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It's very gratifying to see a stock that we hold make new all-time highs after going through a very tough patch. We held onto the shares, and did not sell, even though we may have been tempted to do so.
This time I'm referring to Bidcorp, the JSE-listed food services group, which is in our recommended Rand-based portfolios. It was spun out of Bidvest in 2016. We liked its business model, its global aspirations and its management team. They now operate in 36 countries around the world.
After a great start as a separate company, including a number of bolt-on acquisitions in Europe, Asia and Latin America, they really suffered during the Covid period, because many of their best clients are restaurants and hotels. On top of that, they wrote off R500 million after uncovering fraudulent practices in their Hong Kong operation in September 2021.
The Bidcorp share price was over R350 a share in late 2019, but plummeted to below R200 a share in 2020.
They reported really solid interim earnings on Wednesday, with profit for the six months to end-December soaring by 48% year on year to R3.3 billion. The share price just hit a new all-time high, around R400 a share.
CEO Bernard Berson (pictured below) said "Revenue across all divisions was significantly higher than the first half of the 2022 financial year, reflecting the benefits of high inflation but also representing real double-digit growth in activity".
We'll keep holding this one.
