Bidcorp trading update

Bidcorp stuck out a trading statement in the afternoon, that coincided with their AGM. It was more of an update than an actual trading statement, as they only have around 4 months of data to work with. Plus, as they have a significant business in the UK, you can imagine that they are all trying to work out what this means, the implications of a weaker UK currency and potentially weaker UK economy. Bidcorp also, as a result of the splitting of the business from the original Bidvest, have very little from a comparisons point of view.

They do say: "Overall trading within Bidcorp for the first 4 months of the financial year 2017 has been good and the positive momentum achieved in the financial year 2016 has continued. Currency volatility continues to positively impact Bidcorp's Rand reported results with the depreciation of the Rand against the Euro and Australian Dollar more than offsetting the appreciation of the Rand against Sterling following Brexit."

So .... we will have to wait and see what transpires. The Brexit "thing" next event is December where the courts decide whether or not the government appeal is successful. If not, then it goes to a parliamentary vote, and politicians will decide in a vote whether or not they want to take themselves away from 43 years of treaties. Try and unpick that all in a hurry. There is the small matter of 508 million Europeans here, who will have to live with the consequences and the precedent set. We watch, like all others.

It is the introduction line in the trading statement that continues to attract us to this investment: "Overall conditions within the global foodservice industry remain positive and continued growth opportunities remain in all our trading geographies. Many of Bidcorp's international foodservice peers have reported improved results benefitting from positive underlying market conditions."

The stock initially rallied over 6 percent, and then some more, it settled back (on a very poor day for the markets overall) and closed 3 percent higher on the day. Forget for a second about kale and beets crisps and all the other healthy eating trends that have captured rich people and millennials for a moment. Time is something of a luxury that many people simply do not have. So eating fast, and making sure that it is healthy, will continue to become a trend.

Not only will people look for more ready to cook meals, they will look for more ready prepared meals. And this is where Bidcorp are likely to benefit, along with their peers. By delivering more prepared foods to supermarkets and restaurants, with the correct mix of quality (and trends), they will capture a large slice of the emerging eating habits of people. We continue to accumulate what is a good business with great people and excellent prospects.