Business context and trading conditions

In this year’s restructuring, the old Bidserv was unbundled and the new Bidvest Services division formed to focus on our labour-intensive companies. These companies form part of a ‘soft service’ package for the outsource market, focused on the range of services offered by the four companies making up Bidvest Services: Bidvest TMS, Bidvest Magnum, Bidvest Prestige and Bidvest TopTurf. Restructuring coincided with a rebranding exercise to make ‘Bidvest’ more prominent throughout the division.

Some Bidvest Services companies are dominant players in their industries. We intend to further grow our market share and widen the service package we offer, enhancing our services and entrenching customer retention. This strategy involves working to make our outsourced services as integral to clients’ businesses as possible.

The business traded in a no-growth environment across all areas of activity: cleaning, security, industrial cleaning and greens services. Any growth was a function of hard-won market-share gains as trading became increasingly competitive.

Compensating for lost Soccer world cup volumes created another challenge. The short-term upsurge turned out to be a false dawn rather than a catalyst for sustained growth. In many sectors, the temporary benefit was soon cancelled out, some client businesses then cutting back even further.

In response to improved fund management, the division’s capital expenditure increased to R152,6 million (2010: R142,9 million).

The installation of new technologies has enabled businesses in our division to measure productivity and suggest optimum value-added solutions to clients. This improved ability to measure has contributed to high customer retention and new contract successes.

Innovation at TMS and TopTurf led to fundamental changes to their business models. TMS, which previously depended heavily on long-term contracts from major petro-chemical companies, is looking to widen its customer base. The company is investigating the broader deployment of its industrial cleaning skills and specialised equipment to service the food, manufacturing and bulk-handling and storage industries.

Performance

Revenue increased by 2,2% to R2,9 billion while trading profit rose 2,4% to R187,6 million (2010: R183,2 million). Overall performance was impacted by the difficult trading environment faced by TopTurf and continued challenges at TMS, where revenue and profit were well below expectation. Prestige exceeded targets and our security businesses performed well.

Divisional ROFE was 40,5%. Trading margins narrowed to 6,47% (2010: 6,45%).

Businesses received several accreditations and numerous awards. Prestige became the first cleaning company to join the Green Building Council while TopTurf received the South African Landscaping Industry award as best specialised landscape construction company for the 2010 FIFA Soccer world cup hospitality project. TopTurf received Sali awards for excellence in landscape and turf maintenance in six categories, with two category awards for environmental landscapes.

Sustainability

Business units monitor resource use by measuring water and electricity consumption and collaborate to achieve savings. Recycling initiatives, waste removal and responsible disposal are also monitored. The quantity of paper recycled increased by 347,1% to 21 202kg (2010: 4 741kg) and the number of batteries (commercial and industrial) recycled increased by 243,7% to 220 batteries (2010: 64 batteries).

Bidvest Services views the need to save energy and reduce carbon footprints as an opportunity for differentiation as we have the resources to function as eco-friendly partners of our customers.

The reported increases in electricity and water consumption are primarily due to an increase in the number of Prestige sites reporting on these sustainability indicators, combined with the growth of Magnum Security and TMS.

We deeply regret that there were five fatalities at Bidvest Services. Not only have we lost valued team members, but their passing is a tragic loss to their families, to whom we offer our sincere condolences. Full investigations have been carried out in each case, and we continue with rigorous safety training to maintain adherence to safe practices.

As a large employer with 48 620 staff, Bidvest Services has a large impact on communities. We support a number of social investment and enterprise development programmes and total expenditure on these came to R8,8 million.

Initiatives include contributions towards the construction of a youth development sports centre for the Zandspruit and surrounding informal settlements; financial assistance toward tuition fees for orphaned children and soccer field ground levelling and layout for schools in informal areas.