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Bidvest First-Half Profit Gains 19% as Food Services Grow

Bidvest Group Ltd., South Africa’s second-biggest company by revenue, said first-half earnings rose 19 percent led by improved operations in catering and the conglomerate’s domestic market.

Net income for the six months through December increased to 2.69 billion rand ($248.2 million), compared with 2.26 billion rand a year ago, the Johannesburg-based company said in a statement today. Revenue grew 19 percent to 89.6 billion rand.

“Bidvest South Africa achieved good organic growth while the company’s food-services results reflected improved performances in all operations,” Chief Executive Officer Brian Joffe said in a separate e-mailed statement.

Bidvest, which sponsors English Premier League soccer team Sunderland and The Wanderers cricket stadium in Johannesburg, has businesses from catering to car dealerships. Food services accounted for 55 percent of half-year sales, according to the statement. While revenue and profit outpaced economic growth in South Africa, the company said it remains cautious for the full-year ending June.

“Economic conditions remain challenging and volatile,” Joffe said. “Trading conditions in South Africa expect to remain tough, compounded by the impacts of rising inflation and declining demand.”

Bidvest shares gained as much as 2 percent and traded 1 percent higher at 247.61 rand as of 9:33 a.m. in Johannesburg, the highest on an intraday basis since Feb. 5.

Robust Financials

The company’s net debt rose to 8.2 billion rand, compared with 6.2 billion rand a year ago. “The Group’s financial position remains robust,” Joffe said. “Bidvest’s attitude to gearing remains prudent while retaining adequate headroom to accommodate Client acquisition opportunities.”

Bidvest said last month it built a 34.5 percent stake in Adcock Ingram Holdings Ltd. to become the drugmaker’s biggest shareholder. Joffe was named chairman of South Africa’s biggest supplier of hospital products yesterday. The 3.2 billion rand deal adds to acquisitions of a minority shareholding in support services company Mvelaserve and about 72 percent in Home of Living Brands Ltd.

The company will seek further acquisition opportunities in consumer products, where the strategy is to increase exposure to distribution, Joffe said.

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