Meeting with the CFO

On Monday the 18th of September I had the pleasure of meeting with Bidcorp's CFO David Cleasby at their head office in Sandton. Bidcorp as you may know is our largest holding in the food sector.

The business has presence in over 30 countries and are market leaders in countries like Australia and New Zealand. Bidcorps offshore businesses account for 90% of earnings and RSA is only 10% making them the perfect Rand hedge.



Bidcorp's typical customers are the owners of restaurants, who happen to be chefs most of the time. Bidcorp's growth will come from increasing their 'Routes To Market' (selling more things to the same customer), from entering a new market organically and through small bolt-on acquisitions, where Bidcorp can bring in their 'Know-How' and systems to the table. They focus is on increasing the basket of goods purchased by chefs; since the truck is already heading that way, any additional items purchased is pure margin. In the near future, there is big margin growth to come as a result.

The food industry is very fragmented and this translates to plenty of opportunities for Bidcorp. Their reps have their ears on the ground and they help spot gaps in the market. This kind of attention to detail allows Bidcorp to see exactly what the needs of the customers are and fulfill them. If the customer is happy with the service, they will ask for repeat business, and the income becomes annuity in nature. As long as the eating out trend persists and the middle class emerges, we expect Bidcorp to benefit handsomely and are happy to own this one for our clients for the long term.