JSE-listed food services multinational Bidcorp grew its revenue by 24% year-on-year to R113.8-billion for the six months to December 31, 2023.

Its revenue increased by 10.8% in constant currency terms, representing solid real growth, despite rapidly moderating inflation and softening demand, said Bidcorp CEO Bernard Berson during the company's results presentation on February 21.

He praised the company's employees and management teams across the 35 countries the group operates in for achieving good half-year results in trying conditions.

The cash generated by the group before working capital increased to R6.8-billion, up by 11.3% from R6.1-billion in the first half of the 2023 financial year, he said.

Bidcorp also increased the total distribution per share by 85c, or 19.3%, to 525c a share, up from 440c a share in the comparable 2023 half-year period.

Further, the group maintained its gross margin at 23.7%, and the company-controlled expenses relatively well, during the half-year period, said Berson.

"There is lots of consumer stress, with cost-of-living crises in most of the jurisdictions in which we operate, mortgage stress in various countries and disruptions for various reasons," he said.

Group trading profit increased by 20.8% to R5.9-billion, up from R4.9-billion in the 2023 first half, and 9% up in constant currency. Trading profit margins remained good at 5.2% slightly below the 2023 first-half period at 5.3%, which was an excellent result in this environment, he said.

It increased headline earnings a share (HEPS) by 18.6% to 1 152.4c a share, up from 971.7c in the 2023 financial half-year. HEPS in constant currency terms rose by 6.8%.

"The constant currency growth of 11% in revenue represents an estimated 5.5% real growth and allows for the changes to the mix to ensure we execute optimally profitable businesses where feasible, which has been our strategy in Australasia," he said.

Trading profit was 21% up in rands, and 9% up in constant currency terms, Berson said.

Activity levels held up well in the first quarter, however, there was a general slowdown into the festive season.

"Our focus on the optimal mix of sales in both the discretionary and non-discretionary market segments assisted in protecting our gross margins," he noted.

Moderating but persistent food inflation complicated trading as many customers became more price-sensitive and competition increased. Cost inflation has eased, labour availability is improving, although wage pressures remain as it backfills positions and grows its workforce to cater for the increased scale of the business.

There was some relief in energy and fuel cost impacts, Berson said.

"In terms of outlook for the rest of the financial year, we remain confident of continuing to deliver real growth," he said.

Further, Bidcorp's investment activity, primarily into new distribution capacity, had continued to cater for current and future growth. Only one bolt-on acquisition was concluded in Australia in the period, he added.

"Further investments into strategic distribution facilities to provide for future capacity are planned in many businesses to cater for anticipated organic growth. However, the rate of investment is likely to moderate.

"Investing in new technologies for renewable energy, refrigeration, energy efficiency and logistics optimisation in an environmentally and cost-efficient way remains a strategic imperative to furthering our sustainability," Berson highlighted.

"We are ramping up our advancements in technology as well as continuing to explore what opportunities artificial intelligence can bring, actively looking to AI-solutions to maximise sales opportunities, margin optimisation, inventory management, as well as labour efficiencies."

Further, several bolt-on acquisitions are under consideration across the group, both for in-country geographic expansion as well as value-add product development, which are likely to conclude in the latter part of the financial year or early in the new year.

No new geographic market acquisitions were being investigated at present, but the company was alert to any opportunities should they present themselves, he added.

"The long-term growth fundamentals of the global foodservice industry remain positive; in the short term, the economic outlook for many of our jurisdictions is much tougher," he noted.

Food inflation is abating erratically, cost inflation remains elevated driven by ongoing wage increases, and consumer spend will remain under pressure until interest rates start to decline.

Activity levels into February were reasonable, considering the seasonally slower winter in the northern hemisphere, Berson said.

Bidcorp declared an interim cash dividend of 525c a share.