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Bidvest first-half profit gains

As food-service sales climb.

Bidvest Group, South Africa’s second-biggest company by revenue, posted a 3% increase in fiscal first-half profit as growth in catering and European operations offset slower-than-anticipated expansion in Africa.

Net income for the six months through December rose to R2.77 billion ($237 million) from R2.69 billion a year earlier, the Johannesburg-based company said in a statement on Monday. Revenue gained 17% to R104 billion, boosted by a 21% increase in food services, its biggest unit.

“From a trading perspective, the company has done particularly well, especially in the overseas operations,” CEO Brian Joffe said on a conference call from Johannesburg. The foodservice businesses “reflected good performances in most operations.”

South Africa, the company’s second-biggest unit, “is still burdened by lots of baggage that is floating around our economy,” Joffe said. Finance Minister Nhlanhla Nene last week lowered his forecast for economic growth this year to 2% from 2.5% with a jobless rate of almost 25%.

Bidvest raised its half-year dividend by 7 % to 426 cents a share. The stock fell 1.5% to R317.01 at 11:11 am in Johannesburg, paring its gain to 4.3% this year. That compares with a 7.3% gain in the 167-member FTSE/JSE Africa All Share Index.

Adcock offer

Bidvest, which has businesses from catering to car dealerships and freight, last week offered to buy the 65.5% of Adcock Ingram Holdings shares it doesn’t already own. Joffe expects about 10 percent of shareholders to accept the offer.

Bidvest, which is expanding in the UK and Italy, is also looking for acquisitions in Ghana, Uganda, Tanzania and Zambia, Joffe said. The company isn’t planning to expand in Nigeria, he said.

In Africa outside its home market, Bidvest has “underestimated” the availability of infrastructure on which to build, Joffe said. “It’s been a bit of a slow process trying to get infrastructure up and running, and licenses and partnering with various people there.”

©2015 Bloomberg News

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