SA is not Bidcorp’s China. Trying economic conditions and weak consumer sentiment are weighing on the

group's SA operations, but the UK, Europe and Australasia are performing

better.

South Africa and China have marred an otherwise positive start to Bidcorp's

2019 financial year. However, the multinational food services group says

disappointing showings from the two countries have been countered by better

performances from its UK, European and Australasian operations, supported by

economic growth and relatively benign food inflation.

In a trading update yesterday, Bidcorp said trading for the first quarter of

its 2019 financial year continued to be positive, with organic sales

continuing to grow. Currency volatility had impacted its performance though,

with constant currency results about 3.1% lower than the rand translated

results for the three months.

In Australia, its core foodservice business was doing well, and its fresh and

meat businesses were slowly improving. While New Zealand was continuing its

solid performance, top-line gains and margin improvements were being offset by

higher costs, particularly labour and the costs of recent increased capacity.

In the UK, good summer weather assisted activity levels despite increasing

stress in the casual dining space and lower consumer confidence, partly due to

the Brexit uncertainty.

The performances of the Netherlands, Belgium, Czech & Slovakia, Poland and

Italy stood out in Europe, although cost increases, particularly labour and

fuel, were having an impact in many economies experiencing full employment.

The group's operations in South Africa overall underperformed in what it said

were extremely trying economic conditions, characterised by stagnant GDP

growth and ongoing weak consumer sentiment. Greater China's financial

performance was also disappointing, but the business had reacted well in

recovering from the effects of dairy market supply dislocation and accordant

margin pressures and rising operating and logistics costs.

The group said it was still looking for a buyer for its discontinued Contract

Distribution business in the UK after a previous deal fell through. Although

the unit had reported an improved trading performance it remained loss-making.

Fundamental conditions within our global foodservice markets continue to

support organic growth and bolt-on opportunities remain in all our

geographical segments," Bidcorp said.

The group closed 2.1% down at 270.90 rand.

> Bidcorp trading update - Full of promises and inuendos. No numbers. No

saying how investors will react to this. I would say negative

>

> -- Bruno van Eck (@brunovaneck) November 28, 2018