Message to shareholders


The Group's strong operating and financial results over this past interim period reflect the agility of Bidvest's decentralised leadership and team structure, the portfolio of value-adding essential services, the financial muscle to invest in inventory and capital projects, as well as the successful delivery of strategic growth plans.

Trading profit grew by 24.8% to R5.1 billion, with R1.0 billion earned internationally. Robust cash generation by operations of R6.6 billion was delivered before absorbing R2.6 billion in working capital as the seasonal trend returned. Capital investment of R1.2 billion was maintained and a R0.5 billion investment in a LPG terminal in Isando, Johannesburg was approved.

The successful maiden issuance of an USD800 million international bond bolstered the Group's financial capacity to execute our international growth ambitions. The pipeline of strategic growth opportunities continues to build.


All divisions reported double digit trading profit growth. This is an excellent result considering the benign trading environment, global supply chain constraints, increasing input price inflation and continuing waves of the COVID-19 pandemic. The acquisitions made by Noonan in the prior year delivered in line with expectations.

HEPS grew by 35.3% to 813.8 cents from continuing operations. Normalised HEPS1, a measure used by management to assess the underlying business performance, grew by 30.9% to 852.9 cents.

Return on Funds Employed (ROFE) improved significantly from 31.3% at 31 December 2020 to 40.4%. Return on Invested Capital (ROIC) of 15.5%, which compares to 12.9% as at 31 December 2020, is above the Group's weighted cost of capital.

The Group declared an interim dividend of 380.0 cents per share, up 31.0%.

Note 1: Normalised HEPS excludes acquisition costs, amortisation of acquired customer contracts and COVID-19 costs

Financial overview

Group revenue grew 12.9% to R50.2 billion (1HFY2021: R44.4 billion). Greater bulk commodity volumes handled in Freight, strong pharmaceutical volume increases in Adcock Ingram (Adcock) and the maiden contribution from the acquisitions concluded by Noonan, were the key growth drivers.

The gross and trading profit margins were 29.6% (1HFY2021: 30.2%) and 10.1% (1HFY2021: 9.2%), respectively. Expenses were exceptionally well managed and increased by only 6.8%, well below revenue growth.

Trading profit grew by 24.8% to R5.1 billion. Growth was led by Freight on the back of record maize export volumes handled, annualisation of the LPG terminal investment and buoyant commodity demand. Coming off a record high base, Commercial Products delivered another excellent result driven by a strong trading ability, market share gains and good expense management. Branded Products' results were very strong, boosted by a record Adcock performance and a good performance from the remainder of the businesses. In the Services division, the international operations achieved an excellent result, while the South African businesses delivered a good performance, which was augmented by the turnaround in travel and related industries. Automotive's focus on margin stood it in good stead and culminated in good growth while Financial Services' result was boosted by investment returns. Almost all businesses reported a sequential improvement in quarterly performance over the six-month period.

Acquisition costs, which were significantly higher year-on-year, were incurred as part of the inaugural international bond issuance. The amortisation of acquired customer contracts of R143.2 million increased modestly.

Net capital items contributed an immaterial loss of R5 million compared to the R134.0 million recognised in the prior period due to losses on the closure and disposal of businesses.

Net finance charges were 7.7% higher at R790.7 million (1HFY2021: R734.4 million). Excluding IFRS16, fair value adjustments and hedge costs, the increase was 16.9%, which was as a result of the higher gross debt following the international bond issuance and the step up in funding costs. The Group's average cost of funding was 4.7% - pre-tax (1HFY2021: 4.6%).

Share of associate profits amounted to R54.5 million, largely attributable to Adcock's associate holdings.

The Group's effective tax rate, excluding capital items, is 26.9% (1HFY2021: 31.3%). The foreign tax differential is 2.0%.

Basic EPS from continuing operations increased from 562.3 cents to 811.3 cents mainly due to a strong operational performance as well as disposal losses and impairments in the prior period. Basic EPS for the Group improved from 554.5 cents to 811.3 cents.

Bidvest's net debt increased from R13.3 billion as at 30 June 2021 to R15.5 billion at the end of December 2021. Strong cash was generated by the businesses which was invested in working capital while maintaining capital investment, resulting in less free cash flow generation. Covenant net debt to adjusted EBITDA of 1.8x remained unchanged from 30 June 2021. Interest cover was 9.4x (1HFY2021: 8.6x).

Cash generated by operations before working capital of R6.6 billion was 12.3% higher than in the prior period. The Group absorbed R2.6 billion into working capital in the current year compared to R0.3 billion released in the prior year. Higher inventory and trade receivables are on the back of stronger activity levels and securing stock within a constrained global supply chain. A decrease in trade payables is primarily due to timing. The absorption of working capital is a normal seasonal position and is encouraging as it points to a recovery in demand and economic activity. The quality of trade receivables and inventory improved.

