Bidvest reports record trading profit

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Bidvest said the demand for its products and services began normalising towards the tail end of the reporting period.
Bidvest said the demand for its products and services began normalising towards the tail end of the reporting period.

Industrial giant Bidvest has reported its highest-ever trading profit in its automotive, branded products, commercial products and services divisions.

The group, which on Monday released its results for the year ended 30 June 2021, said its trading profit grew by 48% to R7.9 billion and its operations generated R13.6 billion in cash.

Its normalised headline earnings per share from continuing operations rose by almost 26% to 292c. Bidvest declared a total dividend of 600 cents.

The company’s services division provides solutions such as security, facility management and aviation services. Its automotive division is made up of retail, vehicle assistance and vehicle and online auctioneering. It also offers commercial products include protective clothing and equipment, plumbing and bathroom products as well as branded products for office use, niche packaging and pharmaceuticals, through its subsidiary Adcock Ingram.

Bidvest said the demand for its products and services began normalising towards the tail end of the reporting period, exceeding expectations in many instances. The performance of its commercial products was aided by the division’s market share gains, improved factory recoveries and expense management.

In its automotive division, Bidvest said its focus on margins and not volume, as well as improving its efficiency and managing tis expenses, resulted in profit growth, despite a decrease in vehicle demand.

"Branded Products' result, which includes (pharmaceutical group) Adcock, was good considering the significant demand disruption caused by the hybrid way of working and learning, and no flu season," said Bidvest.

The company said good investment returns had played a role in the "reasonable" performance of its financial services business. Its UK and Spain hygiene services provider, PHS, performed beyond expectations, while in South Africa the services business also reported good results, despite the impact of the Covid-19 lockdown, such as travel bans. 

Bidvest CEO Mpumi Madisa said: "These pleasing financial results reflect the success in achieving our planned strategic objectives, increased market share and organic growth in key sectors. It also follows the successful conclusion of the disposal of non-core assets, which started after the unbundling of the foodservices businesses, and has resulted in cumulative proceeds of more than R4 billion since FY 2017."

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