Leading services, trading and distribution Group, Bidvest, has delivered a strong performance converting the improved momentum reported at half year into accelerated full-year earnings growth. The quality of the result is evident from profitability to cash generation, with every division delivering trading profit growth.
Continuing operations headline earnings per share (HEPS) and Normalised HEPS, a measurement used by management to assess the underlying business performance, grew by 6.0% and 5.9%, respectively. HEPS increased to 1 864.2 cents and normalised HEPS to 1 997.7 cents. Group basic EPS increased 1.3%, from 1 785.5 cents to 1 808.4 cents. Group HEPS grew by 4.4% to 1 952.6 cents. The difference relates primarily to the impairment of the discontinued operations’ net asset value growth over the year.
Group CEO, Mpumi Madisa, said, “This year’s performance reflects the clear delivery against our FY2026 commitments. We improved organic growth momentum, materially increased cash generation, maintained capital discipline, and deleveraged, while the programme to rebuild returns, remains a priority”.
The Group declared a final dividend of 483 cents per share, 6.6% higher year on year. Cash generated from operations and free cash generated excelled with increases of 16.9% (+R2.5 billion to R17.2 billion) and 26.9% (+R2.6 billion to R12.5 billion), respectively. Improved profitability and tighter asset management resulted in an increase in Return on Funds Employed (ROFE) and the Return on Invested Capital (ROIC) remained ahead of the Group’s weighted cost of capital. Revenue growth of 2.9%, pleasing gross margin expansion, disciplined cost control, active portfolio and product mix management and productivity gains improved profitability by 8.4% to R13.1 billion. The trading profit margin expanded 50bps to 10.0%. On an organic basis, the Group delivered profit growth compared to a contraction in the prior year.
Progress was also made on Bidvest’s strategic initiatives. The terminal operator license for the renewed Island View 25-year port lease was signed, with two more under negotiation. To date, total capex of R2.5 billion was approved to expand these country-critical bulk terminals. Incremental value and contributions were realised in the hygiene and testing, inspection and compliance (TIC) sectors through the completed integration of Citron UK into PHS, the full year contribution of Citron North America and nine-month contribution from Aquatico.
Financial overview
Group revenue grew to R130.3 billion (FY2025: R126.6 billion). Gross profit rose 5.2% to R36.9 billion and the gross profit margin improved by 61 bps to 28.3% reflecting a positive business mix, operating leverage and disciplined margin management. Five divisions improved their gross margin. Madisa added, “Considering the structural shifts, rescoping of key contracts and the under-recovery of wages in security, this is a very pleasing outcome”. Expenses were exceptionally well managed, growing 3.8%, and up 2.9% on an organic basis. Operating expense growth in all divisions, except Freight and Services International, was below revenue growth. Freight’s cost increase was mainly driven by the greater bulk volumes handled, while the full year expenses of acquired businesses impacted costs in Services International. Commercial Products grew trading profit 27.2%, benefitting from a recovery in renewable sales, robust demand for basic plumbing and electrical products, strong smart meter sales as well as product portfolio expansion.
Freight delivered 10.3% growth in trading profit as healthy agricultural and mineral export volumes added further impetus to positive operating leverage. In Services South Africa, excellent results in hospitality and TIC services as well as demand for bottled water, mitigated security contract margin pressure, resulting in 8.3% profit growth. In Automotive, relentless vehicle gross margin pressure was buffered by a solid performance across the balance of the automotive portfolio, particularly in Insurance, and the receipt of an old insurance claim, resulted in a trading profit increase of 7.1%.
Bidvest’s Profit Margins Hold Firm Despite Market Challenges
Adcock and Branded Products converted flat toplines into trading profit growth of 9.4% and 5.4%, respectively, through positive product mix delivering improved gross margins, augmented by outstanding operational and cost efficiencies. Strong results from Services International’s global hygiene operations mitigated contract margin and rescoping pressures in facilities management, yielding 4.3% growth in trading profit. In constant currencies, the growth was in line with expectation. Overall, ROFE improved from 37.6% as at 31 December 2025 to 38.6% and ROIC stabilised at 13.4%.
Corporate action
Capital allocation remained disciplined, with no material M&A in the current year, as continued focus on extracting value from the investment base remains the priority.
The acquisition of Aquatico, effective 14 October 2025, expanded Bidvest’s TIC services platform into environmental monitoring and water testing, increasing the Group’s exposure to an attractive structural growth market. Cleanbio, a small bolt-on hygiene business in Singapore was also acquired in the first half of the financial year. The disposal of Bidvest Life remains subject to customary regulatory approvals.
The Bidvest Bank disposal process was relaunched after the initial transaction terminated due to Access Bank Plc not securing the required approvals prior to the long stop date. Negotiations are active and we remain confident in our ability to successfully execute this disposal.
Madisa commented, “Post year end, we monetised part of our majority stake in Adcock and used the proceeds to repay debt. Bidvest remains a majority shareholder of Adcock. Capitalising on opportunities such as this forms part of our capital recycling”.
Prospects
Bidvest enters FY2027 with positive operating momentum and a strengthened platform for sustainable growth. The Group’s near-term priorities remain unchanged: accelerate organic growth, enhance cash generation, reduce leverage and rebuild returns. Bidvest acknowledges the impact of competitive pricing and related margin pressure, energy price instability, and muted industrial demand in South Africa. The growth outlook will, however, be supported by structural demand in hygiene, TIC services, hospitality and inbound tourism.
Further impetus will come from the annualisation of Aquatico, broader automotive brand representation and used-vehicle reach as well as the recent product specific uptick in industrial activity. Additional opportunities are emerging from advancement in infrastructure, logistics and port reform in South Africa and AI deployment in business process optimization and innovative solution offerings continue to enhance our competitive edge. Currency volatility and sluggish economic activity in the UK, Ireland and Australia is expected to persist, however improved net contract wins momentum, focused customer retention, greater washroom product and services penetration, sourcing efficiencies, technology and AI deployment supports confidence in the outlook for the international operations.
Madisa commented, “The past year provided clear evidence of business momentum across all divisions, particularly in the largest businesses, and we expect this to continue”. Capital allocation will remain conservative. No material M&A is planned in the near term. Free cash flow, disposal proceeds and capital recycling will continue to be directed to reducing debt, while growth capital will be allocated to expanding country-critical port terminal capacity, mobilising new contracts and building scale in North America, with a disciplined focus on sustainable long-term returns. The Board has approved R2.5 billion growth capex in Freight. This capex relates to the construction of a second LPG terminal in the Port of Richards Bay and expanded bulk grain and liquid capacity in the Port of Durban. Construction will commence once close out conditions have been finalised.
Across the Group, Bidvest’s businesses are using innovation and technology to strengthen resilience, improve customer outcomes, optimise capital allocation, expand operational capacity, enhance sustainability and unlock future commercial opportunities. We also continue to build social value through broader skills development, wellness, health and sustainability initiatives, many delivered in conjunction with suppliers and customers. Our guiding principle remains unchanged: sustainable growth must create balanced value for employees, clients, suppliers, communities, economies and shareholders.
Madisa concluded, “We remain confident in Bidvest’s ability to build on the FY2026 performance. We have restored earnings momentum, demonstrated the cash-generative quality of our portfolio and taken decisive action to sharpen capital allocation. Our focus remains firmly on execution and on delivering sustainable long-term value for all stakeholders”.