Tag: Bidvest

The mysterious exit of Brian Joffe

A clipped 44-word stock exchange announcement hardly seems an appropriate way to bid adieu to one of the country’s great entrepreneurs. Yet this was the extent of the plaudits Bidvest heaped on Brian Joffe, the 70-year-old who founded its business 28 years ago, in an announcement two weeks ago simply titled: “resignation of nonexecutive director”.
It seemed so sterile it may as well have been written in Dettol on a cotton wool ball and turfed absent-mindedly in the disposables can.

It said Joffe quit “with immediate effect”, then added that icy cliché that might as well have been delivered by NetFlorist: “Bidvest expresses its appreciation to Mr Brian Joffe for his contribution over many years.”
The way it’s written, it sounds as if he’d been offhandedly drawing up the odd spreadsheet rather than being the man who, courtesy of 16-hour days, forged a R158bn empire from a measly R1m and a cash shell back in 1988. If Bidvest is what it is — a company that achieved 30% compound growth in sales over the past two decades — it’s entirely because of Joffe.

Contacted this week, he said he wouldn’t go into what was discussed at the board, but said there was “no fight, no argument over assets”.
Everything about Bidvest is still indelibly Brian Joffe, even if he’s putting all his energy into his new venture
He says he remains particularly proud of the “excellent” unbundling last year that split the company into two arms — Bidvest and Bidcorp.
Today, you can’t really head out the door without bumping into something that Joffe built.
You probably run into one of his products plenty of times a day: from mega-investments such as Comair, Rennies Travel, Bidvest McCarthy and BidAir Cargo to the small everyday services like supplying office stationery. And that’s before you even encounter the services company that delivers food to hotels and restaurants all over the world.

You’ll also have spotted the name Bidvest in almost every sporting code — which you’d expect, given that Joffe is a sports nut. It’s plastered all over Premier Soccer League champions Bidvest Wits and, until 2015, also over the less-successful English premiership team Sunderland. Bidvest is also the stadium sponsor of Wanderers.
It’s a reminder that everything about Bidvest is still indelibly Brian Joffe, even if he’s gone and is now putting all his energy into his new venture, Long4Life, which he listed only in April.
On his radio show this week, Bruce Whitfield asked Bidvest CEO Lindsay Ralphs if there had been any clash with Joffe, given his unceremonious departure. Would, he asked, there not be a potential for them to meet in the same waiting rooms, as they’re both now chasing deals for rival companies?
Ralphs replied: “You can never really tell … Long4Life, where Brian is now, [it’s] also on a shopping spree. I can’t really predict the future.”

What is clear is that Long4Life has already done a few savvy, unconventional deals that carry Joffe’s signature. For example, since April, it has snapped up beauty therapy chain Sorbet for R116m and bottling and canning company Inhle Beverages for R360m, and it’s trying to add Holdsport (which owns Sportsmans Warehouse) to its burgeoning portfolio.
It is an entirely predictable path for a man who told this magazine in April that while he planned to do nothing once he left Bidvest, “time erodes that kind of enthusiasm”. “I’m an entrepreneurial type and if opportunities arise that don’t fit exactly within that definition, maybe I’ll do that too,” he said.
Brian Joffe: Why I couldn’t retire
The entrepreneurial dynamo who turned Bidvest into a multibillion-rand conglomerate, retired last year. Now he’s making a comeback, saying he wants …
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4 months ago

It’s been this way ever since, as a 30-year-old, he borrowed R49,000 from his parents in 1978 to buy half of a pet-food business. When he later sold that business for $1m, Joffe promptly retired to the US, at the age of 32, to play golf “every single day”.
But, to no-one’s surprise, he couldn’t stay away from the adrenaline. So he moved back to SA in 1982, and spent a spell with Manny Simchowitz as MD of industrial group Weil & Ascheim (he credits Simchowitz for an unerring focus on returns).

Then, in 1988, Joffe put together the R23m deal to buy catering business Chipkins, which formed the building block upon which the contemporary Bidvest was created. And, R158bn in value later, we all know how well that turned out.
Ralphs knows too. As he said on radio, Joffe “taught us everything we know”. So you can certainly see Joffe bumping heads with Bidvest at some stage. In which case, Ralphs better be on top form; there’s a long list of bruised executives who felt they could one-up Joffe on a deal and now know better.

By Rob Rose for Business Live

Bidvest group, buoyed by a war chest of $1 billion (R12,9-billion), is on the hunt for local and international acquisitions as the company seeks organic and acquisitive growth.

