Bidsport

The World Cup run-up helped drive continued growth in revenue and trading profit at Bidsport, the sports company in which Bidvest holds a 50% stake.

MSCSports secured the appointment as event manager of the Bidvest Goodwill Cup between Portugal and Mozambique, a World Cup warm-up game at Bidvest Wanderers.

Stellar Africa, a leading athlete management company, had a successful year. A number of South Africa’s leading soccer, rugby and cricket players are represented by this agency.

Acquisitive and organic growth is forecast. The World Cup has heightened awareness of the benefits of corporate involvement in soccer and sport in general. The business is also well positioned to derive benefit from excitement surrounding next year’s Rugby World Cup in New Zealand.

BIDVEST PROPERTIES
Property industry fundamentals remained challenging. The general economy slowed, rentals eased, but land prices remained high. The cost of servicing vacant land soared and capacity constraints at local municipal level continued to create delays, putting further pressure on development costs.

Long-term interest rates – the key factor governing likely future returns on property – remained high and threatened to move higher in view of international uncertainties.

Businesses remained acutely cost sensitive. This led to growing resistance by prospective tenants to higher rentals that reflect the full cost of new construction. New greenfields developments are becoming increasingly more difficult to bring in at market-related rentals. Increasing numbers of medium-sized construction companies closed down for lack of work.

In this environment, Bidvest Properties concentrated on the refurbishment of and extensions to existing premises. No new developments were undertaken. Two small properties that no longer fit the portfolio profile were sold.

A refurbishment of the Vulcan Catering Equipment premises in Industria, west of Johannesburg was completed and work began at Vulcan’s Cape Town premises. A refurbishment at the Spartan premises of Buffalo Executape is underway.

A key objective of the refurbishment programme is to improve the energy efficiency, workplace safety, working conditions and overall respect for the environment of our premises.

At the end of the period, a significant property acquisition on the M1 “gateway” to Johannesburg was concluded. Refurbishment will begin shortly.

Continuing property industry challenges confirmed the appropriateness of the conservative policy pursued by Bidvest Properties. The business acquires and develops properties at competitive rates. In line with Bidvest policy, all premises in the portfolio are unencumbered by mortgages, occupancy levels are high while a stable, high quality tenant mix ensures a strong rental stream. As a result, the return on the portfolio was above the market average.

In seven years, the portfolio’s size and market value have grown approximately seven-fold.

Target-setting for the next three to five years is complicated by the difficulty of predicting interest rates and the effects of the developed world’s debt crisis. The short-term challenge is rental affordability. We are well positioned to meet this challenge because of the efficient cost of property development, competitive long-term financing costs, the quality of our tenant mix and the high occupancy rates of our well-located properties.

We will investigate acquisitions and development opportunities as they occur while maintaining a largely conservative stance.

ONTIME AUTOMOTIVE
Despite the effects of recession and automotive industry cutbacks, the ongoing businesses showed a return to profit. Overall results were impacted by additional closure costs for the Technical Services division and the cessation of a Volume Distribution contract.

A new three-year contract for the worldwide distribution of Aston Martin vehicles was won. This includes distribution of the new Rapide out of Austria. The deal bestows logistical efficiencies as transporters that might have returned empty from Europe now bring the Rapide to the UK. Specialist Transport also secured new business from Lamborghini, Nissan GTR and Bentley.

Specialist Transport Operations has reduced its fleet to match the reduction of market-place volumes. The resulting efficiencies drove an improvement in results.

Rescue and Recovery re-signed contracts with the AA for a further term while prolonged bad weather in mid-winter boosted volumes. Profits improved.

Ontime Parking Solutions maintained its focus on its two major London contracts and opened a small office in York to work on tenders for councils in the provinces. As local councils seek outsourcing efficiencies, opportunities have emerged for the business to expand its enforcement platform by growing its on-street ticketing service.

Trading conditions remain challenging. However, all new contracts offer acceptable margins. Ontime is engaged in ongoing discussions with new and existing clients and looks forward to profit growth in 2011.

Economic performance – Ontime Automotive’s ratio of salaries to turnover decreased from 40% to 35%, a reflection of the consolidation phase following the severe UK recession.

Environment – Ontime Automotive’s fleet of 400 vehicles is largely up to the Euro 2 standard. New intensity measures show each vehicle costs the environment 34,6 metric tonnes of CO2e, 51,6m3 of water and 2 100 litres of general refuse annually. Ontime Automotive disposed of 4 200 tonnes of vehicle scrap at an authorised de-pollution site. The UK business recycles 4% of total materials used. Staff are trained regularly to mitigate the impact of services on the environment. This is audited by National Quality Assurance to maintain Ontime’s 14001 standard.

Human resources – UK headcount has stabilised and staff morale has improved after landing some significant new business at Ontime Automotive. League tables are being introduced to rank and reward Ontime drivers for economical driving.

Health and safety – Mindful of the growing claim culture in the UK, Ontime maintained its health and safety training focus and was again audited by and accredited with CHAS (Contractors Health and Safety Accreditation Scheme). The rate of injuries, diseases and dangerous occurrences in the UK business is down from 12 to three, with total incidents down from 84 to 27 over three years.

Society – Business ethics is governed through financial, process and operational audits. We are mindful of our code of ethical behaviour and risks related to corruption and anti-competitive practices. An anti-corruption policy is built into the terms and conditions of employment and applied when developing strategies for bidding for business.