South African food services firm Bid Corporation (Bidcorp) said on Wednesday the sale of its UK logistics business was back on track and nearing completion, which would allow the group to focus on its main operations.
Bidcorp, which operates in Europe, United Kingdom, Australasia and emerging markets, has been trying to sell the loss-making UK Contract Distribution business for more than a year. In September, a potential unidentified buyer ditched plans to acquire the non-core unit.
The group said in its annual results statement that the sale was “hopefully nearing finalisation” but did not give details.
“We are optimistic that the distraction of dealing with the discontinued operations will be behind us into financial year 2020, enabling the group to be fully focused on its core foodservice markets,” it said.
Its UK PCL distribution unit’s dairy business also ceased operating in April when it was acquired by Scandinavian dairy firm Arla Foods, Bicorp said.
In the year to June 30, Bidcorp spent R847.1 million ($55.60 million), compared with R1.2 billion in 2018, on acquiring a remaining minority stake in D&D in Italy, Igartza food service in Spain and Punjab Kitchen, rebranded as Food Solutions, in Britain.
“Our lower acquisition costs reflect fewer acquisitions in the year as management’s focus was on bedding down the various investments made in previous periods,” Group Chief Executive Bernard Berson said in the statement.
“We retain adequate headroom for further organic and acquisitive growth, and we are still well capitalised.”
Bidcorp, which was spun off from Bidvest and separately listed in 2016, posted headline earnings per share (Heps) from continuing operations of 1 443.6 cents in the year to June 30, up from 1 282.9 cents a year earlier.
In constant currency terms, Heps rose 7.7%. Heps is the main profit gauge in South Africa and strips out certain one-off items.
The group, which supplies hotels, restaurants and industrial caterers, said revenue rose 9.8% to R129.3 billion ($8.49 billion), supported by a positive trading performance in its developed markets.
Its shares were up 4.22% at R315 at 0936 GMT.
“Trading in most of our geographies remained positive despite persistent low food inflation and moderate economic growth. Our good revenue growth and better gross margins helped offset cost pressures, particularly labour, energy and fuel,” Berson said.
In Europe, the Eastern Europe business showed record revenue growth but has experienced wage pressures.