By Nqobile Dludla
JOHANNESBURG (Reuters) -Multinational food services company Bid Corporation (Bidcorp) sees consumer spending still under pressure in the 33 countries it serves as the cost of living crisis persists, it said on Wednesday after reporting a 6% rise in half-year earnings.
The South African-headquartered company, which operates in Europe, Australasia, Africa and other emerging markets including China, Brazil and the Middle East, said its headline earnings per share rose to 12.21 rand ($0.6627) in the six months to December 31.
In constant currency, those earnings grew by 10%.
Bidcorp supplies wholesale food products to the hospitality industry, including restaurants and hotels. It competes with the likes of JMP Foodservice and Creed Foodservice in the United Kingdom.
Group revenue grew by 3.6% to 117.9 billion rand, with growth of 7.1% in constant currency, reflecting both organic and acquisitive growth, despite stable food prices and weak consumer demand, the company said.
Trading profit increased 6.8% to 6.3 billion rand.
Following the rapid post-COVID economic recovery, interest rates in almost all of Bidcorp’s developed markets rose sharply, eating into disposable incomes and dampening demand for such activities as eating out or going on cruises.
Chief Executive Bernard Berson told Reuters that consumers were increasingly price conscious, putting pressure on margins and forcing the group’s businesses to sacrifice some margin to maintain volumes and grow market share.
“It’s certainly not a buoyant market out there,” he said.
Despite revenue growth, especially in its biggest unit Europe, as well as United Kingdom, and emerging markets, the company predicted consumer conditions would remain subdued.
A lacklustre economic recovery in China has led the company to cut costs by reducing its product range, getting rid of an adjacent business there and closing down infrastructure in second-tier cities due to insufficient scale, Berson said.
“Any attempt by the government to kickstart the economy hasn’t really worked,” he said.
In the UK, where it made a trading profit of 1.2 billion rand, Berson told investors that the company is estimating a 7 million to 8 million pound ($10 million) cost impact on an annual basis from April 2025 due to the increase in National Insurance Contributions
($1 = 0.7905 pounds)
(Reporting by Nqobile Dludla; Editing by Rashmi Aich and Tomasz Janowski)
