New initiatives

Pre-listing preparations were a focus area for all businesses.

Namsov continued its investment in fleet upgrades while looking to derive benefit from last year’s investment in an Angolan inshore fishing business.

In recent years we have invested NAD50 million to upgrade our fleet. In addition, NAD3 million was invested in the refurbishment of the Walvis Bay pilchard canning factory taken over during the 2007 acquisition of United Fishing Enterprises.

Risks to the business

The risk common to all our businesses relates to the scarcity of skilled personnel and the challenge of retaining the people we develop in a country crying out for trained staff.

Organisational culture

Ahead of our planned listing a strong team dynamic has built up across the division. The feeling is summed up by the Group’s Proudly Bidvest strapline and is driven in all units by the conviction that we are breaking new ground and contributing to the economic development of our country.

Future

Precise performance is dependent on economic recovery. We remain confident of continued growth as many of our businesses are well positioned to benefit from government’s increased infrastructure spending while the growth of the neighbouring Angolan economy creates opportunities in several spheres.

BIDVEST FISHERIES

Excellent horse mackerel catches helped take revenue and trading profit to record levels. Market prices for fish remained firm in the first half of the year. Sales are mostly denominated in US dollars and favourable exchange rates proved helpful.

Results confirm the benefit of taking responsible measures to better manage marine resources. The horse mackerel resource appears to have recovered well.

Our pilchard canning factory reopened in April and by our year-end had canned our portion of the 2009 pilchard total allowable catch. The full financial benefit will not be realised until the new financial period. However, the benefit in human terms was soon apparent as we created 700 seasonal jobs.

Our investment in inshore fishing in Angola will not yield returns for another year, but early indications are positive.

Skills shortages remain a concern. Namibia does not train seaman to a senior level and we currently recruit officers and senior crew from the former USSR. This is unsustainable. We are introducing our own training programme with South African support.

In the coming year, we plan to replace one of the oldest vessels in our mid-water trawl fleet at an estimated cost USD20 million.

Fish prices fell rapidly early in calendar 2009 and were then depressed in our traditional markets by currency fluctuations and changes in import duties. Some recovery is anticipated in the second half of calendar 2009. We continue our cost control programme, notably through conversion of our fleet to enable operation on less expensive fuel.

We are looking to a significant return from our reopened canning factory and will derive growing benefit from upgrades to our fleet. Returns on our Angolan investments are projected when new infrastructure is commissioned in January 2010.

BIDVEST COMMERCIAL HOLDINGS

Pleasing results were achieved. Some teams doubled their trading profit.

Manica Group Namibia grew trading profit by 51% off the back of strong demand for freight and logistic solutions and strong growth in ship and rig repairs in Walvis Bay.

Bid Industrial and Commercial Products (including strong brands such as Waltons, Kolok, CN Business Furniture and Voltex) saw a 55% increase in trading profit on higher demand from mining industry and infrastructure projects.

Within Bidserv, Rennies Travel began well, but was hit by falling levels of business travel following, among other factors, a temporary suspension of diamond production. Konica Minolta began slowly, but as the year progressed benefited from staff rightsizing through natural attrition.

Blue Marine had a difficult year and trading profit remained flat. Improvements are expected as internal inefficiencies are addressed. Trading profit increased substantially at Bid Auto (Budget Rent a Car) due to improvements in most key performance factors and good profits from the sale of vehicles at the end of their rental period. Several businesses have gained market share and have maintained above-average growth while a brand such as Waltons has benefited from an expanded geographic footprint. Bidcom companies continue to fight for a larger slice of their markets, but meet increasingly stiff resistance from competitors. Even so, continued growth will be sought in 2010.