Bidcorp HY HEPS up 45.5% on demand spike

Bidcorp, a listed food services company, recently announced an impressive half-year performance with a 45.5 per cent increase in headline earnings per share. The company also revealed its intentions to retain its Greater China business following the ease of COVID-19 restrictions in Beijing. In a recent interview with CNBC Africa, Bidcorp CFO David Cleasby discussed the company's results, challenges faced, and future outlook. Cleasby highlighted the impact of inflation on revenue growth, noting that about 60 per cent of the growth was related to inflation, which has been a persistent concern for the past year. Despite the challenges posed by inflation, Bidcorp's businesses worldwide have effectively managed both product and cost inflation, demonstrating resilience in navigating the current economic environment. Labour scarcity has been a significant pressure point, driving up costs in the workforce, energy, and fuel sectors. Cleasby explained that approximately 65 per cent of Bidcorp's cost base is attributed to labor, making it a critical area for cost management. The company has also faced challenges with global supply chain disruptions, impacting the availability and lead times of essential items like vehicles and equipment. Despite these hurdles, Bidcorp has performed well in the hospitality sector, with a notable return in demand as restrictions ease in various markets. Cleasby emphasized the importance of socialization driving the resurgence in hospitality businesses, although labor shortages continue to pose operational challenges. The company's dividend increase reflects its confidence in the future, balancing reinvestment in the business with shareholder returns. Bidcorp remains optimistic about the prospects of the food service industry and its ability to capitalize on growth opportunities in both existing and new markets. Cleasby discussed the company's approach to expansion, highlighting a history of strategic acquisitions to enter new territories. Bidcorp focuses on finding the right management teams to implement its growth strategy effectively, regardless of whether the target market is developed or emerging. The company's opportunistic mindset allows it to capitalize on market opportunities as they arise, leveraging its financial strength and expertise in the food service sector. With a commitment to prudent investment and operational excellence, Bidcorp is poised for continued growth and success in the global market.