Bidvest Full-Year Profit Beats Estimates on Automotive Growth
Bidvest Group Ltd. (BVT), a South African company with interests ranging from food to cars, said full-year earnings rose 5.9 percent, boosted by rising profit at its automotive unit and growth outside its home market.
Headline earnings per share, which exclude one-time items, advanced to 15.61 rand in the 12 months through June, the Johannesburg-based company said in a statement today. That beat the 15.53 rand median estimate of eight analysts surveyed by Bloomberg. Sales rose 15 percent to 153 billion rand ($15 billion), compared with a 150 billion rand estimate.
Trading profit at Bidvest’s South African car unit advanced 28 percent, while the Johannesburg-based company also achieved growth in Asia-Pacific, Australia and Europe. The performance came even as demand weakened in many markets, Bidvest said.
“Economic confidence in many of the geographies within which we operate our global business is fragile and investors have become risk averse to emerging markets,” the company said.
Bidvest, which sponsors U.K. soccer team Sunderland Football Club, earns 61 percent of its trading profit in South Africa, where economic growth has been hurt by labor strikes, high inflation and a weak rand. Headline earnings per share were boosted 3.6 percentage points by the South African currency, which has declined 17 percent against the dollar this year, the worst performer this year of 16 major currencies tracked by Bloomberg.
“Weakness in the rand and the likely spike in inflation are expected to present some cost pressures, but these pressures also give rise to trading opportunities,” the company said.
Bidvest shares have outpaced the 165-member FTSE/JSE Africa All-Share Index (JALSH) this year, gaining 12 percent. The stock rose 0.9 percent to 241.99 rand at the close in Johannesburg on Aug. 23, valuing the company at 79.3 billion rand. Bidvest raised its dividend by 16 percent to 720 cents per share.
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