JSE-listed foodservice group Bidcorp Group has recorded record group revenues in the ten months ended April 30 across all the regions in which it operates.
The group has foodservice businesses in Australia, New Zealand, Malaysia, Singapore, the UK, various other European countries and emerging markets such as Brazil, China and South Africa.
Additionally, margins have held up well considering the overall economic environment and are tracking slightly ahead of the 2023 financial year.
The UK and some emerging market business’ margins, however, remain below norm, but it is being offset by performances in the Australiasia and Europe businesses.
Bidcorp continues to weigh the need to balance volume growth and margins depending on prevailing consumer demand.
“Our constant currency trading results in the ten months ended April 30 reflect a solid performance and a continuation of the real constant currency growth seen throughout the first half of the 2024 financial year,” Bidcorp reports.
The corporation adds that its estimated weighted average food inflation of about 2.6% in the period is lower compared with this time last year, when it was 15.2%.
Currency volatility has impacted on Bidcorp’s rand-translated results, with foreign exchange movements to the end of April having had a 9% positive impact on the group’s rand numbers.
Notably, for the ten months under review, Bidcorp reports 4.6% and 10.4% increases in sales in Australia and New Zealand, respectively, while the group’s performance in Europe improved only marginally compared with the same months of last year.
In the UK, sales are tracking well ahead of the 2023 financial year, with volume growth being recorded on both the free trade and national account sectors. The group’s bolt-on acquisitions concluded in the prior year, as well as new contract activations, are contributing to a good performance in this region.
Bidcorp reports overall good sales performances across its emerging market businesses, with the South African business performing particularly well despite low economic growth in the country and electricity supply issues.
Consumer spending remains under pressure in Mainland China, while Hong Kong continues to be affected by a new outflow of consumers from the city – and inbound tourism has not materialised.
In Brazil, sales have been flat in the period under review as the foodservice market has not grown as expected, yet trading results are poised to improve slightly from the 2023 financial year.
The group’s businesses in Chile and the Middle East are starting to deliver improved performances, as well as those in Malaysia following weaker trading performance in the second half of the 2023 financial year.
The Singapore business is normalising after a management restructure, while the Türkiye operations continue to grow nationally.
Bidcorp continues to invest in future capacity and maintenance activities, having spent R4.4-billion on capital investment in the period. This included the acquisitions of a bakery business in Germany and a seafood wholesaler in South Africa.
The group remains well within its debt covenants and has cash and cash equivalents of R19.1-billion on hand.
Bidcorp expects to conclude more bolt-on acquisitions in the remainder of the year and early in the new financial year, including in the UK.