South African food services company, Bidcorp, released its FY 2023 results ending June 30. Commenting on the results is, Tickmill’s Partnership Manager, Kamogelo Mosime who says the company demonstrated impressive performance amid significant economic challenges in multiple markets.
“Bidcorp’s record performance for the year ending June 30, 2023, underscores its exceptional strategic ability to navigate challenges. “The company’s growth serves as a testament to its resilience, strategic foresight, and shareholder value commitment. Achieving a remarkable 38% increase in trading profit; with an impressive 35.4% rise in Headline Earnings Per Share (EPS), and 42.8% in Basic EPS which matched earlier estimations and signifies effective operational strategies and prudent cost management. This reaffirms Bidcorp’s ability to capitalise on opportunities while maintaining fiscal efficiency,” explains Mosime.
Challenging operational environment
He says that Bidcorp operates in a dynamic environment addressing challenges such as inflation and supply chain disruptions. The company’s strategic response to managing costs, maintaining margins, and adapting to changing circumstances denotes its expertise in combatting disruptive market forces.
Building resilience through geographic diversification
“Bidcorp’s capacity to sustain heightened trading amid difficult conditions is proven by examining company data. Positive performance during the northern hemisphere winter and disruptions from natural disasters, among other operational challenges, emphasises the company’s high level of resilience. Bidcorp CEO Bernard Berson’s acknowledgment of normalising growth rates due to a robust comparative base demonstrates the company’s preparedness for potential fluctuations,” explains Mosime.
Furthermore, Bidcorp benefitted from its presence across diverse geographies, which yielded diverse outcomes:
Australasia: Australia and New Zealand continued on a positive trajectory, delivering exceptional results. Despite exiting significant Quick Service Restaurant (QSR) contracts, both countries exhibit impressive year-to-date (YTD) sales growth.
Europe: Businesses in Europe remain resilient, demonstrating solid performance through the winter months. Trading margins prevailed against elevated food inflation.
United Kingdom: UK businesses experienced growth from organic sources, acquisitions and new contracts. Sales outpaced the previous year and margins reflected historical trends.
Emerging Markets: Despite economic challenges, select markets like Brazil, Singapore and Malaysia exhibited strengthened growth, while supply chain disruptions impacted other markets.
Positive industry trends and customer demand
“Bidcorp’s ability to adapt to changing conditions is evidenced by its discretionary spending trends approaching or exceeding normalised levels. This, coupled with robust customer demand, underscores the company’s strong market position,” comments Mosime.
Financial metrics and efficiency: Bidcorp’s financial indicators demonstrate positive trends and an overall positive outlook given its operational efficiency.
Gross profit percentage: Group gross profit percentage, though slightly down from the previous year, remains satisfactory in the current economic environment. Contextually, this is a further display of resilience resulting from the company’s robust operational processes.
Operating costs: Cost efficiency actions are evident in the decline of operating costs as a percentage of net revenue.
EBITDA margin: A pleasing EBITDA margin of 6.5% average growth indicates the company’s capacity to generate profits while navigating operational challenges.
Stock performance and future outlook
Bidcorp stock, trading under ‘JSE:BID’, has exhibited robust performance in line with the company’s financial outlook. Earnings are projected to grow at a remarkable rate of 19.17% per year, reflecting the company’s strong operational strategies.
In summary, Mosime notes that Bernson has followed through on his earlier statement that Bidcorp would deliver record performance for the 2023 fiscal year, despite the normalisation of growth rates. This success can largely be attributed to the focus on rebalancing the customer portfolio and pursuing value-added acquisitions. Furthermore, these actions demonstrate the company’s commitment to sustainable growth.
“A holistic analysis of Bidcorp’s 2023 results reveals a company adept at managing challenges and strategically positioned for success. Geographic diversity, positive industry trends, operational efficiency and strategic alignment contribute to a promising outlook. I believe Bidcorp stands poised for continued growth and success in a dynamic global market, further exemplified by its impressive stock performance,” concludes Mosime.
Follow African Insider on Facebook, Twitter and Instagram
Picture: Supplied
For more African news, visit Africaninsider.com
