Bidvest juggernaut gains momentum

The Bidvest Group delivered a strong performance for its financial year, with the company’s acquisition spree paying off. 

Bidvest released its results for the financial year ended 30 June 2024 on Monday, revealing good growth across its seven operating divisions. 

The company’s revenue grew 6.7% to R122.6 billion, with trading profit jumping 8.5% to R12.4 billion for the period. 

Five out of the seven divisions reported profit growth, with four delivering impressive double-digit increases. 

The remaining two divisions, Commercial Products and Automotive, faced headwinds due to the high renewables base and a declining new vehicle market.

During the past financial year, the company made its first move into the Asia-Pacific market with its hygiene business and doubled its Australian facilities management business. 

To ensure a strong pipeline for growth, Bidvest deployed almost R5 billion on eleven acquisitions and growth capital expenditure, both domestically and offshore. 

These investments added to its geographic footprint in Australia and Singapore, with the company seeing strong growth in Asia. 

Considering its acquisition-heavy approach, Bidvest has maintained an impressive return on funds employed of 37.3%, albeit declining from 38.3%.

Basic earnings per share (EPS) increased by 6.6% from 1,757.3 cents to 1,873.8 cents, mainly due to good operational performance moderated by higher net finance and acquisition charges. 

Cash flow from operating activities grew strongly by 18.7%, which is more than double net income growth after the company paid more to its equity and debt capital providers.

Bidvest declared a final dividend of 447 cents per share.

The company expects its strong performance to continue as positive sentiment in South Africa drives organic growth, and market conditions in all its territories improve as inflation comes down. 

Following the formation of a Government of National  Unity (GNU), there are strong signs of a significantly enhanced business-friendlier environment in South Africa, it said. 

Reforms in the electricity and logistics sectors are critical to unlock structurally higher and inclusive economic growth in our home base.

“It is, therefore, pleasing that the recent performance of SA’s national energy provider, Eskom, has exceeded all forecasts and is starting to restore confidence in business and society, which is urgently needed to support future investment in the country.” 

The imperative now is to accelerate energy transition reforms, ensure rapid transmission expansion, reform the electricity distribution industry, and continue expanding new generation capacity, Bidvest said. 

However, reforms at Transnet have not occurred at the same pace, nor have they had the same effect. While the company is making progress, Bidvest urged further intervention. 

This remains at the core of unlocking value for the country’s entire supply chain and ensuring sustainable economic growth.