BidCorp H1’25 HEPS up 10%

JSE-listed food service group BidCorp has released its half-year financial results, showcasing a robust performance in the face of currency volatility challenges. The company reported a 10 per cent year-on-year increase in headline earnings per share to R12.67 for the six months ended 31 December 2024. Revenue for the period also saw a notable uptick, rising by 7.1 per cent in constant currency terms, with organic growth standing at 5 per cent. BidCorp's CFO, David Cleasby, joined CNBC Africa to provide insights into the company's strong results and shed light on their strategy moving forward. Despite economic and trading headwinds, BidCorp remains focused on pursuing opportunities in the market, seeking out profitable margins, and managing costs effectively. Cleasby highlighted the importance of adaptability in navigating challenging environments and emphasized the strength of the company's global management teams in delivering consistent results. One of the key challenges faced by BidCorp was a 4 per cent negative impact from currency fluctuations. Cleasby acknowledged the difficulty in mitigating currency risks given the international nature of their business but stressed that managing operations in local currencies helps offset some of these challenges. The company's focus on constant currency performance provides a more accurate reflection of their operational success. Despite competitive pressures and price-sensitive consumers, BidCorp managed to improve its gross profit margins significantly. Cleasby attributed this improvement to a focus on procurement efficiency rather than solely relying on pricing strategies to maintain market share. By optimizing input costs, BidCorp was able to enhance its gross margins sustainably. In terms of growth strategy, BidCorp executed eight bolt-on acquisitions in the first half, with more opportunities under consideration. The company pursues acquisitions that complement its existing markets and product ranges, emphasizing disciplined evaluation and fit within the broader group. Geopolitical risks, particularly in Eastern Europe, were addressed by Cleasby, who highlighted the importance of operating in countries with stable governance. While geopolitical tensions can impact operations, BidCorp remains committed to managing what is within their control to ensure business continuity. Cleasby also touched on the company's decision to exit the German market, noting the high costs of scaling operations compared to potential returns. BidCorp's approach to dividend distribution reflects a balance between returning value to shareholders and investing in future growth. The company increased its interim dividend by 6 per cent, signaling confidence in its cash-generative capabilities while remaining prudent in capital allocation. Overall, BidCorp's resilience in the face of challenges and focus on strategic growth initiatives positions the company well for continued success in the future.