External operating environment

Economic growth

Although economic growth in South Africa remains constrained and business confidence depressed, we have a track record of outperforming through these cycles and we are confident into the medium-term. South Africa needs real GDP growth in order to create social and economic prosperity for all and this requires both public and private sector intervention.

Government policy and regulation

We are committed to working with government and the private sector to effect meaningful change and re-energise a growth programme. Our objective is for sustainable value creation for all stakeholders. The alignment of the amended B-BBEE Code of Good Practice, the Preferential Procurement Policy Framework Act, and the Mining Charter would go a long way to achieve success.

Infrastructure development and maintenance

Gross Fixed Capital Formation investment and maintenance have been limited, leaving the broad sector in dire straits. Government’s ability to credibly address the precarious financial position of several SOEs, initiation of development programmes and ongoing maintenance in key entities and facilities remains critical to kick-start the South African economy. The private sector also needs to invest to establish and grow businesses and industries. Bidvest, as a committed corporate citizen and investor in South Africa, is eager and well-positioned to augment initiated projects.

Increase in outsourcing and bundled spend

The market dynamics that influence customers to outsource and consolidate spend remains strong as efficiencies and value are being sought. Bidvest offers a variety of comprehensive and innovative solutions in Services, Office and Print, Electrical, and Financial Services. To enhance this even further, alliances and synergies between the South African and United Kingdom facilities management business are also being pursued.

Out-of-home services

Increasing out-of-home hygiene standards, growing hygiene awareness, urbanisation, a growing middle class and significant investment into the food, pharmaceutical and retail sectors are factors that drive demand for several services provided by Bidvest. This is also the focus for our offshore expansion programme.

Technology

Brings opportunity to enhance efficiency, improve service and reduce environmental impact. It also drives changed behaviours and needs, to which we respond accordingly. During the year, we acquired niche technology businesses in Services to disrupt ourselves and the industries in which we operate. Our internally developed artificially intelligent IT internal audit robot, ALICE, drives considerable value in our combined assurance model.

Consumer spend

Depressed consumer confidence and limited growth in disposable income result in constrained discretionary consumer spend. Well-priced and supported everyday essential products have gained market share.