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What is Bidvest's desired gearing ratio? |
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Bidvest would feel comfortable with
a debt-to-equity ratio of up to 40%, which will have the effect of
reducing Bidvest's weighted cost of capital and improving shareholder returns.
Bidvest consciously increased its gearing during the year, though borrowings
were well within the targeted range. At year-end, the gearing ratio was about
35% (2005: 20%).
Bidvest would be comfortable with an interest cover ratio of 5-6 times if
required. At the year end the interest cover ratio was 10.7. |
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Strategy |
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What is Bidvest's acquisition strategy? |
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Bidvest has a focused approach to acquisitions, targeting
businessess, which not only extend and enhance our range of products and
services, but also offer the ability to generate an above average return
on investment and an opportunity to add value to the Group.
Acquisitions must fit within the overall definition of a services,
distribution and trading business.
Acquisitions beyond our borders will by necessity have a slower and more
selective decision making process. We aim to pursue smaller, "foothold"
acquisitions in regions and markets where we are not yet represented, whilst
also evaluating large acquisitions, particularly in the services and
foodservice distribution spheres.
Bidvest will also seek minority investments in selected markets where we may
have management control or influence.
However, opportunities do not always arise when one would like them to and to
and patience and timing in their execution are critical. |
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What is Bidvest's internationalisation strategy? |
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We will continue our strategy of using the capacity of our
South African growth engine to develop local operations and drive internatonal
expansion. The Group seeks to match offshore acquisitions with offshore
borrowings and will endeavour to use its offshore base to fund further
acquisitions abroad. |
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What percentage of revenue and income is targeted to
come from offshore investments? |
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Bidvest does not set overall targets and does not acquire
businesses to maintain any balance between local and offshore businesses. Each
business within the Group is run independently on its own merits with its own
expected returns. |
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General |
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What is Bidvest's free float? |
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Bidvest has no one controlling shareholder and is owned
largely by institutional investors on behalf of the retirement and life
industries. Bidvest's two largest shareholders are Dinatla Investment Holdings
(Pty) Limited, our BEE partner, and the Public Investment Corporation Limited
(SA).
Bidvest has the JSE South Africa's highest liquidity rating and its free
float is considered to be 100% for the Morgan Stanley Capital International
Emerging Market Index, in which it is included. |
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Does Bidvest have a share buy-back scheme? |
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Bidvest has approval from shareholders to buy back up to
20% of the issued share capital. |
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What is Bidvest's dividend policy? |
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Bidvest is aiming to achieve dividend cover of 2,0 times.
Dividend cover for the year ended June 30 2006 was 2,2 times
(2005:2,1times). |
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What are the benefits of being a diverse,
multi-faceted Group? |
| A: |
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Business diversification not only balances risk, it also
helps us build critical mass. Diversification in our context is both
geographical (southern Africa , UK , continental Europe , Australasia ) and
different businesses. Research published in the Harvard Business Review has
indicated that a diversified structure is more suited to the challenges of a
developing market, as opposed to, a developed market.
This positive perspective was reinforced by research by Marakon Associates
(Kaye and Yuwono, 2003) into superior conglomerate performance worldwide. This
study rated Bidvest top among 88 diversified companies with market values of
more than $500 million. Researchers found Bidvest had delivered 36% annual
compound growth in total shareholder returns in US dollars over 10 years.
Innovation also combats risk. Bidvest has demonstrated locally and
internationally that new ways of looking at a business can create competitive
advantage and lead to sustained growth.
Our slogan "From diversity comes strength" epitomises our belief in a diverse,
multi-faceted Group. |
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Who would you consider to be Bidvest's peers? |
| A: |
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In South Africa obvious peers would be: Barloworld Limited
and Imperial Holdings Limited. |
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What have been the organisational and structural
changes amongst the businesses? |
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The businesses of Bid Office were reallocated between
Bidserv and Bid Industrial and Commercial Products and Bid Paper Plus.