Chief executive Lindsay Ralphs said the company was continuously pursuing select international and local opportunities to complement its existing offerings.

“We have ample headroom to accommodate expansion opportunities. We’d be able to raise $1 billion should we need it, or about R14 billion to R15 billion, and that has been confirmed by a lot of the bankers,” Ralphs said.

The company’s expansion plans come a year after it spun off its food service division, Bidcorp, in a $5 billion listing on the JSE.

In October, Bidvest acquired Brandcorp, a distributor of industrial and consumer products.

The group said the acquisition of Brandcorp contributed R535 million to its revenue and R71 million to its operating profit for the period.

The food service unit accounted for 60 percent of Bidvest’s sales in the six months to the end of December 2015.
The group yesterday reported a 4.4 percent rise in half-year profit.

Earnings up

Headline earnings per share increased to 510.3cents for the six months to December, from 489c in the comparative period.

Revenue rose 4.1 percent to R36 billion, and the company’s trading profit increased by 3.2 percent to R2.8 billion.
Cash generated from operations shot up 30 percent to R1.8 billion.
Bidvest declared an interim dividend of 227c per share.

The company’s seven businesses had mixed results for the period.

The services unit went up 5.2 percent to R6.4 billion, accounting for 27 percent of the company’s trading profit.
The freight business’s revenue decreased by 18.6 percent to R2.4 billion, while the automotive division reported a 1.8 percent increase in revenue to R12.3 billion.

The office and print business’s revenue declined by 1.4 percent to R5 billion.
The financial services unit’s revenue surged by 32.7 percent to R2 billion, while the commercial business’s revenue increased by 24.8 percent to R3.7bn.

The company’s electrical business recorded a marginal increase of 1.9 percent to R2.7 billion.
However, profits of its Namibian business nosedived by 80 percent to R23 million, accounting for just 1 percent of the group’s total trading profit for the period.
Bidvest said this was because of a reduction in fishing quotas. The group owns 52 percent of Bidvest Namibia.

Bidvest shares dropped 1.02 percent on the JSE to close at R163.31.

By Kabelo Khumalo for www.businesslive.co.za

Bidvest CEO pleads for economic stability

Bidvest has released its first results since unbundling its food division into separately listed Bidcorp in May.

The previous year’s figures were restated, with the divisions now housed in Bidcorp accounted for as discontinued operations.

The smaller group says revenue for the year to end-June grew 3.5% to R91.8bn but aftertax profit for the year from continuing operations fell 28.5% to R2.4bn.

A final dividend of R2.32 was declared, taking the dividend for the year to R7.14. Although down from the previous year’s R9.09, the company says this “needs to be viewed in the context of the interim dividend of R4.82 which was paid as part of the larger group, prior to unbundling”.

CEO Lindsay Ralphs included in his commentary an appeal for an end to disruption of key economic institutions.
“As one of SA’s largest employers and a significant investor in the local economy, Bidvest shares the concerns that have been raised by business leadership relating to the ongoing disruption of some of our country’s most important economic institutions. We appeal for a rapid resolution of this current state of affairs.”

Under its new structure, Bidvest fields seven divisions. Of these, freight is the biggest revenue generator but services division is the biggest trading profit centre.

Freight contributed nearly a third of the turnover Bidvest earned in SA. While most of Bidvest’s operations outside SA are now housed in Bidcorp. The group retained Bidvest Namibia, which added R4.3bn turnover to the R90bn contributed by its South African operations.

“Global freight trade remained depressed, and as a consequence, volumes declined. This division’s focus in 2016 has therefore been on innovation and flexibility in an effort to contain costs and enhance efficiencies. The 3.8% decline in trading profit is considered satisfactory given the significant decline in the movement of commodities — particularly minerals — out of the country. Grain imports assisted marginally in the last quarter. The continued import of grain will be positive for this division in the new financial year,” the results statement said.

While freight contributed a third of South African turnover, it contributed a fifth of operating profit. Services was nearly the opposite, contributing 19% of South African turnover and 29% of operating profit.

Brands within the services division included BidAir, Security, Cleaning and Bidtrack, which all posted excellent results, the company said in its statement.

Bidvest’s financial services division reported the fastest turnover growth of 64% to R3.3bn while its trading profit grew 10.4% to R582m.

“Bidvest Bank improved trading profit by 30%, and the insurance company performed satisfactorily, but was impacted by the decline in the mark-to-market profits of its equity portfolio. This division posted an overall increased trading profit of 10.4%,” Bidvest says.

