* Listing would boost unit's funds for growth, says CEO
* Group profit up 11 pct
* Headline EPS at 1,723 cents, against forecast of 1,751
(Recasts, adds CEO comment, background)
By Tiisetso Motsoeneng
JOHANNESBURG, Sept 1 South African conglomerate
Bidvest is considering a London stock market listing
for its food business to help to fund future growth, the company
said after announcing an 11 percent rise in annual profit.
Bidvest's diverse operations from auto showrooms to shipping
and office furniture make it South Africa's second-biggest
company by sales, but it has long acknowledged the need to
separate its food business from the rest of the group because
its true value was not fully reflected in its share price.
"Markets are particularly buoyant, money is cheap and
there's quite a lot of demand for this particular asset,"
Bidvest Chief Executive Brian Joffe told reporters in a
Bidvest, which in 2011 rejected buyout bids for the business
on the grounds that they would not have benefited shareholders,
said on Monday that a separate listing would unlock value
because it is becoming increasingly difficult to fund growth
with a South African balance sheet.
Joffe, a renowned dealmaker in South Africa, also said the
division is looking at entering the United States through
acquisitions but that such deals would put strain on the group's
cashflow unless the business can fund itself.
"The kind of money involved to pursue an acquisition in the
United States is quite significant and therefore one has to
consider 'how do you continue to fund the business going
forward?'," he said.
The food service business, Bidvest's biggest division and
one that contributes more than half the company's 183.6 billion
rand ($17.20 billion) in sales, supplies pubs, restaurants and
hotels in Europe, South America and Asia.
Shares in Bidvest rose 2.4 percent on Monday morning,
outpacing a flat JSE Top-40 index.
The group said its profit rise in the year to June 30 was
partly attributable to favourable currency swings and
acquisitions at home, where underlying demand was sluggish.
Diluted headline earnings per share (EPS), which strips out
certain one-off items and is the most widely watched profit
measure in South Africa totalled 1,723 cents. That was a touch
below a 1,751 cent estimate in a Reuters poll of nine analysts.
Bidvest is largely insulated from weak demand at home thanks
to its extensive operations in Europe and Asia, where it makes
about half of its sales.
Group sales increased 19.7 percent to 183.6 billion rand,
with the rand's weakness serving to boost returns from sales
made in foreign currencies.
Bidvest also said it has not made a decision on whether to
take control of struggling local drugmaker Adcock Ingram
. Citing a document from the Competition Tribunal,
Reuters reported last month that Bidvest intended to increase
its stake in Adcock to more than 50 percent.
"Given uncertainty around current trading performance,
Bidvest continues to evaluate its position and has not
determined whether to take steps to achieve control," Joffe
Adcock, in which Bidvest owns about a third, reported a
hefty nine-month loss last week after writing down everything
from drug inventory, factories and trademarks to businesses in
Ghana and India.
(1 US dollar = 10.6500 South African rand)
(Editing by Ed Stoddard and David Goodman)