directors' report
The directors have pleasure in presenting their report for the year ended 30 June 2018.
Nature of business
The Company is an investment holding company, listed on the Main Board of the JSE Limited, with subsidiaries operating in the services, trading and distribution industries.
Financial results
The directors are of the opinion that the financial statements set out herein fairly present the financial position of the Company and of the Group as at 30 June 2018 and the results of their operations and cash flows for the year then ended.
The directors are satisfied that the Group and Company have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the financial statements.
Acquisitions and disposals
During the period the Group acquired 100% of the share capital of the Noonan Services Group of companies (Noonan) with effect from 1 September 2017. Noonan, which is based and operates throughout the Republic of Ireland and in the United Kingdom, has a clear leadership position and a 40-year track record of delivering high-quality integrated facility management services and solutions. Its services include soft, technical and ancillary services and range from cleaning and security to building services and facilities management. The board believes that Noonan's business model and geographic presence will be complementary to Bidvest's Service division. The purchase price was funded by way of a three-year euro denominated offshore credit facility at an attractive variable interest rate.
Effective 1 October 2017 the Group acquired 100% of the share capital of Ultimate Security Services (USS). USS, a building security company operating primarily in London (United Kingdom), provides building security risk management solutions, "front of house" security management, reception services and mail-room handling services to more than 240 of London's most prestigious and iconic locations. USS was founded in 1999 and currently has a staff complement of 2 100 experienced security officers. The acquisition enhances the service offerings provided by Noonan. The purchase price was funded by way of the euro denominated offshore credit facility arranged to fund the acquisition of Noonan.
The Group also made a number of less significant acquisitions and disposals during the year. These acquisitions were funded from existing cash resources.
Share capital
30 million unissued ordinary shares were placed under the control of the directors at the Annual General Meeting (AGM) held on 27 November 2017. The Company issued 2 058 823 shares during the year (2017: nil) to settle share appreciation rights. Further details of the authorised and issued share capital appears in note 25 of the annual financial statements.
Movement in treasury shares
In terms of general authorities granted to the Company to repurchase its ordinary shares, the latest being shareholder authority obtained at the AGM of shareholders held on 27 November 2017, a maximum of 67 080 842 ordinary shares may be acquired by the Company or any of its subsidiaries. No treasury shares were acquired or sold during the year (2017: A total of 2 422 368 ordinary shares were disposed of at an average price (after deducting capital gains tax) of R113,21 per share).
Special resolutions
Special resolutions were passed at the AGM held on 27 November 2017 in regard to a general authority to acquire (repurchase) shares, approval of non-executive directors' remuneration for 2017/2018 and general authority to provide direct or indirect financial assistance to all related and inter-related entities in terms of sections 44 and 45 of the Companies Act.
Special resolutions were passed by certain subsidiaries to accommodate the acquisition and disposal of various businesses, for the issue and allotment of shares, general authority to provide financial assistance to related or inter-related companies and corporations in terms of sections 44 and 45 of the Companies Act and to approve the remuneration of their non-executive directors. A number of subsidiaries further passed resolutions for amendments to their MOI's.
Dividends
The directors declared an interim gross cash dividend of 255,0 cents (204,0 cents net of dividend withholding tax, where applicable) per ordinary share paid to ordinary shareholders recorded in the register on the record date, being Friday, 16 March 2018. The dividend was declared from income reserves.
Subsequent to year end the board has declared final gross cash dividend of 301,0 cents (240,8 cents net of withholding tax, where applicable) per ordinary shares for the year ended 30 June 2018 to those shareholders recorded in the register on the record date, being Friday, 21 September 2018. The salient dates are:
| Declaration date | Monday, 3 September 2018 |
| Last day to trade cum dividend | Tuesday, 18 September 2018 |
| First day to trade ex-dividend | Wednesday, 19 September 2018 |
| Record date | Friday, 21 September 2018 |
| Payment date | Tuesday, 25 September 2018 |
The dividend will be paid out of income reserves. A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt.
Subsequent events
Subsequent to year-end R1 billion of the cumulative redeemable preference share funding (detailed in note 29), with a maturity date of 11 September 2019 was settled using existing facilities.
During August 2018 the Group initiated a formal process to dispose of its 6,75% equity investment in MIAL.
Directorate
The names of the directors who were in office during the period 26 August 2017 to 31 August 2018 are as follows:
| Lorato Phalatse (chairman) | |
| Lindsay Ralphs (CEO) | |
| Doug Band | |
| Anthony Dawe | |
| Eric Diack | |
| Mpumi Madisa | |
| Alex Maditse | |
| Bongi Masinga | |
| Gillian McMahon | |
| Renosi Mokate | appointed 1 May 2018 |
| Nosipho Molope | |
| Nigel Payne | |
| Tania Slabbert | |
| Mark Steyn | appointed 1 March 2018 |
| Norman Thomson | appointed 1 May 2018 |
Directors' interest
The aggregate interests of the directors in the share capital of the Company at 30 June 2018 were:
| 2018 | 2017 | ||||
| Beneficial | 114 389 | 175 178 | |||
|---|---|---|---|---|---|
| Non-beneficial | 640 582 | 1 020 596 | |||
| Held in terms of The Bidvest Incentive Scheme | |||||
| Replacement rights | 330 365 | 428 448 | |||
| Appreciation rights | 80 000 | – | |||
Directors' shareholdings
Beneficial
The individual beneficial interests declared by the current directors and officers in the Company's share capital at 30 June 2018, held directly or indirectly, were:
| 2018 Number of shares |
2017 Number of shares |
||||||||||
| Director | Direct | Indirect | Direct | Indirect | |||||||
| AW Dawe | 3 465 | – | 3 465 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| B Joffe1 | – | – | 21 544 | ||||||||
| HP Meijer2 | – | – | 35 245 | 4 000 | |||||||
| LP Ralphs | 110 924 | – | 110 924 | ||||||||
| Total | 114 389 | – | 171 178 | 4 000 | |||||||
1 Resigned 18 August 2017.
2 Retired 28 February 2018.
The interests of the directors remained unchanged from the end of the financial year to date of this report.
Non-beneficial
In addition to the aforementioned holdings:
- I Roux is a trustee of the Group's retirement funds holding 640 582 shares (2017: 460 636).
- B Joffe is a trustee and potential beneficiary of a discretionary trust that held 559 960 shares at 30 June 2017.
Directors' and officers' disclosure of interest in contracts
During the financial year, no contracts were entered into in which directors and officers of the Company had an interest and which significantly affected the business of the Group. The directors had no interest in any third party or company responsible for managing any of the business activities of the Group.
Secretary
Mr CA Brighten, resigned as Company Secretary with effect from 1 January 2018. Ms I Roux was appointed in his stead for an interim period until 30 June 2018. With effect from 1 July 2018 Ms X Makasi was appointed as Group Company Secretary.
During the year under review, and in compliance with paragraph 3.84(h) of the JSE Listings Requirements, the board evaluated Mr CA Brighten and Ms I Roux, the Company Secretaries, and was satisfied that they were competent, suitably qualified and experienced. Furthermore, since they were not directors, nor were they related to or connected to any of the directors, thereby negating a potential conflict of interest, it was agreed that they maintained an arm's-length relationship with the board.
The business and postal addresses of the secretary, which are also the registered addresses of the Company, are Bidvest House, 18 Crescent Drive, Melrose Arch, Melrose, Johannesburg, 2196 and PO Box 87274, Houghton, 2041, respectively.