Strong cash generation provides big boost to Bidvest’s share price

DURBAN – The Bidvest Group surged on the JSE on Monday on strong cash generation despite its profits taking a hit of nearly 20 percent during the year to the end of June.

The services, trading and distribution company said its cash reserves rose 8 percent against a 19.9 percent decline in profits as a result of Covid-19. Bidvest said the pandemic cost its operations R1.6 billion.

The group said cash generated by operations increased to R9.2bn from R6.6bn, while profits eased to R5.34bn from R6.67bn the prior year. It said profits rose 3 percent to R6.9bn, excluding Covid-19, two-thirds of which came from the services unit.

The group said the disposal of its car rental and services division as part of a strategic review of all its businesses necessitated by the Covid-19 outbreak had progressed since year-end.

“Our preference is to sell the businesses in order to preserve as many jobs as possible. Bidvest Car Rental was disclosed as a discontinued operation,” the group said.