Corporate action

On 16 September 2021, The Bidvest Group (UK) Plc successfully issued its inaugural 5-year USD800 million bond at a fixed semi-annual coupon on 3.625%. The proceeds were simultaneously swapped into Sterling, using a cross currency swap, to match the operational currency profile of the international services businesses. Part of the proceeds were used to repay the Revolving Credit Facility element of the new syndicated credit facility negotiated in July 2021 and funding raised in South Africa to part finance the PHS acquisition in May 2020. The balance of the proceeds is held offshore for acquisition purposes. Net debt/EBITDA remains well below bank covenants, Group liquidity remains strong and the maturity profile of debt extended to FY2027.

Our pipeline, in the specific niches for international expansion as well as local bolt-on acquisitions, is healthy. Opportunities are being actively pursued.

We are also actively engaging with Transnet with regard to the Durban and Richards Bay Port Master Plans to derive the best possible outcome for all stakeholders. In November 2021, the board approved a R500 million capital investment to establish an inland LPG terminal in Isando, twice the size of original ambitions. Commissioning is anticipated towards the end of 2025. Efficient and reliable rail plays a key part in the viability and returns of this planned investment.


We are optimistic that demand and economic recovery is gathering momentum. There are encouraging signs of a return to offices, albeit from very low levels. Tender activity and building plans passed are increasing, while customer engagement and procurement decision making is picking up. A record maize season is expected with strong export demand given adverse weather in other key maize producing regions. Bulk commodity demand is expected to remain robust. Demand for renewable and alternative energy solutions and products is accelerating.

An optimised cost base, continuing efforts to improve efficiencies and innovation, together with active gross margin management will positively support future results, whilst contending with rising inflation.

Effective, 1 April 2022, the Services division will be split into two divisions, Services SA and Services International, to better support Bidvest's international growth strategy.

The Group

Bidvest encourages a performance-driven, decentralised business model that continuously seeks scale and growth. We empower the many enterprises across our diverse areas of operation – Services, Branded Products, Freight, Commercial Products, Financial Services and Automotive – which acts as a remarkable catalyst for enduring value creation.

Divisional review


Services' trading profit grew strongly, up by 19.3%. Organic growth was solid off a high base augmented by Noonan's Cordant and Axis acquisitions in the second half of FY2021. Trading profit of R2.0 billion was almost equally split across South Africa and offshore. Internationally, strong organic revenue growth, the lifting of trade restrictions, upselling and the realisation of synergies limited the negative mix impact from the lower margin businesses acquired. Noonan added niche transport solutions to its portfolio in the United Kingdom while PHS launched several innovative products that will deliver both commercial and sustainability benefits. The South Africa operations posted yet another strong trading profit performance. The annuity income businesses delivered solid results while the travel and hospitality related businesses were profitable, recovering from COVID-19 incurred losses over the past 18 months. The slow return to offices and hotels was evident in the revenue and trading profit growth within the Allied cluster. Across the division, a number of businesses benefitted from COVID-related work. The anticipated roll-off of this work is expected to be broadly neutralised by the lifting of trade restrictions and new products. ROFE remains extremely high across the division despite an increase in funds employed as the working capital cycle, particularly receivables, normalised.

Branded Products

A very strong trading profit of R1.0 billion, up 24.4%, was achieved as a result of excellent pharmaceutical and related volume growth together with positive product mix and a sequential improvement in demand from various office, print and packaging products. Adcock delivered an excellent trading result on the back of new product launches, higher demand for flu products, which was largely absent over the past two years, improved factory recoveries and expanded product portfolio. The strategic focus on growing the non-regulated part of the business is yielding benefits. Given the early, and ongoing, rightsizing and re-engineering of the balance of the division, modest revenue growth converted into good trading profit growth across all the clusters. The back-to-school season normalised and customer downtrading was evident in appliances as lower-priced brands outperformed premium brands. Konica Minolta grew its machine base at a healthy level and has a strong order pipeline. Stock availability will be key to delivering on this in the second half. Operating cash generation was excellent, mainly due to a significant working capital inflow in Adcock while the cash flow cycle in the balance of the division normalised.


An exceptional trading profit result of R833.6 million is up 29.0% for the six months to December 2021. This is the result of the continuation of bumper agricultural volumes, the annualisation of good LPG volumes through the new terminal and reasonable bulk mineral volumes handled by the terminals and related businesses. The global shortage and imbalance in the container market is resulting in lower container volumes which negatively impact other Freight businesses. Naval in Mozambique benefitted from greater volumes handled. The benefit of restructuring efforts materialised, particularly in Bidfreight Port Operations and Bidvest International Logistics. Clearing, forwarding and road freight activities picked up markedly over the two quarters, which is evidence of an economic recovery. ROFE improved from 31.2% to 43.6%, due to increased volumes off a largely fixed asset base.

