- Bidcorp reports strong trading results for ten months ending April 2023.
- Robust growth witnessed in Australasia, Europe, and the United Kingdom, while Emerging Markets faced challenges.
- Bidcorp’s multi-year strategy and customer portfolio rebalancing contribute to resilient performance and market share gains.
Bid Corporation Limited (Bidcorp), a global leader in the foodservice industry, has announced robust trading results for the ten-month period ending April 2023. The company reported record levels of performance, despite facing various challenges in different parts of the world.
Bidcorp’s trading results for the four months leading up to April 2023 showcased significant growth, particularly in Australasia, Europe, and the United Kingdom. Australia and New Zealand demonstrated strong positive trajectories, delivering excellent results. The UK business experienced organic growth, fueled by new contracts and recent acquisitions. Meanwhile, European operations performed exceptionally well throughout the Northern Hemisphere winter.
However, the Emerging Markets segment encountered economic challenges due to supply chain disruptions and volatile exchange rates, impacting its overall performance. Angliss Greater China, which includes China, Hong Kong, and Macau, saw improved profitability but fell short of the anticipated post-COVID bounce witnessed in other regions. South Africa faced difficult trading conditions.
In terms of market trends, the operating environment remained challenging, with high inflation affecting the food component in most parts of the world. Labor costs remained elevated, although the demand for skills showed signs of abating. Energy and fuel costs, on the other hand, decreased. Supply chain disruptions and product shortages persisted as operational challenges, but with some easing overall.
Bidcorp noted that customer demand remained robust, and the company’s teams exhibited flexibility, adaptability, and high service levels. Sectors such as accommodation, business travel, conventions and conferences, and the cruise line industry approached normalized trading levels. However, workplace catering remained subdued.
The company’s multi-year strategy to rebalance the customer portfolio proved successful, with resilient independent customer bases and maintained margins. Bidcorp gained market share in its preferred sectors, leveraging its flexibility, resilience, and financial strength.
Group trading performance for the ten months to April 2023 surpassed previous comparative trading periods, as reflected in the strong sales progression across all divisions. The table below demonstrates the sales trajectory of each division compared to the previous year:
TABLE: Constant currency sales by division and group per month from July 2022 to May 2023 compared to F2022:
| MONTH | AUSTRALASIA | EUROPE | EMERGING MARKETS | UNITED KINGDOM | GROUP % OF F2022 |
|---|---|---|---|---|---|
| JULY | 122.6% | 128.1% | 127.2% | 140.0% | 129.4% |
| AUGUST | 144.2% | 127.2% | 118.3% | 130.8% | 130.6% |
| SEPTEMBER | 156.2% | 125.8% | 117.6% | 123.7% | 123.7% |
| OCTOBER | 141.0% | 129.0% | 113.3% | 131.3% | 125.4% |
| NOVEMBER | 126.1% | 140.9% | 111.0% | 129.9% | 128.6% |
| DECEMBER | 118.8% | 155.1% | 109.3% | 131.9% | 130.0% |
| JANUARY | 119.8% | 154.8% | 109.0% | 135.4% | 131.3% |
| FEBRUARY | 124.2% | 137.5% | 129.5% | 132.7% | 131.0% |
| MARCH | 125.9% | 145.1% | 120.9% | 141.2% | 133.8% |
| APRIL | 138.5% | 157.0% | 119.6% | 158.6% | 144.3% |
| MAY | 137.5% | 145.2% | 117.9% | 155.5% | 141.3% |
Currency movements played a favorable role in Bidcorp’s financial results, with average exchange rates benefiting the company. While there were some margin sacrifices and stock value adjustments due to pricing and contract repricing, the group’s gross profit percentage remained stable. Cost efficiency contributed to positive trading margins, resulting in a pleasing EBITDA margin of 5.7% for the ten-month period.
Bidcorp’s divisions also delivered solid trading performances. Australasia experienced buoyant demand, driven by robust sales growth in Australia and New Zealand. Europe performed well, particularly during the Northern Hemisphere winter, while the UK benefited from acquisitions and new contracts. The Emerging Markets region faced challenges but continued to achieve solid sales performance.
Despite ongoing operational challenges, Bidcorp’s liquidity and debt covenants remained favorable, with a total headroom of R17.4 billion. The company remains committed to prioritizing the health and well-being of its employees.
