SOUTH AFRICA – Bid Corporation (Bidcorp), an international food distributor, has earned most of its revenue in Europe, but most of its profit from Australia and New Zealand.
The geographically diverse food conglomerate which unbundled from Bidvest in 2016, has reported that its revenue for the six months to End-December grew 8% to US$5.25 billion.
At Tuesday’s closing price of US$22.56, Bidcorp had a market capitalisation of US$7.56 billion, placing it ahead of Tiger Brands’ US$7.30 billion and making it the JSE’s largest food group.
Bidcorp segments its results into four geographic regions.
Its Europe division, which excludes the UK, grew revenue 20% to US$1.67 billion, contributing nearly a third of the group’s total sales.
The results refer to a “free trade horeca business” — horeca is an abbreviation used in Europe for the hotel, restaurant and café industries — which Bidcorp serves on the continent.
“Belgium’s revenue growth continued to beat expectations and trading profit growth was pleasing.
The catering segment maintained volumes in the face of pressure, while the horeca and institutional channels exceeded budget.
The ‘My BidOne’ e-commerce platform was successfully introduced,” CEO Bernard Berson said in the results statement.
Bidcorp views its expertise in e-commerce as a key strength.
“Our investment in digital interaction with our customers is being leveraged off our ability to intelligently interpret our significant data sets.
The development of BidOne, our bespoke global e-commerce and customer relationship management platform, continues to ensure our best worldwide innovations are leveraged for the greater benefit of the group,” Berson said.
The UK was Bidcorp’s second-largest revenue generator at US$1.38 billion, narrowly beating Australasia’s US$1.36 billion.
Although Australasia’s contribution was only the third-biggest revenue source, it contributed 31% of the group’s profit.
“Overall progress in Australia was highly satisfactory for a business that recently opened three additional metro sites in Sydney, Melbourne and Brisbane,” Berson said.
“New Zealand put in a strong second-quarter performance, offsetting a slow start to the half year.
Performance was driven by steady revenue growth, supplemented by ongoing focus on imports and margin management.”
In SA, Bidcorp formed a joint venture with Belgium confectionery group Puratos.
“The new Chipkins Puratos joint venture made excellent progress and Puratos’ knowledge and best practice are being implemented across the business,” Berson said.