interim dividend in 2021, and its final payout for 2021 was 400 cents.
Currency volatility reduced the rand-translated results by 10.8 percent with constant currency heps at 709.1 cents.
Berson said in an interview trading bounced back strongly in the interim period but slackened in November and December with the arrival of the Omicron variant. While the slower trading continued into the first few weeks of January, February trading was “relatively good again”.
He said all things being equal, he believed the rebound in trading should continue into the second half of the 2022 financial year as global economies, apart from China and Hong Kong, that might still face lockdowns, started to normalise after the pandemic, with for example travel and business travel resuming.
He said they were, however, dealing with faster rising costs in nearly every aspect of the business such as fuel and electricity, food products, properties, vehicles and staff.
He said Bidcorp had also been impacted by “The Great Resignation”, and with less people travelling to other countries for work, the group was also dealing with staff shortages and churn across the full spectrum of skills.
He said their business model had, however, been proven through the pandemic. Revenue increased 18.1 percent to R71.6 billion in the period. Trading profit was up 52.9 percent to R3.4bn. Cash from continuing operations increased 40.5 percent to R4.5bn.
Berson said a good global team, an entrepreneurial and decentralised operating model and a loyal customer and supplier base had boosted the results.
The economic rebound in July through September 2021 had resulted in a record financial performance in the first quarter driven by Europe, the UK and Emerging Markets.
Australia and New Zealand, which had performed exceptionally well in the 2021 financial year, were impacted by Covid restrictions for most of the half-year.
Demand in the hospitality sector was robust, but remained impacted by pandemic restrictions, while most activity aligned to business travel and office catering remained depressed.
Work-from-home requirements or a hybrid thereof remained in place in many markets, which impacted national customers with exposure to major institutions located in large capital cities.
Reduced international tourism had been offset a bit by staycations and increased suburban and rural activity. Non-discretionary demand from hospitals, aged care, prisons, military, and government departments was stable but at or below pre-Covid levels.
Further to the fraud uncovered in a division of Bidcorp’s Angliss Greater China business in June 2021, additional forensic work concluded by the end of December 2021.
“No further issues have come to light while criminal and civil proceedings have begun. We remain confident of some future recoveries,” said Berson.
He said growth would be achieved by focusing on the appropriate customer mix between independent and national while maintaining an appropriate range of products; via in-territory bolt-on acquisitions and via strategic acquisitions to enter new markets.
Rising costs were limiting customers’ ability to grow and presented an opportunity for further investment into value-add product preparation, he said.
Market share gains were evidenced by pre-Covid revenues in most businesses despite large segments of the hospitality industry still operating well below pre-pandemic levels.
BUSINESS REPORT ONLINE