South Africa-based food services distributor Bidcorp reported an 8.2% increase in trading profit for the second half of fiscal 2026, driven by improved margins and strong cash generation. The company’s full-year trading profit rose 8.2% in constant currency terms, accelerating from 6.9% growth in the first half, while revenue grew 5% in constant currency despite a 1.5% headwind from rand strength. Normalized trading profit growth was estimated at closer to 10% after adjusting for regional conflicts and fuel costs.
Headline earnings per share rose 6.9% in constant currency, while earnings per share increased 9.4%, supported by a 30-basis-point expansion in gross margins. Free cash flow reached 7 billion rand, up sharply from the prior year, while net debt fell to 3.8 billion rand, maintaining a conservative net debt-to-EBITDA ratio of 0.2 times. The company raised its final dividend to 6.25 rand per share, a 7% increase, marking its fifth consecutive year of dividend growth.
Regional performance varied, with Australasia delivering record results, the United Kingdom improving its trading margin from 3.7% to 4.0%, and Europe lifting margins from 5.5% to 6.0%. South Africa posted a particularly strong year with profitability up 15%, while Greater China remained challenging due to ongoing market difficulties and the Middle East faced disruptions from conflict, supply chain issues, and volume declines starting in late February. The company completed five small acquisitions in fiscal 2026 and three more in the first two months of fiscal 2027, though these did not materially impact revenue.
Looking ahead, Bidcorp maintained its long-term revenue growth target of 5% to 6% and set an operating profit growth target above 6%, excluding acquisition impacts. Capital expenditure is expected to moderate to 1.5% to 2% of revenue, while working capital days improved to five, down from eight on a three-month moving average. Food inflation remained subdued at around 1.5%, while general labor inflation ranged between 3% and 4% across its markets.
Chief Executive Bernard Berson emphasized the company’s data-driven approach, noting its 500,000 customers and 400,000 product lines, and reiterated the group’s focus on steady, sustainable growth. The stock rose 1.49% to 43,630 rand after the earnings update, extending gains from its 52-week low of 39,512 rand but remaining 7.5% below its 52-week high of 47,182 rand.
