The Bidvest Group Limited

Bidvest reported revenue of ZAR 130.3 billion, up 2.9%. Gross profit rose 5.2% and gross margin improved to 28.3%, while trading profit increased 8.4% to ZAR 13.1 billion. Continuing headline EPS advanced 6%, and group EPS rose 1.3%; the final dividend was ZAR 4.83 per share, up 6.6%. Cash generated by operations after working capital increased 16.9% to ZAR 17.2 billion, free cash flow was ZAR 12.5 billion, and cash conversion improved to 109% from 95%. Net debt decreased ZAR 4 billion and net debt-to-EBITDA moved to 1.9x from 2.2x. Looking ahead, management expects continued deleveraging in FY2027, with net debt-to-EBITDA targeted closer to 1.5x to 1.8x, and said the target does not include proceeds from Bidvest Bank or the post-year-end Adcock share sale. The group also expects no material M&A in 2027 and plans to use free cash flow to pay down debt.

Mpumi Madisa framed FY2026 as a year in which earlier investments in hygiene, automotive diversification and terminal extensions started to pay off. She stressed that growth was broad-based across every division, cash generation was the group’s key feature, and capital discipline remained central. Her tone was confident but measured, with repeated emphasis on execution, deleveraging, and converting growth platforms into better returns.

Mark Steyn highlighted that the business outperformed despite a tougher second half, with trading profit growth accelerating to 8.4% for the full year and second-half growth of 9.9%. He pointed to improved gross margins, strong expense control, 109% cash conversion, and free cash flow of ZAR 12.5 billion as evidence of stronger operating quality. He also noted net debt reduction of ZAR 4 billion, leverage at 1.9x, weighted average cost of debt at 6.3%, and a FY2027 tax rate expectation of 25.5% to 26%.

Management was pressed on Bidvest Bank timing and valuation, and said they would not comment in detail while negotiations are ongoing; once SPAs and regulatory approvals are in place and the transaction is near completion, a SENS announcement will provide the full picture, including accounting treatment. On the associate impairment/write-off, Mark said normalized continuing HEPS would have improved from 5.9% to 8.7% if adjusted. Questions also covered Services International synergies, where management said hygiene constant-currency profits grew across regions, PHS benefited materially from Citron integration, and Citron North America synergies will mainly flow later as old stock rolls through; they also said new contracts lost to restructures should now be in the base and new wins should contribute in FY2027.