Bidcorp Sees 8.2% Rise in Trading Profit Amidst Challenging Market Conditions

Bid Corporation, an international foodservice distribution group, has reported an 8.2% increase in trading profit at constant exchange rates for the first four months of its 2027 financial year. This growth was primarily driven by improved margins and performance in Europe and the UK. Despite facing subdued consumer spending and higher operating costs, the company's trading profit rose to 1.6% in rand terms.

The company's revenue increased by 2.4% at constant exchange rates but declined by 4.3% in rand terms. Bidcorp's gross profit margin expanded to 25% from 24% in the corresponding period, attributed to procurement initiatives, changes in customer and product mix, and the development of its own brands. Additionally, its earnings before interest, tax, depreciation, and amortisation (ebitda) margin rose to 6.6% from 6.1%.

However, the cost of doing business for Bidcorp increased to 19.1% of revenue from 18.5%, with labour, fuel, and energy costs under pressure. The company noted that trading conditions tightened as the period progressed, with subdued consumer spending, higher energy and fuel costs, geopolitical uncertainty, and weaker economic growth impacting its markets. Despite these challenges, Europe and the UK were key contributors to the group's performance.

Bidcorp's European operations saw a 6% increase in trading profit, while the UK business grew by more than 10% at constant exchange rates. In emerging markets, trading profit rose by 14% despite flat revenue. The company's South African operations maintained momentum, driven by market-share gains and customer growth. Its Greater China business faced challenges, with sales under pressure.

In other regions, Bidcorp's Australian operations reported increases in revenue and trading profit, while New Zealand continued its recovery. This was supported by improved efficiency, additional capacity, and the acquisition of a business operating in the Pacific Islands. The company has concluded five acquisitions since June, with the most significant being a Pacific Islands business.

CEO Bernard Berson stated that the group made a solid start to F2027 despite an operating environment that remains challenging and uncertain. The performance reflects the strength of the teams, the resilience of the diversified portfolio, and the continued focus on disciplined execution and customer service.

Looking ahead, Bidcorp expects trading in early November to be in line with expectations as it enters the festive trading period in several markets. The company anticipates that food price inflation will impact selling prices over the next few months. However, it expects the negative effect of currency movements on its reported results to ease over the rest of the financial year.

Key points

• Bidcorp's trading profit rose 8.2% at constant exchange rates despite subdued consumer spending.
• The company's gross profit margin increased to 25% from 24% in the corresponding period.
• Bidcorp's geographic diversification and positions in local markets provide opportunities for growth.