Bidcorp shares soar to highest in two years as it flags record earnings

Shares in Bidcorp booked their biggest one-day gain in more than two years after the international supplier of food to restaurants and hotels said interim earnings would rise by almost a half, bolstered by surging trading momentum in the countries in which it operates.

Shares in Bidcorp rose by as much as 11% — the biggest gain since November 2020 — before settling 6.57% higher at R382.04 at the close of trade on Wednesday.

The market was reacting to a trading update informing shareholders that headline earnings per share (Heps) for the six months to end-December are expected to be between 960c and 980c a share, a rise of 43%49% from the corresponding period a year earlier.

Headline earnings strip out one-off items, providing a more accurate basis for assessing a company’s financial performance.

The forecast numbers would surpass the 714c all-time high Heps that the group achieved in the pre-Covid half-year to end December 2019.

Bidcorp said the trading momentum it had previously outlined before the festive season had continued into November and December across almost every region in which the group operates.

“Sales into the early part of January 2023 remain buoyant considering the normal effect of the northern hemisphere winter on seasonality,” Bidcorp said.

The company, valued at about R129bn on the JSE, caters to the hospitality, tourism and leisure industries, which were affected disproportionately by pandemic-induced lockdowns and curbs over the past two years.

However, it has seen a dramatic comeback in those industries as discretionary spending appears to have normalised and in some cases improved, allowing the group to continue to gain market share.

The growth came despite headwinds including inflation, labour and product shortages, and supply-chain disruptions, Bidcorp said.

Bidcorp, which was spun off from Bidvest and separately listed on the JSE in 2016, is scheduled to publish its financial statements for the period on or about February 22.

TRADING MOMENTUM ... OUTLINED BEFORE THE FESTIVE SEASON HAD CONTINUED INTO NOVEMBER AND DECEMBER