- Bidcorp, the diversified global food services and catering group, reported an outstanding set of results for the six months to December 2022, which exceeded market expectations.
- Profits soared following a worldwide recovery in the hospitality industry, despite constraints such as global macro challenges, soaring energy costs and supply chain challenges, in addition to high food inflation. The group reported an increase in revenue of 28.1%, resulting in the trading profit escalating by 43.9% to R4.9b
- from R3.4b, with EBITDA margin moved up from 5.4% to 5.9%, despite a challenging operating environment.
The decentralized business model and entrepreneurial flair of the company, and its diverse high-quality portfolio of offerings, such as chilled, frozen, fresh, and prepared offerings, with operations in 35 countries, are all part of the successful long-term growth strategy of the group. - A reopening of global economies, such as Europe, UK, and Australasia, proved to be a catalyst for Bidcorp, with major turnaround potential in Hong Kong and Mainland China, as well as other emerging markets, a positive for 2023.
- The company has delivered consistent growth throughout global economic cycles, aided by successful bolt-on acquisitions in both developed and emerging markets, bolstered by a broad range of products. Growth momentum is likely to slow down in the second half to June 2023 due to a high reporting base in the second half of 2022, but should still report solid earnings in the second half of the year, despite volatility and uncertainty in global markets and a decline in food inflation.
- David Cleasby, the group CEO, has once again delivered an outstanding set of quality results, with a confident increase in the interim dividend of 440c per share, an increase of 46% versus that for the interim period in 2022. In my view, given outstanding execution and growth prospects the premium rating forward PE of around 20x is fully justified. I hold Bidcorp shares in my segregated local portfolios.
By Ron Klipin
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