Commercial Products

After an exceptional FY2021, Commercial Products delivered another excellent result, growing trading profit by 24.9% to R619.4 million. The impact of the riots at the start of the interim period, the lack of supply into Yamaha, and non-repeat project work limited revenue growth despite numerous price increases. Demand was robust from customers in the mining, agriculture, renewable energy, select industrial segments and luxury goods, while general public infrastructure demand remains absent. Stock on hand continues to be a key differentiator. Improved gross margin and cost management culminated in excellent performances from the Trade, DIY / Tools / Workwear, Leisure and Warehousing clusters. Plumblink, Electrical, Matus, Yamaha and Berzack's all delivered growth at a pace faster than the overall division. Funds employed increased significantly post June 2021 as management invested in inventory given the ongoing supply chain challenges and market demand. This muted cash conversion temporarily, but ROFE improved from 26.7% to 33.2%.


South Africa's automotive sector continued its slow recovery with new vehicle dealer sales growing 4.7%, despite significant vehicle supply challenges. The Automotive division grew trading profit by a strong 15.0% to R372.5 million. Some 9.9% more new vehicles, but 10.8% fewer used vehicles, were sold. McCarthy's share of the new vehicle dealer market increased to 7.1%. Volume brand activity remained buoyant compared to the luxury end of the market, with McCarthy's brand representation mirroring this market dynamic. Parts sales grew while the servicing activity remained relatively stagnant. Management's focus on gross margin and cost containment resulted in the strong trading result. The supply of new and good quality, reasonably priced used vehicles is an ongoing challenge. The bolt-on acquisition of Melrose Nissan was concluded during the period. ROFE at 45.3% is a fantastic result, partly enhanced by constrained inventory.

Financial Services

Financial Services' trading profit increased by 20.1% to R201.6 million. Bidvest Bank's non-interest revenue continues to be negatively impacted by the net roll-off of fleet management units and lower transaction activity. Foreign exchange and related products and services into corporate clients grew nicely. The pipeline for loans and advances is good and management's focus is on conversion. Bidvest Bank's deposit book remains healthy and ratios comfortably above South African Reserve Bank minimum requirements. Growth in gross written premiums in the insurance businesses was encouraging. The operational cost containment focus was neutralised by higher claims and bad debt provisions. Cross-selling opportunities within the division and across the Group are being pursued. Higher portfolio returns for the period more than offset lower core results.

Bidvest Properties and Corporate

The Group owns a significant property portfolio which is largely Bidvest occupied. Bidvest Properties delivered a resilient result in a very challenging property market marred by falling market values and vacancies with occupancy costs increasing by more than inflation. Trading profit was flat at R275.8 million. The portfolio comprises of 133 properties across South Africa and Namibia with a stable estimated market value of R8.1 billion, significantly higher than the R3.8 billion book value.

Corporate costs remained well controlled while the non-core Namibian food distribution businesses had a challenging trading period. The base included the last negative foreign exchange mark-to-market adjustment for MIAL.


In accordance with the section 3.59 of the JSE Listings Requirements, the board of directors of the Group advised shareholders that, effective 3 January 2022, Ms. Faith Nondumiso (Faith) Khanyile and Ms. Motlanalo Glory (Koko) Khumalo were appointed as independent non-executive directors.

For and on behalf of the board

BF Mohale

NT Madisa
Chief executive

28 February 2022

Dividend declaration

In line with the Group dividend policy, the directors have declared an interim gross cash dividend of 380 cents (304.0000 cents net of dividend withholding tax, where applicable) per ordinary share for the six months ended 31 December 2021 to those members registered on the record date, being Friday, 25 March 2022. The dividend has been declared from income reserves. A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt.

Share code: BVT
ISIN: ZAE000117321
Company registration number: 1946/021180/06
Company tax reference number: 9550162714
Gross cash dividend amount per share: 380.0000
Net dividend amount per share: 304.0000
Issued shares at declaration date: 340 274 346
Declaration date: Monday, 28 February 2022
Last day to trade cum dividend: Tuesday, 22 March 2022
First day to trade ex-dividend: Wednesday, 23 March 2022
Record date: Friday, 25 March 2022
Payment date: Tuesday, 28 March 2022

Share certificates may not be dematerialised or rematerialised between 23 March 2022, and 25 March 2022, both days inclusive.

For and on behalf of the board

Ms. Nonqaba Katamzi
Company Secretary