The directors have pleasure in presenting their report for the year ended 30 June 2020.
Nature of business
The company is an investment holding company, listed on the JSE Limited, with subsidiaries operating in the services, trading and distribution industries.
The directors are of the opinion that the financial statements set herein fairly present the financial position of the Group as at 30 June 2020 and the results of its operations and cash flows for the year then ended.
The directors are satisfied that the Group has 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
Effective 7 May 2020, the Group acquired 100% of the share capital and voting rights of, and claims on loan accounts against, PHS Bidco Limited and PHS Group Limited (PHS Group) via its United Kingdom ("UK") subsidiary, Bidvest Services Group (UK) Limited. The PHS Group are specialists in washroom, healthcare and floorcare hygiene, and are the leading hygiene service provider in the UK, Spain and Ireland. With over 120 000 customers in over 300 000 locations the PHS Group supports, among others, restaurants, offices, hospitals and schools and meets the hygiene needs of up to 100 million people. The acquisition adds significance to the Group's hygiene service offerings as a whole and in the UK and Europe geography. The Group will gain and achieve substantial synergies from this acquisition, which has been funded with a one-year sterling bridge facility, with an option to extend for a further one year period.
On 1 July 2019, the Group acquired 100% of the share capital and voting rights of Future Cleaning Services Limited (Future Cleaning) via its UK subsidiary, Noonan Services Group (UK) Limited. Future Cleaning, a North Yorkshire company formed in 2003, is an office and commercial cleaning services company operating throughout the UK and Ireland through bespoke packages designed to service any size company and budget providing the best value contracts. Specialist cleaning services include boat, transport and escalator cleaning, jet washing and road sweeping. General cleaning services include daily contract, commercial, industrial, window and carpet cleaning. This bolt-on acquisition increases the Group's cleaning service footprint and market share in the UK and Ireland and was funded from existing cash resources and facilities.
As at 1 July 2019 the Group acquired 100% of the share capital and voting rights of New Frontiers Tours Proprietary Limited (New Frontiers). New Frontiers is a full-service ground handler, specialising in the deluxe end of the market and offering accommodation, safaris, car rental, transfers, day tours, private touring, charter flights and VIP Meet and Greet services throughout Southern Africa. The consulting team is made up of travel professionals who have been in the industry a minimum of seven years and who are driven by passion and creativity to ensure impeccable on the ground service and responses. This inbound travel and tourism acquisition complements the Group's existing portfolio of internal and outbound travel and tourism offerings. The acquisition was funded from cash resources and existing facilities.
The Group also made a number of less significant acquisitions during the year. These acquisitions were funded from existing cash resources.
Effective 1 August 2019 the Group derecognised its associate investment in Adcock Ingram and recognised and consolidated Adcock Ingram as a 51.40% held subsidiary, following the dissolution of the Adcock Ingram Broad-Based Black Empowerment Scheme. No additional consideration was paid for the ordinary shares received on the dissolution of the Scheme. Adcock Ingram has been included in the Branded Products segment. Subsequent to 1 August 2019 the Group purchased an additional 1 597 100 Adcock ordinary shares for R90 million raising the Group's economic interest in Adcock to 52.3%. During March 2020 Adcock Ingram purchased 4 014 038 of its own shares from shareholders other than the Group, which raised the Group's effective holding to 53.6%.
16 900 000 unissued ordinary shares were placed under the control of the directors at the Annual General Meeting (AGM) held on 28 November 2019. The Company issued 1 312 370 shares during the year (2019 : 1 498 941) to settle share replacement and appreciation rights. Further details of the authorised and issued share capital appears in note 27 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 28 November 2019, a maximum of 34 018 282 ordinary shares may be acquired by the Company or any of its subsidiaries. No treasury shares were acquired during the year (2019: nil).
A total of 191 788 ordinary shares were disposed of at an average price of R176.56 per share in settlement of share options exercised by staff (2019: nil).
Special resolutions were passed at the AGM held on 28 November 2019 in regard to approval of non-executive directors' remuneration for 2019/2020, a general authority to acquire (repurchase) shares, and general authority to provide direct or indirect financial assistance to all related and inter-related entities in terms of section 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 section 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.
COVID-19 and the associated lockdown have had a significant impact on the Group, specifically for the last quarter of the current reporting period and is expected to adversely affect the 2020-2021 reporting period. The current reporting period includes the COVID-19 financial effects, which are based on management's best estimates (refer note 43 Accounting estimates and judgements).
The directors declared an interim gross cash dividend of 282 cents (225.6 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, 27 March 2020. The dividend was declared from income reserves.
No final dividend was declared.
Subsequent to the 30 June 2020 the Group has received a non-binding offer for Bidvest Car Rental, which has been disclosed as a disposal group held for sale and discontinued operation. There have been no other events noted, that occurred subsequent to the reporting date, including events associated with the COVID-19 pandemic, that could have a material impact on these annual consolidated financial statements.
The names of the directors who were in office during the period 1 September 2019 to 11 September 2020 are as follows:
|Lindsay Ralphs (CEO)|
|Bonang Mohale (Chairman)|
|Anthony Dawe||retired 28 November 2019|
|Nigel Payne||retired 28 November 2019|
|Myles Ruck||appointed 25 October 2019|
|Zukie Siyotula||appointed 25 October 2019|
|Tania Slabbert||retired 28 November 2019|
The aggregate interest of the directors in the share capital of the Company at 30 June 2020 were:
|Beneficial||229 958||116 030|
|Non-beneficial||614 264||662 589|
|Held in terms of The Bidvest Incentive Scheme|
|Replacement rights||57 500||99 034|
|Appreciation rights||80 000||80 000|
The individual beneficial interests declared by the current directors and officers in the Company¡¯s share capital at 30 June 2020, held directly or indirectly, were:
|Number of shares||Number of shares|
|AW Dawe||–||–||3 465||–|
|LP Ralphs||226 711||3 247||110 924||1 641|
|Total||226 711||3 247||114 389||1 641|
The interests of the directors remained unchanged from the end of the financial year to date of this report.
In addition to the aforementioned holdings:
- I Roux is a trustee of the Group's retirement funds holding 614 264 shares (2019: 662 589).
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.
During the year under review, and in compliance with paragraph 3.84(h) of the JSE Listings Requirements, the board evaluated Ms I Roux, the Company Secretary, and was satisfied that she was competent, suitably qualified and experienced. Furthermore, since she was not a director, nor was she related to or connected to any of the directors, thereby negating a potential conflict of interest, it was agreed that she 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.