Bidvest
The Bidvest Group Limited
Annual report 2008
 
 
Review of operations  
 
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Bidvest brand

The work of Bidvest brand-building is proceeding well and our first series of corporate Pilobolus TV advertisements has been well received. The ads have been screened in South Africa only. The goal was to produce world-class advertising for a business that measures itself against the world’s best. It was therefore satisfying to hear favourable comments from the public as well as the advertising industry on our creative standards and production values.

In line with Bidvest culture, we create hard-working advertising. The theme – the ability of Bidvest and its people to turn ordinary businesses into extraordinary achievers – enabled us to celebrate the brand while honouring our people who are responsible for turning the everyday into the extraordinary. The adverts have an internal motivational role while simultaneously educating the general public on the diversity of Bidvest’s business activities.

Proudly Bidvest

Key elements of Group brand-building strategy, notably the Proudly Bidvest slogan, provide unifying themes for operational divisions when they address their own image requirements.

We constantly seek new ways to put the “Proudly Bidvest” positioning to work. The theme has become fundamental to our corporate culture, expressed as pride in our work, pride in our values, our quality, BEE achievements and job creation milestones.

Our people always felt a compulsion to excel. Now we have put a name to it – Bidvest pride. It drives everything we do.

Sponsorship

Continued sponsorship of a major football team – Bidvest Wits – has ensured that the company is now known to the broad mass of the South African population. It is widely recognised as the fourth most popular soccer team in South Africa. Three years ago, awareness of our brand was restricted to a corporate and investment “laager” of business people. Much wider noting has now been achieved. The next objective is to deepen public understanding of Bidvest values and our role as a job and wealth creator.

Staff communication

The editorial and design quality of Bidvoice, the staff news magazine, has been improved. Other communication formats (intranet, internet and e-mail) benefit from uniform corporate branding, consistency of presentation and the wealth of information that is provided.



A key challenge is staying close to Bidvest people as staff numbers climb above the 100 000-mark across many geographies. One response has been the use of televised messages. This enables us to put strategic issues into simple terms in support of the key proposition that we can all make a difference. The messages have been broadcast to operations across South Africa and video-streamed worldwide. Downloadable versions are available off the Bidvest intranet.

BID PROPERTY HOLDINGS

Predictions of a market slowdown proved all too accurate, driven by rising interest rates and higher building costs. Steel fabrication prices rose by more than 60%. Developmental challenges were compounded by skill shortages in the construction sector and capacity constraints at local authority level. This led to slow approvals, adding to cost pressures.

The intrinsic value of the property portfolio continued to grow and the opportunity was taken to improve the quality profile by the disposal of some older buildings. Bidvest operations housed in Group-owned premises continue to enjoy long-term security of tenure and rentals at highly competitive or advantageous rates. Our sites and custom-designed premises permit ongoing expansion by our growth-minded businesses.

Developments for McCarthy – a showroom/workshop for Mercedes in Menlyn and a Midrand facility for the Lexus brand – were completed on schedule. In February, work began on new Cape Town premises for Lithotech, Silveray, Blue Marine and First Foods. Completion is expected in December. This joint-venture development represents an investment of R100 million.

A selective approach will be taken to future development as adverse market conditions are expected to continue and may worsen. The higher cost of long-term money, high building sector inflation and approval bottlenecks may have one positive effect for those able to take a long-term view of developmental needs – the value of vacant land close to industrial and commercial nodes may soften, creating selective buying opportunities.

Bid Property continues to operate on a sound financial footing. Our profitability is not subject to undue interest rate risk as a large percentage of borrowings is via fixed, long-term loans and all rentals have built-in escalations.

Strategies to save costs and improve energy efficiency receive growing attention. Energyefficient compact and fluorescent lamps are often specified while energy-saving movement sensor technology is being introduced in new and refitted buildings. Insulation and air conditioning are under close scrutiny. Improvements in the energy efficiency of older buildings are achieved during renovation when economically feasible.

In 2009, falling economic growth and the slump in business confidence seem certain to affect demand for commercial and industrial space, putting a brake on rentals. This suggests that the rental of space may become a viable alternative to expensive new developments. This option will be considered on a case-by-case basis as Bid Property responds to the needs of operational units.

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