Bidcorp share price boosted by strong earnings and dividend increase

Bidcorp FY23 results

Bidcorp (BID) has achieved a breakthrough performance for the fiscal year ending in June 2023. In a favorable business environment, the company's management team leveraged the rebounding demand in the broader foodservice market and higher inflation, leading to impressive financial results.

The company reported revenues of R196.3 billion, a significant increase of 33.4% from R147.1 billion in the previous fiscal year. The trading profit also saw a substantial rise of 38.4%, from R7.6 billion in 2022 to R10.5 billion in 2023.

Moreover, Bidcorp has shown an exceptional ability to generate cash from operations. The cash generated by operations in the fiscal year was R13.2 billion, marking a 66.0% increase from R8.0 billion in 2022. This strong cash generation equates to 125.7% of trading profit and 112.1% of EBITDA converted into cash.

In terms of earnings, the headline earnings per share surged by 35.4% to 2,082.9 cents, up from 1,538.3 cents in 2022. Similarly, earnings per share jumped by 42.8% to 2,061.8 cents, up from 1,444.3 cents in the previous year. The shareholders' net asset value also grew by 21.1% to R39.8 billion, up from R30.8 billion in 2022.

Reflecting the company's strong financial performance, the directors declared a final gross cash dividend of 500.0 cents per ordinary share for the year ended June 30, 2023. This is a significant increase of 34.3% from 700.0 cents in 2022, and it is payable to members registered on the record date, being Friday, September 29, 2023.

The financial results strongly underline the company's growth trajectory and its ability to generate shareholder value in a challenging market environment. They highlight Bidcorp's strategic approach to seizing trading opportunities and its adept financial management.

Bidcorp's record-breaking performance for the fiscal year ending in June 2023 demonstrates its resilience and strategic prowess in the broader foodservice market. This underscores the company's commitment to delivering value to its shareholders and sets a positive precedent for the future.

Bidcorp – technical trading view

The long-term trend for Bidcorp remains up as we see the price trading firmly above the 200-day simple moving average.

In the short to medium term the share price has been trading in a sideways range. Today’s results have seen a sharp reversal off the support of this range (40205), with the 43350-resistance target now in near proximity.

Keeping in line with the longer-term uptrend, traders not already long might consider looking for entry on a pullback towards 41750 or a break of resistance at 43350, with overhead resistance at 45600 a longer-term upside target. Only on a break of support at 40250 would long positions on the stock be reevaluated.