Bidcorp Trading Update - Moving on From Covid

Local Vestact portfolio holding, Bidcorp, released a positive trading update yesterday, sending the share price up 3.4%. This food-services company has had a tough few years. They were blitzed by hard lockdowns during the pandemic, because their clients went out of business, and hundreds of millions of Rands of stock went off in their warehouses. Last year they also discovered a serious accounting fraud at one of their Chinese subsidiaries which cost hundreds of millions more.

In this update, Bidcorp reported that all regions, except Greater China, saw growth compared to 2019 levels. They also improved profit margins thanks to improved efficiencies in the group. Management note that they continue to see strong consumer demand and that they expect good sales this festive season. Despite the negativity around, consumers are still spending.

Bidcorp is one of the best-run companies on the JSE. Thanks to the company's conservative balance sheet, they had the resources available to pay suppliers early to ensure sufficient stock at a time when supply chains have had issues. In the last quarter, they also spent R292 million on bolt-on acquisitions in a few of their operating territories.

Selling food might not be as glamorous as selling high-end jewellery like Richemont, but it is a solid business that pays a nice dividend. We are happy holders of this one now that Covid is behind us.