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South African
industrial conglomerate Bidvest posted higher full-year profit on
Monday as solid demand from emerging markets offset a stronger rand,
and said it was looking for potential acquisitions.

Bidvest, whose
businesses include auto retailing, shipping and food distribution, has
been helped by exposure to fast-growing markets such as Asia, which
have largely escaped the worst of the global downturn.

It also expects a
boost from decades-low interest rates at home, and as economies in
Europe and South Africa make a gradual recovery.

Bidvest, which has
a market value of around $6.2 billion, said in a statement it is
budgeting for “real growth” in earnings in the coming year.

“Our capacity to do deals is quite significant,” Chief Executive Officer Brian Joffe said in a telephone interview.

“We obviously have to put our balance sheet to work over the next short while.”

He declined to say
how much Bidvest would be looking to spend on a potential acquisition.
The company has said it is looking to expand its food service business
in Europe.

The company’s
current leverage ratio stands at around 30 percent, Joffe said, adding
that could “easily” be boosted to 40 or 50 percent.

Overseas profits

Bidvest, which
makes more of a quarter of its sales overseas, said full-year results
were boosted largely by stronger auto sales in South Africa and rising
demand for catering services in Asia.

“It’s a good
quality set of results and shows that something is happening in the
economies it operates in,” said Mark Hodgson, an analyst at Avior
Research.

But the company was also hit by the strengthening rand, which eats into the value of overseas earnings.

Earlier this month
the rand hit a 2-1/2 year high against the dollar, prompting South
Africa’s finance minister to say he was concerned about the rise of the
currency.

Bidvest’s Joffe
said the soccer World Cup, which was expected to lift earnings at home,
failed to deliver due to fewer than expected foreign visitors.

Headline earnings per share rose 15 percent to 1,070 cents in the year to end-June.

Headline EPS, the main gauge of profit in South Africa, strips out certain one-time items.

Revenue fell 2.3 percent to 109.8 billion rand, hit in part by the stronger rand.

Bidvest’s cash
generation increased 18.3 percent to 8 billion rand, debt fell 7.3
percent to 3.8 billion rand, while finance charges dropped by around a
quarter.

Shares of the
Johannesburg-based company, which are little changed so far this year,
gained 1.2 percent to 130.50 rand as of 1110 GMT, slightly
underperforming a 1.6 percent rise in the blue-chip Top-40 index.