The Bidvest Group Limited

Group revenue was ZAR 66.7 billion, up 3.7%/4% year on year. Gross profit increased 5.3% and gross margin improved 43 basis points to 28.1%; trading profit rose 6.9%/7% to ZAR 6.7 billion, and trading margin expanded to 10.1% from 9.8%. HEPS increased 5.1% and normalized HEPS increased 5.3%; the interim dividend was ZAR 4.95 per share, up 5.3%. Cash generated by operations rose 36%, underlying cash generated by operations before working capital was up 7.2% to ZAR 8.7 billion, working capital absorption was ZAR 2.6 billion versus ZAR 3.6 billion last year, cash conversion improved to 70%, and free cash flow was ZAR 3.8 billion versus ZAR 2 billion a year ago. Net debt to EBITDA was 2.2x and ROFE was 37.6% versus 37.9% prior year; ROIC was 13.4% versus 14.4%. Management did not give formal next-quarter guidance, but said they expect stronger second-half cash generation, improving organic growth in H2, continued hygiene strength, some moderation in full-year Services SA growth due to later contract starts, and ongoing deleveraging toward below 2x net debt to EBITDA.

Mpumi Madisa emphasized that the half-year showed resilience, operational discipline and progress on the group’s long-term portfolio strategy. She said Bidvest has rebuilt its international footprint, with hygiene now central to the offshore platform, and highlighted that the group is focused on sustainable profit growth, returns and cash generation. Her tone was confident but measured: she acknowledged lower returns after years of capital deployment, while stressing that the business is comfortable with the scale of offshore operations and is now focused on improving group returns.

Mark Steyn focused on margin improvement, cash conversion and balance-sheet management. He said gross margin improved to 28.1%, operating expenses rose only 3.4% overall and 1.2% organically, cash conversion improved to 70%, and free cash flow rose to ZAR 3.8 billion. He also detailed funding actions, including a $500 million 7-year Eurobond priced at 6.2%, a GBP 130 million 5-year term facility at 5.6%, and ZAR 2.3 billion of domestic bonds, with proceeds used to refinance debt, fund Aquatico and redeem ZAR 2.1 billion of preference shares; weighted average debt cost was said to be 6.4% and 63% of debt remains variable rate.

Analysts asked about upcoming refinancing needs, and management said there are no significant near-term maturities; the main item to plan for is an FY '28 RCF term facility. Questions on whether Bidvest intends to list the global hygiene business were answered firmly: management said that is not being discussed in the short, medium or long term, as the focus is on scaling the platform and extracting synergies. On Bidvest Bank, management said the Access Bank transaction failed because approvals were not secured, the process has restarted, and the company is now aiming to optimize price while also solving for debt repayment needs. An automotive question on the Dekra acquisition contract loss was addressed by saying the issue was identified in due diligence, priced into the deal, and understood to remain for a period of time before later rolling off.