Wrap Text
Unaudited Financial Results and Cash Dividend Declaration for the six ended 31 December 2024
The Bidvest Group Limited Bidvestco Limited
(Incorporated in the Republic of South Africa) (Incorporated in the Republic of South Africa)
(Registration number 1946/021180/06) (Registration No. 1966/011512/06)
Share code: BVT Company code: BIBIDV
ISIN ZAE000117321 LEI: 3789004678BDF4374378
("Bidvest" or "the Company" or "the Group") ("Bidvestco" or the "Issuer")
UNAUDITED FINANCIAL RESULTS AND CASH DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
SALIENT FEATURES
- R64.5 billion revenue, +6%
- Flat trading profit of R6.3 billion
- Trading profit margin of 9.7%, down 66bps
- R4.5 billion cash generated by operations, +18%
- ROFE 37.9%
- Group HEPS 1 015.5 cents, +3%
- Group Normalised HEPS 1 057.7 cents, +1%
- Continuing operations HEPS 941.3 cents, -1%
- Flat continuing operations Normalised HEPS 1 011.4 cents
- Interim dividend of 470 cents, +1%
Introduction
The Group delivered a decent result for the six months ended 31 December 2024 despite the expected headwinds in bulk commodity movements and
renewable energy product sales, as well as an unexpected weak Adcock Ingram (Adcock) performance.
The majority of Bidvest businesses generated substantial and consistent profits, with four of the six divisions reporting trading profit growth.
This performance was driven by continued demand for everyday essential products and services supplied by the Group across most sectors of the
economy. New business growth, additional tank capacity and bolt-on acquisitions helped to mitigate the impact of price sensitive customers and
weaker than anticipated discretionary consumer spend.
Pleasingly, free cash generation was positive with almost half a billion rand increase year on year in this seasonally weaker interim period.
This resulted in a flat net debt/EBITDA ratio even though we continued to execute on our growth strategy, concluding six bolt-on acquisitions.
Bidvest Bank, FinGlobal and Bidvest Life are reported as discontinued operations. As announced in December 2024, we are pleased with the
respective signed offers that make both financial and strategic sense whilst also providing continued employment for employees. The conditions
precedent are mainly regulatory in nature.
Financial overview
Group revenue grew 5.7% to R64.5 billion (1HFY2024: R61.1 billion). A slightly lower overall gross profit margin of 27.6% was achieved,
due largely to the divisional mix shift. Individually, all but two divisions held or improved their margins. Expenses were well controlled
across the divisions.
Four out of the six divisions reported good trading profit growth. The expected contraction in Freight and Commercial Products' trading profit
was primarily due to no maize export volumes handled and cycling of the elevated renewable energy sales base. The unexpected Adcock result was
due to declining consumer spend, reduced inventory holdings in the pharmaceutical wholesale channel and the knock-on effect of factory
under-recoveries.
Cash generated by operations after working capital increased by an excellent 18.4% to R4.5 billion. The resultant cash conversion ratio improved
from 33.4% to 44.8%.
On a FY2024 pro-forma basis, the capital structure of the Group's continuing operations yielded a higher than overall Return on Funds Employed
(ROFE(2)), but a lower Return on Invested Capital (ROIC). At 31 December 2024, as a result of the flat interim trading profit and continued
capital investment in the business, ROFE and ROIC declined to 37.9% (1HFY2024 40.9%) and 14.4% (1HFY2024 15.8%), respectively on a like-for-like
basis. ROIC remains above the Group's weighted cost of capital.
Continuing operations HEPS and Normalised HEPS(1), a measurement used by management to assess the underlying business performance, contracted
by 1.1% and 0.4%, respectively.
Group basic earnings per share (EPS) increased from 960.8 cents to 1 016.1 cents, or 5.8%, the result of a 1.3% contraction in continuing
operations EPS and a significant increase in profit after tax from discontinued operations as depreciation and amortisation was suspended
in terms of IFRS and healthy trading profit growth across the three entities.
Group HEPS increased by 2.8% to 1 015.5 cents. A net impairment recognised on the disposal group held-for-sale in the prior period moderated
the growth.
Group NAV per share grew from R100.08 in the prior period to R108.61 as at 31 December 2024.
(1) Normalised HEPS, which excludes acquisition costs, amortisation of acquired customer contracts and the impact of one-off taxation events,
is a measurement management uses to assess the underlying business performance
(2) Trading income divided by net operating assets plus net working capital
Prospects
We remain confident in our clearly defined strategy and that our diverse portfolio of businesses, as a collective, can successfully navigate
the environments we operate in. Trading conditions are constrained and rapidly changing, making it more important than ever to deliver value
to customers, maintain innovation and be nimble. We will remain focused on what we can control and will continue to contribute to structural
advancement in our home base.
To date, structural reform frameworks and ambitions relating to South Africa's infrastructure build have not translated into basic infrastructure
spend and increased demand. The projected spend and envisaged opportunities pose exciting growth prospects for the Group over the medium- to
long-term. What remains outstanding is action and project mobilisation.
Domestically, the beneficial impact of lower interest rates and inflation should ease pressure on consumer spend, but broad economic activity
is expected to remain tight in the immediate future until pro-growth initiatives are implemented. Contractual business will remain healthy while
order books and contract pipelines across the Group are encouraging.
Offshore, geoeconomic fragmentation and elevated policy uncertainty make for tough economic backdrops and sizeable labour-related increases will
need to be recovered from customers. The annuity nature of these operations and the increased use of technology will contribute to defensiveness.
The bolt-on acquisitions will continue to add incremental value and restructure processes in several businesses will better align cost bases to
demand changes.
We are vigorously working towards closing the financial services disposal transactions, whilst pursuing a handful of bolt-on
acquisitions. Addressing upcoming debt maturities proactively is also receiving focused attention.
We continue to seek operational excellence and focus on free cash generation while simultaneously shaping our portfolio for the future and
creating social value for our own and surrounding communities.
Dividend declaration
In line with the Group dividend policy, the directors have declared an interim gross cash dividend of 470 cents (376.00000 cents net of dividend
withholding tax, where applicable) per ordinary share for the six months ended 31 December 2024 to those members registered on the record date,
being Friday, 28 March 2025. 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 (cents): 470.00000
Net dividend amount per share (cents): 376.00000
Issued shares at declaration date: 340 274 346
Declaration date: Monday, 3 March 2025
Last day to trade cum dividend: Tuesday, 25 March 2025
First day to trade ex-dividend: Wednesday, 26 March 2025
Record date: Friday, 28 March 2025
Payment date: Monday, 31 March 2025
Share certificates may not be dematerialised or rematerialised between Wednesday 26 March 2025, and Friday 28 March 2025, 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/2025/jse/isse/BVT/1HFY2025.pdf.
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: 3 March 2025
Johannesburg
Equity sponsor: Investec Bank Limited
Debt sponsor: Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 03-03-2025 07:15:00
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