South African industrial giant going strong

Bidcorp posted strong results for the last six months of 2024, as the company managed to grow its revenue and trading profit despite some headwinds.

Bidcorp’s results for the six months through December 2024, released on Wednesday, 26 February 2025, revealed solid results for the food distributor.

Bidcorp is an international broad-line foodservice group, listed on the JSE, that is present in developed and developing economies in five continents.

The company has performed well over the past few years, with strong profitability and revenue growth, and these latest results are no exception. 

The company’s revenue grew by 3.6% to R117.9 billion, while trading profit is up 6.8% to R6.3 billion.

Concerningly, the company’s overall cost of doing business increased to 18.8%, driven primarily by higher cost inflation, which is persistently tracking higher than food inflation. 

However, Bidcorp said the increase in its gross margins has more than offset the increased cost. 

It noted that labour costs, which account for around two-thirds of the cost base, remained high as relatively full employment in many countries creates competition for a scarce pool of talent. 

“We continually look at innovative solutions. However, we are efficient and operate a high-service model in growing markets,” it said.

The company’s earnings were also mixed. Headline earnings per share were up 6% to 1,221.6 cents, while earnings per share were down 2% to 1,120.7 cents.

The decline in earnings per share is largely due to currency fluctuations and Bidcorp’s loss from the sale of its German business.

The company incurred a non-cash loss of R450.8 million from selling its German operations.

This also saw Bidcorp’s profit for the period decline by just under 2% to R3.78 billion.

Most of the company’s divisions delivered strong performances in the six-month period.

In the UK, Bidcorp’s trading profit is up 30.4% due to contract renewals and an acquisition to supplement the regional independent activities.

The company’s Emerging Markets segment reported an excellent performance, particularly in South Africa.

However, the company said activity in Greater China remains subdued by the macro environment.

In Europe, the company recorded revenue and profit growth despite economic challenges.

The company said the trading conditions in Australasia – Australia and New Zealand – were challenging, ut both regions delivered solid performances.

“Our global teams are to be commended for adapting to prevailing market conditions and, again, successfully delivering our strategic foodservice focus,” the company said. 

“Our entrepreneurial spirit and decentralised operating model continued to contribute to our success.”

Bidcorp also made some notable acquisitions in this period, including Turner and Price in the UK and Dairy Innovation in South Africa.

This saw a slight drop in the company’s free cash flow, although this is within expectations. 

Bidcorp used R2.7 billion in working capital, which is in line with normal seasonality. 

However, this was R800 million less than in H1 2024, thanks to a lower average rand exchange rate, even with higher business activity.

Bidcorp declared an interim cash dividend of 560 cents per share, up 6.7% from the comparative period in 2023.