This article first appeared on GuruFocus .
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Revenue:Increased by 4% to ZAR 67 billion.
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Profitability:Increased by 7%.
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Gross Margin:Increased by 43 basis points to 28.1%.
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Operating Expenses:Increased by 3.4%, and only 1.2% excluding acquisitions.
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Trading Profit:Increased by 7% to ZAR 6.7 billion.
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Trading Margin:Expanded from 9.8% to 10.1%.
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Cash Generated by Operations:Increased by 36%.
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Free Cash Flow:ZAR 3.8 billion, up from ZAR 2 billion last year.
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Net Debt to EBITDA:Remains unchanged at 2.2 times.
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Return on Funds Employed (ROFE):37.6%, compared to 37.9% in the prior year.
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Return on Invested Capital (RIC):13.4%, compared to 14.4% in the prior year.
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Interim Dividend:ZAR 4.95 per share, up 5.3% on the prior year.
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Hygiene Profit Growth:Up 20%, with profit margins at 18.2%.
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Services International Revenue:ZAR 22.5 billion, up 5%.
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Services International Trading Profit:ZAR 2.2 billion, up 8.3%.
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Freight Revenue:ZAR 4.5 billion, with a 4.2% decline.
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Freight Trading Profit:ZAR 1.2 billion, up 7%.
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Services South Africa Revenue:ZAR 6.9 billion, up 7%.
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Services South Africa Trading Profit:ZAR 793 million, up 10%.
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Branded Products Revenue:ZAR 6.9 billion, down 1.6%.
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Branded Products Trading Profit:ZAR 748 million, up 5.4%.
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Commercial Products Revenue:ZAR 8.6 billion, up 2.5%.
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Commercial Products Trading Profit:ZAR 594 million, up 9.7%.
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Automotive Revenue:ZAR 14.8 billion, up 7%.
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Automotive Trading Profit:ZAR 515 million, up 1.8%.
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Adcock Revenue:ZAR 4.8 billion, up 3%.
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Adcock Trading Profit:ZAR 620 million, up 20%.
Release Date: March 02, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Bidvest Group Ltd ( BDVSF ) reported a 4% increase in revenue and a 7% increase in profitability, showcasing resilience and operational excellence.
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The company achieved a significant highlight in free cash generation, with cash generated by operations up by 36% and free cash flow 2 billion rand higher than the previous year.
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The hygiene operations have shown strong profit growth, with a 20% increase in the first half and profit margins accelerating from the industry norm of around 15% to 18.2%.
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Bidvest Group Ltd ( BDVSF ) successfully completed its second Eurobond issuance for $500 million, which was used to part redeem the existing Eurobond and pay down a portion of the offshore RCF.
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The company has a strong balance sheet with gearing levels remaining unchanged at 2.2 times net debt to EBITDA, and a robust cash conversion rate of 70%.
Negative Points
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The M&A pipeline is now materially depleted, with only very small transactions expected to be finalized in the second half.
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The Bidvest Bank transaction with Access Bank PLC was terminated due to Axis Bank's inability to secure the required approval within the long stop date.
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The automotive division faced margin pressure due to the influx of lower-priced Chinese vehicles, impacting profitability.
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The freight division experienced a 4.2% decline in revenue due to lower clearing and forwarding volumes in South Africa and Namibia.
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The branded products division saw a 1.6% decline in revenue due to reduced and delayed spend from large government clients and increased competition from lower-priced imports.
Q & A Highlights
Q: Can you please speak of any upcoming debt refinancing requirements or plans? A: Mark Steyn, Chief Financial Officer, stated that there are no significant maturities in the near term. The 366-day general banking facilities roll on a continuous basis. For FY28, the company plans to address the EUR750 million facility maturing, but there are no other significant concerns at this time.
Q: Do you plan to list the global hygiene business in the future? A: Nompumelelo Madisa, Chief Executive Officer, clarified that there are no current plans to list the global hygiene business. The focus is on creating scale globally and extracting synergies to build a strong platform. The company is not having conversations about listing the hygiene businesses in the short, medium, or long term.
Q: Why are the margins in the hygiene business higher than the industry average, and are they sustainable? A: Nompumelelo Madisa explained that the higher margins are due to integration efforts, particularly in the UK, and the acquisition of Citron operations in North America. Initiatives such as sourcing, technology, and AI are driving these margins. The integration in the UK has been a significant margin driver, and the company believes these margins are sustainable.
Q: What is the view around the bank disposal costs now that the offer from Axis Bank has expired? A: Nompumelelo Madisa mentioned that the price from two years ago was a 20% premium to NA, but due to performance drag over the past two years, the company is unlikely to achieve the same price. However, they are committed to negotiating the best possible price to optimize the sale.
Q: What is the organic versus acquisitive split on trading profit and revenue? A: Mark Steyn stated that gross revenue increased by 3.7%, with organic growth contributing 2.1% and acquisitive growth contributing 1.6%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
