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Buoyant European boosts Bidcorp


The foodservices group's operations across Europe grew trading profit by 30% last year, with a number of record performances

Bidcorp's European businesses shot the lights out last year, pushing earnings higher despite a flat performance from emerging markets.

Releasing results yesterday, the food services and logistics group credited strong showings from its operations in the Netherlands, Belgium, Italy, Poland, Czech Republic and Slovakia for a standout performance from Europe in the year to end-June. Its German business recorded a small loss and its operations in the Baltic states showed continued improvement, it said.

While Europe may have led the way, most of its operations globally did well. Although growth in Australia and New Zealand tracked below trend, both countries set new records. In the UK, Bidfood grew revenue despite low consumer demand and restaurant closures. The group announced plans to sell its UK Contract Distribution (CD) business during the year as part of its strategy to exit low-margin logistics activities globally where they don't fit into its model for its foodservice business. It's treating CD as a discontinued business in the meantime.

It said its emerging-market operations delivered a mixed bag in uncertain economic environments.

Bidcorp Food Africa grew trading profit despite deflation in some of its businesses. While sales were up in greater China, profits dipped and Hong Kong failed to meet budget, hit by a slowdown in the foodservice market and the global dairy crisis.

Overall, revenue rose 8% to R119 billion in the year to end June despite begging inflation in its core foodservice markets. Trading profit from continuing operations rose 8.7% to R6 billion and was 9.1% higher in constant currency. Its operations in Europe reported a 30% jump in trading profit, excluding acquisitions and disposals, while trading profit in the UK and Australasia rose 8.7% and 4.4% respectively. Trading profit from its emerging-markets business declined by 0.4%.

Continuing headline earnings per share were 9.1% higher at 1 286.3c and were up 9.2% in constant currency. It's lifted its final dividend by 12% to 280c per share, taking its full-year payout to 560c.

Despite some short-term challenges, we remain optimistic that the fundamental drivers of our global foodservice markets remain positive," Bidcorp said. "We retain significant financial headroom giving the Group the ability to act decisively to capitalise on the right opportunities, either organic or acquisitive, whilst always remaining disciplined in our approach."

Its shares declined 2.2% to R290 yesterday.



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