Tough conditions have had bad effect on trading profit, Bidvest says

Services, trading and distribution group Bidvest says trading profit growth has slowed amid tough conditions in the industrial and infrastructure sectors.

Bidvest, whose brands include Rennies Travel and motor retailer Bidvest McCarthy, said on Friday its operating performance in the 10 months to end-April "has been acceptable".

"The constrained trading environment persisted as activity levels were markedly lacklustre in the run-up to the national elections in May. This is evident in the GDP contraction in the first quarter of 2019," it said.

The group, which is led by CEO Lindsay Ralphs, said trading profits had continued to grow, "albeit at a slower pace than that reported in December 2018".

In the six months to end-December, Bidvest’s trading profits grew 6.3% to R3.3bn.

The group says while its annuity-type businesses are growing, its trading units that are focused on industrial and infrastructure-related sectors "find trading challenging".

"Agricultural volumes are well off the 2018 peak while bulk commodity volumes handled have grown," the group said.

But cost-control measures had helped keep margins stable.

Bidvest said it had made several bolt-on acquisitions, while also investing in its existing businesses.

"A few larger sized acquisitions are currently being pursued," it said.

The group said it had bought Johannesburg-based drone business UDS. According to UDS’s website, its services include environmental conservation, security services, infrastructure inspection and survey and stockpile management.

hedleyn@businesslive.co.za