This article first appeared on GuruFocus .
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Revenue Growth:7.1% increase in rands, 6% in constant currency.
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Gross Margin:Stable at 24%.
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Trading Profit:Up 8.1% in rands, 7% in constant currency.
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Trading Margin:Increased from 5.3% to 5.4%.
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HEPS Growth:8.5% increase in rands, 7% in constant currency.
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Dividend Growth:Up nearly 10%.
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Net Debt to EBITDA:Slightly below previous year.
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Cash Flow:Cash generated by operations up 8% before working capital, 27% after working capital.
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Australasia Revenue:Up 4.5%.
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UK Revenue:Up 5.8% in constant currency, profitability up almost 10%.
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Europe Revenue:7.6% growth in constant currency, trading profit up nearly 12%.
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Emerging Markets Revenue:Up 4.1%, profitability up 5.2%.
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South Africa Profitability:Approximately 15% growth.
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Net Interest:Slight increase in constant currency.
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Effective Tax Rate:26.7%.
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Warning! GuruFocus has detected 10 Warning Signs with ASX:CAA.
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Release Date: February 25, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Bid Corp Ltd ( BPPPF ) reported a revenue growth of 7.1% in rands, equivalent to 6% in constant currency, despite challenging global economic conditions.
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The company achieved a trading profit increase of over 8% in rands and 7% in constant currency, with trading margins slightly improving from 5.3% to 5.4%.
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The European segment showed strong performance with a trading margin nearing 6%, and profitability growth of nearly 12% in constant currency.
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South Africa and South America demonstrated standout performances, with South Africa achieving approximately 15% profitability growth.
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Bid Corp Ltd ( BPPPF ) maintained a strong balance sheet with stable solvency and liquidity ratios, providing a competitive advantage.
Negative Points
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The Australasian segment, once a star performer, showed flat profitability year-on-year, indicating a slowdown in growth.
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The UK market remains challenging with only a slight margin improvement from 3.4% to 3.5%, and the hospitality industry under pressure.
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Emerging markets presented a mixed performance, with Turkey facing significant challenges due to high inflation and government interference.
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Greater China continues to struggle, particularly with imported product margins being crushed due to retaliatory tariffs and local procurement shifts.
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The company faces ongoing cost pressures from government-imposed labor costs, impacting overall profitability.
Q & A Highlights
Q: Are there any larger acquisitions in the pipeline and what geographies and sectors are of particular interest with respect to M&A? A: Bernard Berson, CEO: Currently, there are no major acquisitions being considered. The pipeline for smaller bolt-ons is also limited due to a disconnect between vendor expectations and our valuation. We are not actively chasing acquisitions unless they are exceptionally strategic or opportunistic at a value-accretive price.
Q: Can you quantify the impact on margin from new large UK contract and infrastructure investments? A: Bernard Berson, CEO: The UK has seen margin improvements partly due to the Whitbread contract activated in September. New infrastructure in Worcester was absorbed without negative impact, unlike previous years where additional infrastructure rollout led to significant costs.
Q: What is the CapEx expectation for the full year and going forward, does Bidcorp need higher capital intensity versus history to keep growth rates at similar levels? A: Bernard Berson, CEO: CapEx will be lower than in previous years, running between 1.5% to 2% of revenue. This follows a catch-up period post-COVID. Infrastructure spend is lumpy and long-term, but we do not foresee elevated levels for a while.
Q: Can you provide some color on the turnaround in New Zealand between Q1 '26 and Q2 '26 and specifically how margins trended relative to the H1 '26 reported level? A: Bernard Berson, CEO: The turnaround began in October with a 5% revenue improvement week-by-week. The New Zealand business is now operating at previous levels with traditional margins, showing a strong recovery.
Q: Does the strong cash generation, given you are moving past the UK CapEx and consistency of your earnings, not warrant having a capital structure with more debt? A: Bernard Berson, CEO: We are considering buybacks and evaluating the best capital structure. Share buybacks need to be accretive, depending on share price and tax treatment of debt used for buybacks. We are still in a net debt position.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
