Bidcorp reports HEPS jump of 21%
Food services company, Bidcorp, raised headline earnings per share by 21 per cent and ended the year with free cash flow of R4.7 billion. It says it is still reeling from the R674 million fraud case. Bidcorp CFO, David Cleasby joins CNBC Africa for more.
Thu, 30 Sep 2021 15:33:46 GMT
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AI Generated Summary
- Bidcorp raises headline earnings per share by 21% despite a revenue drop, demonstrating strong financial management and cost control.
- The company navigates through the impact of the COVID-19 pandemic across different geographies, with varying levels of performance and recovery.
- Bidcorp's diversified supply chain helps mitigate disruptions, with only a small percentage of products dependent on international sources.
Food services company, Bidcorp, has proven its resilience in the face of challenges as it raised headline earnings per share by an impressive 21 per cent. Despite a significant drop in revenue, the company managed to maintain its margins and control costs effectively, resulting in increased profits compared to the previous year. Bidcorp CFO, David Cleasby, addressed the R674 million fraud case that rocked the company, attributing it to collusion within a business unit over a period of five to six years. Cleasby expressed disappointment over the incident but emphasized that the company has taken a prudent approach by fully writing off the amount and isolating the impact within the current financial results. He assured stakeholders that the incident has been contained and will not overshadow the overall performance of the group.
Discussing the impact of the COVID-19 pandemic on Bidcorp's global operations, Cleasby highlighted the varying effects across different geographies. While the Australian business performed relatively well, with minimal COVID impact, the UK and European markets faced strict lockdowns that affected business operations. Emerging markets like Brazil, South Africa, and the Middle East also experienced challenges throughout the year but showed signs of improvement in the second half. Cleasby noted that Bidcorp's diversified supply chain helped mitigate disruptions, with only a small percentage of products dependent on international sources. He mentioned some difficulties in the UK, possibly related to Brexit, but overall, the company managed supply chain risks effectively.
Looking ahead, Cleasby expressed optimism about Bidcorp's future performance, citing a strong start to the financial year with sales tracking close to 100% compared to the pre-COVID baseline of 2019. Despite localized challenges, such as lockdowns in parts of Australia, the company is confident in its ability to capitalize on market recovery as economies reopen. Cleasby's positive outlook reflects Bidcorp's strategic focus on growth and profitability, backed by a solid financial foundation and operational efficiency.
Bidcorp's ability to navigate through turbulent times, including a major fraud incident and the global pandemic, showcases the company's resilience and adaptability. With a strong financial performance and a robust business model, Bidcorp is well-positioned to capitalize on emerging opportunities and drive sustainable growth in the future.