JSE-listed diversified services, trading and distribution company Bidvest reported that revenue grew by 4.9% to R126.6-billion for the year ended June 30, up from R120.7-billion in the prior financial year.

On an organic basis, revenue was flat year-on-year, as this had been impacted by a stronger rand against major currencies, price-sensitive demand, new business gains, lower renewable energy product sales and negative price mix in some businesses, said Bidvest CEO Mpumi Madisa.

The financial year under review delivered a mixed performance with some highs and some lows. The group delivered a resilient result, owing to a stronger year-on-year performance in the second half, she said during a presentation of the group's results on September 1.

Bidvest reported an earnings contraction of 10% in freight, and a 28.4% contraction in commercial products that continued into the second half of the financial year. This was offset by the exceptionally strong profit growth in Services South Africa, up 13.6%; Services International, up 12.1%; Branded Products that increased 7.8%; and automotive, which increased by 2.5%.

The profit growth across these divisions improved profitability, and excluded restructuring costs, she added.

Adcock Ingram also delivered an improved second-half performance.

The successful acquisition of washroom hygiene products and services company Citron provided a strategic platform for multi-year hygiene services growth in North America, noted Madisa.

Meanwhile, the award of a new 25-year concession in Richards Bay, enabled further domestic investment in long-dated terminal assets, she added.

Trading profit grew by 0.7% to R12-billion, owing to the superior growth from higher margin businesses, well managed expenses, particularly in the trading businesses, where demand was constrained, as well as the contributions made by acquisitions.

This growth was materially moderated by markedly lower profitability in bulk commodity handling and renewable energy product sales, she said.

Trading profit growth was boosted by acquisitions, which added 5.6%, although the trading profit margin decreased slightly to 9.5%, from 9.9% in the prior financial year.

Further, Bidvest declared a final dividend of R4.53 a share, up 1.3% from the R4.47 a share distribution a share in the 2024 financial year.

Overall, the gross profit margin remained largely flat at 27.7%, with the strongest improvements delivered by branded products, Services South Africa and Services International, where the focus was on improving the revenue mix.

The contract-margin management was neutralised by the negative operating leverage in freight, said Bidvest Group CFO Mark Steyn.

Cash generated by operations after working capital increased by 5.8% to R14.7-billion. This is well ahead of trading profit growth resulting in an improved cash conversion ratio of 95.3%, up from 88.2% at the end of June 2024.

The strong cash generation, which is an indicator of quality, resulted in net debt-to-earnings before interest, taxes, depreciation, and amortisation (Ebitda) increasing to 2.2-times, up from two-times posted at the end of the first half of the 2025 financial year.

This increase was despite the group executing the base-setting Citron acquisition and one additional bolt-on acquisition in the second half, he noted.

Additionally, expenses were well managed and increased 6.2% year-on-year, although organic expense growth was only 2.8%, despite restructuring costs incurred in three divisions.

“Regulated costs, including utility costs, and wages grew well ahead of general inflation,” said Steyn.

Further, Bidvest’s net debt increased to R32.9 billion, up by R7.7-billion from the preceding financial year. Of this debt, R9.1-billion was driven by corporate actions.

The offshore portion of the net debt is 70.9%, up from 66.9% at the end of June 2024.

New term funding was secured for the Citron acquisition and the new credit facility was used for the bolt-on offshore acquisitions, while new preference share funding was raised locally, noted Steyn.

OUTLOOK
The state of transition in the world’s largest economies is altering global trade. While Bidvest is not directly impacted by the newly introduced trade rules, the conflict, tensions and supply chain shifts are impacting on the business and operating environment and, subsequently, economic growth.

“It is important to focus on what we can control. Bidvest is sharpening its strategic positioning and agility to ensure more efficient operations and a cost-base that aligns to the prevailing environment, while seeking growth nodes that support the group’s diverse portfolio, expertise and geographic footprint,” said Madisa.

In the current financial year from July 1, this year, to end June 2026, the group aims to deliver real organic growth from its investment base, reduce its gross debt and optimise its debt mix, as well as reduce its net debt-to-Ebitda ratio back down to two-times, and then down further to 1.5-times in the 2027 financial year.

Its operational focus for its international businesses during this 2026 financial year would include continued investment in people, innovation and operational excellence, and leveraging sourcing synergies across a large-scale facilities management and hygiene operation.

The group would also focus on new business wins in the territories it operated in and would invest in sales capacity to drive hygiene growth in the US, she said.

“In the year ahead, we will drive organic growth from the increased investment base and focus on cash-generation. We will also ensure the most optimal risk-adjusted debt mix and proactively address upcoming debt maturities as well as long-term facilities.”