Bidcorp confident of recovery as restrictions ease

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Bidcorp confident of recovery as restrictions ease

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Published Date: 2021-02-24 | Source: Stephen Gunnion | Author: Stephen Gunnion

Bidcorp confident of recovery as restrictions ease

The food services company has withheld an interim dividend but says market conditions should rebound as social restrictions are lifted.

Bidcorp says the first-half of its financial year started relatively well, with most geographies appearing to come out the worst of the first wave of Covid-19. That resulted in a positive financial performance from its biggest operations in Europe and the UK in July and August.

However, the foods services group says business took a turn for the worse in September in Europe and the UK as the second wave of the pandemic set in, resulting in more lockdowns that affected the hospitality, tourism and leisure industries that it services. Although its operations in Australia, New Zealand and Asia continued to perform well, and its emerging markets businesses continued to improve, it still reported a big decline in first-half earnings.

Bidcorp said the requirement of big companies, many of which are located in urban centres, for employees to work from home reduced demand from national customers for its food services. However some of that had shifted to suburban areas and more rural locations as people continued to look for opportunities to eat out. Non-discretionary demand from institutional customers including hospitals, care homes, prisons, military and government departments remained stable but below pre-covid levels. Still, it said it was confident that it would see a quick rebound in market conditions in all geographies as social restrictions and containment measures started to ease.

Revenue fell 11% to R60.8 billion for the six months to end-December and trading profit shrank 37% to R2.4 billion. Headline earnings per share came in 46% lower at 391.6c. It hasn't declared an interim dividend.

Its shares closed 1.7% down at R282.98 yesterday.





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