Bidvest shrugs off weak economy
The group’s businesses have performed strongly
Bidvest has brushed aside the country’s sluggish economic growth, with almost all of the services, trading and distribution group divisions performing strongly in the four months to October 30.
Bidvest’s voluntary update indicates that the company is set to report a strong set of results in March 2019 for the six months to end-December.
Bidvest said its various businesses have withstood a combination of sluggish economic growth, political instability and waning business confidence.
“We are pleased with our year-to-date performance and we remain confident that our resilient business model, tight expense control, the measures we have taken to ensure we remain relevant and competitive, as well as increased volumes in certain sectors and acquisitions will enable us to deliver acceptable growth in [the 2019 financial year],” CEO Lindsay Ralphs said on Wednesday.
The group, which is still holding on to its minority stakes in Adcock Ingram (38.5%) and Comair (27.2%), said its financial position and balance position gives it the capacity to pursue growth locally and internationally.
Bidvest said the services business, which accounted for 63% of Bidvest’s trading profit in the 2018 financial year, benefited from the contribution of its recent acquisition, Ireland-based management services group Noonan.
The 2017 acquisition of Noonan gives Bidvest, whose operations are mainly in SA, a presence in the UK and Irish markets. Bidvest said the services business operated in a challenging and price-sensitive market.
Analyst Ian Cruickshanks said on Wednesday that Bidvest has managed to survive constrained GDP and low business confidence because it is a market leader in its respective sectors. “It also helps that they have stable and competent management. Bidvest should be part of any long-term balanced portfolio.”
Bidvest said its R1bn liquefied petroleum gas import and storage facility in Richards Bay, on the northern KwaZulu-Natal coast, is on schedule. It said the commissioning of the last six multipurpose tanks will be completed by end-2018.
Bidvest’s share price rose 2% to R203.30 on Wednesday.