February 21, 2018 / 11:47 AM / 2 years ago

South Africa's Bidcorp weighs offer for majority of UK logistics unit

JOHANNESBURG (Reuters) - Bid Corporation Ltd (Bidcorp) (BIDJ.J), an international food distributor, is considering an offer for its UK transport business as it looks to focus on its core operations.

Bidcorp, which has a presence in five continents, has been buying small firms it can bolt on since listing in 2016, as part of Chief Executive Bernard Berson’s ambitions to reshape the Johannesburg-based group.

Bidcorp, which supplies hotels, restaurants and industrial caterers, is at the same time pulling back from low-margin, high-volume logistics activities, and rebranding as “Bidfood” to reinforce its image as a food service group that vies with the likes of global leader Sysco Corporation (SYY.N).

“We have received a credible and realistic commercial offer for the UK Contract Distribution (CD) business which we are actively pursuing,” Berson said, adding that the company will be able to update the market in the next few months on the outcome.

He gave no indication of the price.

“As we’ve stated over many years the logistics business is non-core to us. So we are acting on that and doing what we said we would.”

The CD business accounts for the bulk of the underperforming UK Logistics business which buys, warehouses, picks and delivers a range of products.

In the six-months to end December, Bidcorp spent 588.2 million rand (36.09 million pounds)on acquisitions which include a 70 percent stake in a Munich-based foodservice business and smaller bolt-on acquisitions in Australia, Spain, New Zealand and Turkey.

“We do have a pipeline of future bolt on acquisitions and it’s likely that we could spend another half a billion (rand) plus on bolt on acquisitions in the next six months,” Berson said.

Bidcorp posted headline earnings per share (HEPS) from continuing operations of 640 cents for the six months to the end of December, compared with 589.3 cents a year earlier.

Bidcorp declared an interim cash dividend of 280 cents per share, a 12 percent increase from the prior period.

Its share price was up 1.8 percent to 269 rand by 1120 GMT.

Reporting by Nqobile Dludla; Editing by Sherry Jacob-Phillips/Keith Weir

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