The following are the changes made:
- Office automation, the e-procurement platform of mymarket.com and the travel
and banking and foreign exchange businesses now form part of Bidserv.
- Stationery and office products now fall within an expanded structure at Bid
Industrial and Commercial Products.
- Bid Paper Plus has been created to house Bid Office's former printing, label
manufacture, paper conversion and wholesale stationery businesses.
Bidvest's businesses are now structured as follows:
Bid Corporate Services; Bidfreight; Bidserv; Bidvest Europe; Bidvest
Australasia; Bidfood; Bid Industrial and Commercial Products; Bid Paperplus and
Bid Auto. |
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Corporate governance |
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How is your board of directors structured and what is
the role of the Board? |
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The Board of Bidvest consists of seven non-executive
independent directors, five non-executive directors and twelve executive
directors. MC Ramaphosa is the non-executive chairman and Brian Joffe is the
chief executive.
The executive directors are responsible for implementing strategies and
operational decisions within the Group's divisions; the non-executive directors
are viewed as independent by the Board and support the skills and experience of
the executive directors.
The Board gives strategic direction to the Group, appoints the chief executive
and the non-executive chairman and ensures that succession is planned. The
non-executive directors ensure that the chair encourages proper deliberation of
all matters requiring the Board's attention.
The Board has established a number of sub-committees of the Board, which are
responsible to the Board. These are an Executive committee, Remuneration
committee, Audit committee, Risk committee, Acquisition committee, Nomination
committee and Transformation committee. |
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What succession plans are in place? |
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Succession plans are in place within the Group to cover
both long term natural succession and short term focused succession, which may
result as a result of unexpected occurrences.
At a Group level, the board of directors appoints the chief executive and
ensures that succession is adequately planned.
Peter Nyman, the financial director, has announcand his retirement,
and David Cleasby has been appointed financial director designate. |
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BEE |
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What is Bidvest's empowerment strategy? |
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Business units subscribe to the Bidvest charter and BEE
scorecard, which guide the Group's transformation strategy. Most South African
divisions have appointed a commercial director to assist businesses in meeting
targets and fostering business synergies within Bidvest and with outside
partners including Dinatla. The Group's "A" empowerment rating was reaffirmed
showing improvements all round. Progress in most areas is in line with the
transformation scorecard.
Following the finalisation and the release of the BBBEE codes of good practice,
the Group is undertaking an exercise to compare our existing charter to the new
requirements. The Group is focusing on transformation in its operations on
an ongoing basis. |
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Bidvest's BEE transaction |
| A: |
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In terms of the scheme of arrangement approved by Bidvest shareholders Dinatla
owed BidBee shareholders R2.7 billion for its 15% shareholding in Bidvest in
order to settle its obligation to BidBee shareholders on the due date of
December 9 2006.
Dinatla sold 18 million shares to Bidvest with Investec financing the balance
owed of R1.3 billion through the issue of cumulative, redeemable
non-participation preference shares. Dinatla remains a 9% shareholder in
Bidvest and continues to support Bidvest in the advancement of BEE. |
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What is the black economic empowerment stake in
Bidvest? |
| A: |
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Bidvest received an A Empowement rating in October
2006. Empowerdex reports that 41.4% of voting rights are held by
black people, of which 21,8% are held by black women and 14.3% of black
designated groups hold an economic interest in Bidvest. |
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What effect does HIV / AIDS have on Bidvest? |
| A: |
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The HIV/Aids epidemic is a significant challenge affecting most companies in
southern Africa, including Bidvest. A Group HIV/Aids policy, which serves
to guide businesses in developing appropriate programmes, has been finalised
and is awaiting formal adoption by the Board. An HIV acturial prevalence
study and an assessment of the HIV/Aids programmes has been conducted by an
outside specialist as an initial step quantifying the impact of HIV/Aids on the
Group and will guide our ongoing strategy and response.
Bidvest has become a member of the South African Business Coalition on
HIV/Aids, which gives the Group access to a best practice knowledge base and
will help the Group to more effectively address HIV/Aids. |
