Bidvest South Africa Battles Falling Spending in ‘Tough’ QuarterKamlesh Bhuckory
Bidvest Group Ltd., South Africa’s second-biggest company by revenue, said the three months through September had been “very tough” in its domestic market as consumer spending slowed and labor unrest stifled growth.
“Anything that has to do with consumer spend is tough right now,” Lindsay Ralphs, chief executive officer of Bidvest’s South Africa unit, said in an interview in Johannesburg today. The company operates a range of businesses including food service, security, health care and car sales.
The South African central bank last week cut its forecast for economic growth to 1.5 percent, the latest reduction from the 2.8 percent expansion projected in January. The country has been hit by protracted labor unrest including a five-month strike in the platinum industry and a four-week stoppage in manufacturing. A weakening rand has helped drive inflation above the upper end of the central bank’s 3 percent to 6 percent target band.
Bidvest South Africa accounted for about 44 percent of the company’s sales for the 12 months ending June, according to a Sept. 1 earnings statement. Any recovery in the market would be “uneven,” according to Ralphs, while the collapse of African Bank Investments Ltd. in August had tightened the supply of credit to consumers.
Bidvest shares fell as much as 2.7 percent, the biggest intraday decline since Feb. 5, and traded 2 percent lower at 283.14 rand as of 1:20 p.m. in Johannesburg. The FTSE/JSE Africa All-Share Index is down 1.2 percent.