Bidvest owns a bit of nearly everything. Freight terminals, hygiene contracts, car dealerships, a pharmaceutical business, bottled water, the company that cleans your office building. A group built that way does not grow by finding one big new market. It grows by squeezing a little more out of each of the parts, or by buying another part. In the year to June it did both, and then said it was stopping.
Revenue rose about 3%, to R130.3 billion. Underneath that it went better: every division grew its trading profit, and the group now keeps 10 cents out of every rand of sales as trading profit, half a cent more than a year ago.
The cash is where it shows. Cash generated by operations rose 17%, to R17.2 billion, and free cash flow, the money left once the business has paid for itself, went up by more than a quarter. Bidvest put it into debt, which now sits at 1.9 years of operating earnings, down from 2.2. Shareholders get a final dividend of 483 cents, about 7% more than last year.
The year Bidvest went shopping
Three acquisitions went through, worth about R1.67 billion between them, and one of them is essentially all of it. Aquatico, a Pretoria environmental monitoring and water testing business, cost R1.5 billion and came in on 14 October. The other two are rounding: a hygiene bolt-on in Singapore and a Spanish pest control business, R38 million for the pair. Bidvest was selling at the same time, letting go of Autosure, half of a Centurion car dealership and most of WearCheck Ghana, on the grounds that the synergies never turned up.
Where the next R2.5 billion goes
Mpumi Madisa says no material deals are planned in the near term. The cash goes to debt instead, and to R2.5 billion of port capacity: a second gas terminal at Richards Bay and more bulk grain and liquid capacity at Durban, once the closing conditions are settled. Bidvest also signed the terminal operator licence on a renewed 25-year lease at Island View, with two more under negotiation. Freight grew its trading profit 10.3% on agricultural and mineral export volumes, which is the division that spending is aimed at.
Bidvest Bank and Bidvest Life are still on the shelf. The bank's sale collapsed when Access Bank could not get its approvals before the long stop date, and the process has been restarted; the life business is waiting on regulators. Until both are gone, Bidvest's earnings will keep arriving in several versions at once, and the group will keep having to say which one it means.
