Bidcorp Trading Update - Food Sales Returning to Normal

On Monday Bidcorp gave the market a trading update which had some interesting data. Remember Bidcorp is in food services, so they were heavily impacted by all the restaurant closures around the globe. The below graph compares their sales versus the same time last year. A low of 37% was reached on the 5th of April, ouch.



But there is a steady recovery after that, the group was operating at 67% on June 14th. Australia is leading the charge operating at 83%, the UK is lagging at 56%, Europe is at 62% while emerging markets are at 77% as at 14 June.

Interestingly their share price looks very similar.



Amazing how smart the market is. Here is their commentary on market conditions:

"Demand in the discretionary spend sectors, particularly across hotels, restaurants, pubs, leisure and travel related segments remains weak but are improving off a near zero base. Many customers are reopening and emerging from their 'hibernation' at a pace quicker than we had anticipated, however those businesses associated with 'large crowds', such as entertainment, sports clubs and travel, remain shuttered. Our businesses have diversified into new channels, such as home delivery and supply to other retail related channels, however the overall contribution of these initiatives is small and remains noncore."

Fortunately Bidcorp has always been well behaved when it comes to debt. They have raised an extra R17.4bn to support their businesses but remain well within their debt covenants. We are still holders of this business. If the share price continues to track sales, this stock should continue its recovery.