Bidcorp’s diversified portfolio of international food service and technology businesses returned R5.2 billion to shareholders in dividends and share buybacks in the year to June 30, which is 36% higher than R3.8bn the year before.
A final cash dividend of 625 cents per share increased the total dividend to 1,240 cents per share, an increase of 6.9% over the previous year.
“Ever conscious of the need to balance reinvestment in the businesses and improve returns on invested capital, we took advantage of the share price weakness and the considerable free cash flow generated, to buy back shares worth R1.1bn – just under 1% of shares in issue,” said CEO Bernard Berson in the results released Wednesday.
Garth Barry, equity analyst at Ashburton Investments, said Bidcorp delivered a good set of headline earnings at R27.01 per share, which was in line with analyst consensus forecasts.
“The balance sheet is in a strong position with... ample room for additional shareholder returns or growth investment,” said Barry. He said improvement in trading margins helped to keep profit growing at a healthy rate.
Both the UK and Europe segments delivered trading profit growth above 10% in constant currency. “These regions have seen heavy investment in recent years and continue to bear fruit. Management commentary suggests the pipeline of in-country acquisitions remains active, where Bidcorp has a strong track record of value creation,” said Barry.
Bidcorp concentrates on the wholesaling of food and allied products to the eating-out-of-home market, supported by Own Brand development and imported product ranges, and selective value-add manufacturing.
Constant currency headline earnings per share (HEPS) increased by 6.8% to 2,737.9 cents per share. As an international business with 95% of activities outside of South Africa, constant currency reporting is Bidcorp’s truer measure of actual performance.
In rand, HEPS grew by 5.4% to 2,701.4 cents per share, reflecting the negative impact of the stronger rand against many of Bidcorp’s operating currencies.
Constant currency trading profit increased by 8.2% to R14bn. Trading margins that were up by 20 basis points at 5.7%.
“Our global trading environment has been characterised by softer consumer spending, higher yet stable core inflation and generally subdued economic activity, and since March, significant geopolitical disruption,” said Berson.
The European businesses reported double-digit growth in revenues and trading profits in home currencies.
The UK delivered a solid performance, particularly in its core food service operations, with the fresh business benefiting from a small acquisition.
Australasia saw modest growth this year, impacted by broadly weaker consumer demand.
Emerging Markets reported a flat performance, but there were some “excellent business performances” within this, said Berson.
After adjusting revenue for estimated food-basket inflation and acquisitions, Bidcorp’s top line grew by over 3% in real organic terms.
Activity in the first quarter was impacted by unseasonably cold and wet weather in the Northern Hemisphere summer, coupled with some weather-related flooding in Eastern Europe.
Third quarter activity was “flattish,” again impacted by cold weather in Europe and the timing of Easter holidays, but activity rebounded well into the fourth quarter despite the Middle East conflict.
“Cost inflation remains consistently sticky, driven by ongoing wage pressures with higher supply chain and distribution costs,” said Berson.
Five bolt-on opportunities were concluded, adding to Bidcorp’s geographic reach or product range in existing geographies.
The cost of doing business (CODB) increased only marginally to 19.1% from 19%, a good result considering higher activity levels and the high-service model. Overall costs were driven by higher cost inflation, particularly labour and volatile fuel prices.
Core inflation continues to track materially higher than food inflation. The gains in gross margins have more than offset the small increase in CODB.
Berson said their growth is underpinned by well-located, scalable distribution infrastructure, supported by investment in technology and systems to enhance efficiency, service levels, and resilience.
Activity levels in the group through July and into August represented a continuation of the positive momentum experienced in the fourth quarter of 2026.
“The summer weather in Europe, which plays an important part of driving consumer spending and activity levels, has been good,” he said.
Four bolt-on acquisitions have already been concluded in the new financial year, the most significant of which is the Pacific Islands business, which has a Fijian distribution arm as well as a New Zealand-based export business. Several more opportunities were under consideration.