Its commercial products division grew turnover 42% to R5.9bn and trading profit 42% to R745m.
This division was boosted by the acquisition of Plumblink and it is in the process of acquiring Brandcorp.
pic

“The result was slightly below my expectation — closer to indifferent than bad,” Avior Capital Markets analyst Mark Hodgson says. “The outlook should be for growth assisted by acquisitions.”

Ron Klipin, a portfolio manager at Cratos Capital, says the results were in line with expectations. “Bidvest is a different entity, having unbundled its global food division, which now has a market cap of R90bn, against Bidvest’s R51bn.”

“The sum of the parts is now greater than the original Bidvest Group, having unlocked value for shareholders. Bidvest is now a diversified industrial business, with seven entities, ranging from services to trading divisions and substantial property holdings,” he says.

“The diversification is a positive aspect, with no segments having more than a 30% contribution,” Klipin says. He said services made up 56% of trading profits, with the trading distribution division making up the rest.

Good cash flow from operations and gearing of 26% gave Bidvest plenty of scope for acquisitions, both in SA and abroad.

Meanwhile, noncore assets such as Comair, Adcock Ingram and Bidvest’s remaining share in India’s Mumbai Airport could soon be disposed of “at the right price”.

“Lazy assets, which do not contribute benchmark returns, could also be on the chopping board,” he says, adding that this would probably not include property assets — their profits contributed about R300m.

By Robert Laing with Mark Allix for Bdlive

Bidvest, whose business spans pharmaceuticals, auto showrooms, shipping and catering, said diluted headline earnings per share totalled 1,001.5 cents in the six months to end-December, compared with 886.3 cents a year earlier.

The group said tough trading conditions at home, where sales grew by only 3%, weighed on its results, but its food services business showed exceptional growth in Britain, Europe and some of China’s large cities.

Office and print

The consolidated business, combining Office and Paperplus, achieved satisfactory results, with turnover 3,5% higher at R5,2-billion (2014: R5-billion) and trading profit up 24,7% at R415,3-million (2014: R333,1-million).

Lithotech was buoyed by export income and changes to its service mix. Bidvest Data created a competitive advantage from the shift to electronic communication. Bidvest Packaging maintained strong momentum after a period of consolidation. Rotolabel achieved a pleasing turnaround, as did Silveray. Kolok performed strongly, with rand weakness contributing to its results.

Performance at Waltons continued to disappoint. A strong performance was put in by Konica Minolta. Zonke Monitoring Systems again did well. Among the furniture businesses, Cecil Nurse performed exceptionally well and the furniture contribution was well above budget.

“The average rand exchange rate weakened against sterling and the euro, resulting in a 3,7% benefit to trading profit,” the company said.

Bidvest announced earlier this month that it plans to list its food services business separately on the Johannesburg Securities Exchange.

In the half year to 31 December, 2015, Bidvest achieved 13% growth in headline earnings per share (HEPS) to 1 001,5 cents despite challenging trading conditions, particularly in Southern Africa.

Highlights of Bidvest’s half-year results include:

  • HEPS up 13% to 1 001,5 cents (2014: 886,3 cents);
  • Most Foodservice businesses achieved real organic growth in local currency;
  • Improved trading result by Bidvest South Africa;
  • Turnover up 9,6% to R114,5-billion (2014: R104,4-billion);
  • Trading profit rises 11,6% to R5,2-billion (2014: R4,6-billion);
  • Strong contributions by Europe and UK;
  • Gross profit percentage rises to 20,5% (2014: 20,1%); and
  • Cash generated by operations up 6,5% to R6,4-billion (R6-billion).

Source: www.biznews.com

Bidvest CEO to step down

Bidvest founder and CEO Brian Joffe will step down after a deal to spin off and separately list the industrial conglomerate’s food business goes through, he said on Monday.

He made the announcement after reporting that Bidvest saw a 13,1% rise in half-year profit on Monday, buoyed by its food services business and the effect of currency depreciation in its home market.

Bidvest, whose business spans pharmaceuticals, auto showrooms, shipping and catering, said diluted headline earnings per share totalled 1 001.5 cents in the six months to end-December, compared with 886.3 cents a year earlier.

Headline EPS is the main profit gauge in South Africa and strips out certain one-off items.

The group said tough trading conditions at home, where sales grew by only 3%, weighed on its results, but its food services business showed exceptional growth in Britain, Europe and some of China’s large cities.

“The average rand exchange rate weakened against sterling and the euro, resulting in a 3,7% benefit to trading profit,” the company said.

Bidvest announced earlier this month that it plans to list its food services business separately on the Johannesburg Securities Exchange.

Source: Fin24

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