Bidcorp released what they call their "Capital Markets Trading Update" on Tuesday where they basically tell us how the business is faring across its international operations. The food-services company highlighted a few points including rising costs for retailers and food price inflation which is affecting margins for these operators.
The company continues to trade positively with growing sales as per managements expectations in its big markets i.e. UK, Europe, Australasia. The Mzansi and Chinese markets were the only ones that were in tough operating environments but are starting to show sings of improvement as well.
The company does not see many opportunities for acquisitions as management thinks valuations are at unrealistic levels at this stage of the economic cycle. This meant that the company only pursued fewer bolt-on acquisitions in the financial quarter under review.
Bidfood UK concluded a R291 million deal to purchase Punjab Kitchen, a business that specialises in niche ready-made meals. The company was also in advanced negotiations to sell its UK Logistics business Bestfood, a unit that is still classified as "discontinued operations".
We will wait for the actual numbers to come out in order for us to better debunk what management is saying in this update. The shares of Bidcorp are up just over 11% year-to-date valuing the company at just shy of R99 billion.