The Bidvest Group said it delivered a credible financial performance for its full year ended June 2020, despite the headwinds presented by an already constrained South African economy pre-Covid-19 and the pandemic’s severe impact on the final quarter.
However, it said that the current conditions has meant retrenchments across its entire group.
At the start of September, Bidvest said it anticipates up to 400 employees in its personal banking, business banking and support divisions will be affected by retrenchments, while it is unclear as to how many employees are affected in its other divisions which include freight, branded products, and property
Group revenue from continuing operations was R76.5 billion (2019: R76.1 billion), while trading profit increased 3% to R6.9 billion from continuing operations, before R1.6 billion in Covid-19 charges, it said.
Trading profit declined 19.9% after accounting for Covid-19-related charges.
Almost two thirds of profit originated from the services businesses – comprising the services, freight and financial services divisions – which provided a defensive underpin, Bidvest said.
Normalised headline earnings per share (HEPS), excluding acquisition costs, amortisation of acquired customer contracts, fair value adjustment to Adcock inventory, Bidvest’s share of Comair’s full impairment of an outstanding SAA settlement and Covid-19 expenses – declined by 23%.
HEPS from continuing operations decreased by 59.5% to 553.2 cents per share.
On 4 March 2019, Bidvest announced the appointment of Mpumi Madisa as chief executive-designate. Current chief executive, Lindsay Ralphs has now reached his retirement age and Madisa will assume the position of Bidvest CEO, effective 1 October 2020.
Following a detailed strategic review of all Bidvest businesses, the group decided to divest from Bidvest Car Rental and Bidair Services. Formal disposal processes have progressed since year end. “Management’s preference is to sell the businesses to preserve as many jobs as possible. Bidvest Car Rental was disclosed as a discontinued operation, Bidvest said.
“In light of the extraordinary levels of uncertainty as it relates to the economies and environments in which we operate and the restructuring actions taken, the board believes that the decision to not declare a final dividend balances the interests of all stakeholders,” the group said.
The pandemic will result in long term socio-economic shifts and structural changes. In recent weeks, Bidvest right-sized operations to ensure its operating models remain relevant and future-fit, reinforces competitive positions and ensures the businesses has sufficient scale for growth.
“This, unfortunately, led to retrenchments across all six divisions,” said Ralphs.
“Overall, Bidvest expect the uncertain and fragile operating environment to persist. Bidvest’s basic-need services and everyday essential product ranges should stand us in good stead, especially when coupled with an innovative, value-adding mindset.
“In recent weeks, we have noted anecdotal market share gains across many of our Commercial Products businesses as we build stock available to trade,” the chief executive said.