CEO Bernard Berson says annual results show demand in spend sectors improved in June.
Bidcorp has decided not to declare a final dividend for the year as it saw its revenue from continuing operations decline by 6.3 percent to R121.1 billion in its annual results for the year ended 30 June 2020. The international food service business’s trading profit also fell by 37.6 percent to R4.2 billion, while basic earnings per share from continuing operations decreased by 68.1 percent to 463.5 cents.
Bidcorp CEO Bernard Berson said in a statement that the company’s current focus was to anticipate the likely “new normal” that will exist post the short-term effects of the Covid-19 crisis and to scale its activities accordingly.
“Overall activity levels have returned to 85 to 90?percent of pre-Covid-19 levels, with several? businesses now achieving growth higher than the comparative period a year ago. There are, however, a few markets which are still lagging, those being the UK and some in emerging markets,” Bernard said.
The group saw the full impact of Covid-19 becoming evident from late March. It said that sales for the last quarter of the financial year declined by 27.6 percent.
Bernard explained that the performance across their business up until February remained pleasing and in line with expectations. However, with the onset of Covid-19, demand in the discretionary spend sectors, particularly across hotels, restaurants, pubs, leisure and travel-related segments, initially plummeted as lockdowns and restrictions were implemented. Towards the beginning of June, the demand started improving again.
Looking ahead, the group said its businesses were preparing to ride out the next phase of the economic recovery, mindful that activity levels will fluctuate as further waves of Covid-19 arose. “We believe there will not be any major long-term fundamental shift in consumer behaviour away from eating-out-of-home and early anecdotal evidence supports this,” Bernard said.
He believes that consumers will continue dining out after a period of lockdown and this should support the group’s sales in the new financial year. “Maybe they’ll like the normality of staying at home for a while but in our opinion and backed by our sales numbers, that has worn out very quickly.”