March 4, 2019 / 6:34 AM / 9 months ago

UPDATE 1-Bidvest Group's HY earnings rise 9.6 pct boosted by services, freight

(Adds details, CEO comments)

By Nqobile Dludla

JOHANNESBURG, March 4 (Reuters) - Bidvest Group’s half-year earnings rose 9.6 percent, the South African firm said on Monday, bolstered by services, freight and office and print divisions, despite a sluggish economy and political uncertainty.

South African companies have been struggling to lift their earnings in a sluggish economy at home, where industrial activity and consumer spending is lacklustre. There is also political uncertainty ahead of the national elections in May.

The trading, distribution, and services firm said headline earnings per share (HEPS) for the six months ended December rose to 629.1 cents from 574 cents a year earlier. HEPS is the main profit measure in South Africa, which excludes certain one-off items.

Normalised HEPS, which exclude acquisition costs and amortisation of acquired customer contracts, were 635.7 cents, while the group’s trading profit increased 6.3 percent to 3.3 billion rand ($233.02 million).

The services division’s trading profit broke through the 1 billion rand mark, with strong domestic and overseas growth underscoring its annuity nature, the group said, while office and print’s result “was pleasing” given the structural decline of the industry in which it operates.

The freight division’s trading profit rose 8.6 percent to 700.1 million rand. Freight volumes were buoyant for the first four months, but slowed over the latter two months.

“This is a good result despite the frail economic backdrop and significant business and political uncertainty,” Group Chief Executive Lindsay Ralphs said in a statement.

“It again demonstrates the value of our diversified portfolio and the quality of the underlying businesses.”

On Friday, Bidvest made an offer of 10.50 Namibian dollar ($0.7418) per share to acquire all outstanding shares of Bidvest Namibia that the group does not already own, subject to the approval of a delisting resolution.

Bidvest, which also operates in financial services and automotive retailing, declared an interim dividend of 282 cents per share, up 10.6 percent. ($1 = 14.1618 rand) ($1 = 14.1550 Namibian dollars) (Reporting by Nqobile Dludla; Editing by Shreejay Sinha)

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