Bidvest Namibia is still facing stringent economic challenges especially in its trading divisions. The group released its financial results for 2017-2018 this morning during annual investors presentation.
During the fiscal year Bidvest sold its entire shareholding in Bidvest Namibia Fisheries (“Bidfish”) to Tunacor Fisheries Limited with effect from 30 June 2018, enabling it to act on its strategic decision to exit the fishing industry. The Fishing division has experienced a number of challenges in growing its revenue, profit and cash flow. The fish size mix remained under pressure and competition from foreign operators was rife, while market prices remained depressed. This in turn impacted negatively on profit margins. Similarly new taxes and levies, and an export levy added to the cost of doing business harshly affected earnings. The division also had to deal with additional costs following the required application of income tax to foreign crew. One Horse Mackerel vessel was sold during the year under review.
The disposal of Bidfish to Tunacor excludes the Angolan and Mozambican businesses, and certain vessels, plant and equipment. Bidvest is actively seeking sell-off these assets. Glenryck is now reported as part of Food & Distribution division. Namsov Industrial Properties (Proprietary) Limited and United Fishing Enterprises (Proprietary) Limited were acquired by Bidvest for a net cash outflow of N$74,9 million.
With the continued economic recession the other Bidvest Namibia divisions all experienced pressure on revenue. The Automotive division faced an extremely tough year as reflected in the 14% decline in industry sales. The used-vehicle market did not make up for the overall negative performance. Efforts continue to reduce the dependence on the new-vehicle segment in this division. Although Freight & Logistics revenues were flat year on year, they improved trading profit in the current year through cost savings. There are prospects of certain Oil and Gas projects on the immediate horizon. Food & Distribution revenue, excluding Glenryck, did not grow in line with expectations and generated losses for the year. The year saw a management and structural shakeup in this division with cost savings and overall business rationalisation projects underway.
The economic climate affected all entities in the Commercial & Industrial Services and Products division negatively, except for Cecil Nurse, Kolok, Minolco, Steiner and Waltons. Voltex continued to generate losses despite actions taken to turn the business around. The effective tax rate is high due to losses incurred in certain statutory entities, for which no deferred tax assets were raised. Current assets include amounts of N$188 million relating to dividends receivable from Bidfish, this was received in full post-year-end, and of the N$190,7 million due by Tunacor Fisheries Limited relating to the disposal of Bidfish, N$175,4 million was paid in July 2018 with the balance due within five business days after delivery of the effective date of the financial statements. Non-current assets have reduced by 40,9% mainly due to the disposal of Bidfish. The Angolan and Mozambican businesses are disclosed as assets held for sale at year-end. Bidvest is in a net cash position at year-end.
Presently there is no indication that the Group’s market segments and economic climate will improve in the short term. Going forward, after the conclusion of the disposal of the Fishing division, the operational challenges in all divisions are receiving significant focus with loss-making operations under the spotlight. Overall, the Group remains open to acquisitive growth, but the emphasis will be to optimise current operational structures and processes. The Group remains optimistic that profitability will regain momentum in the near future despite the recessionary economic climate.
A final cash dividend of 10 cents per share has been declared.
The shareholders of Bidvest Namibia are informed that on 10 April 2019, Bidvest Namibia received a Binding Conditional Offer (“”Offer”) from Bidvest Group, the majority shareholder of Bidvest Namibia, to acquire all of the shares held by the minority shareholders in Bidvest Namibia (“Bidvest Namibia Shareholders”) at 10.50 per share, which Offer will be subject to inter alia the successful passing of the De-listing Resolution as set out in the conditions, together with the take-over statement and Offer amounts to a takeover scheme.
Shareholders of Bidvest Namibia are informed that Bidvest Namibia has received a intended binding offer from Bidvest Group, the majority shareholder of Bidvest Namibia, in terms of which Bidvest Group intends to make an offer to acquire all of the outstanding ordinary shares in Bidvest Namibia not currently held by Bidvest Group, by way of a take-over scheme. The amount offered in terms of the Intended Conditional Offer is a cash only consideration of N$10.50 per Offer Share, subject to the successful passing of the De-listing Resolution as set out in paragraph 2 below.
Investors are referred to the NENS announcement released on August 31, 2018 relating to the finalization announcement of the sale by Bidvest Namibia of the entire issued capital of Bidvest Fisheries Holdings to Tuncar Fisheries. The results of Bidfish have been presented as discontinued.
Further to the cautionary announcement dated December 12, 2018, shareholders are advised that the Company has entered into discussions, which if successfully concluded, may have a
material effect on the price of the Company´s securities. Accordingly, shareholders are advised to continue to exercise caution when dealing in Bidvest Namibia´s securities until a final announcement is made.