BIDVEST NAMIBIA

The business comprises two divisions, Bidvest Fisheries Holdings and Bidvest Commercial Holdings. The fishing business has been run as a self-standing concern for many years and put in a strong performance. Businesses within the commercial operation were previously the Namibian assets of various South African divisions of Bidvest. In July, 2007 they were consolidated into Bidvest Namibia ahead of a listing on the Namibian stock exchange.

Bidfish

In the first half, adverse environmental conditions impacted catch rates. Performance was also affected by seizure of four of the five vessels in Namsov’s fleet. The Ministry of Fisheries and Marine Resources cited “transgressions” but gave no details. No charges were laid. In December, the vessels were released against prescribed guarantees.

Fish prices firmed as lower catch rates were recorded in Namibian waters and in the fishing zones off Mauritania and in the South Pacific (principal sources of alternative supply). Prices rose to record levels and stayed high in the second half as local fishing conditions improved markedly. Mauritanian and Pacific catch rates remained low. Bigger catches and higher prices enabled a first half loss to be rapidly recovered.

Namsov, a dedicated horse mackerel-fishing business, has worked with government for several years to protect Namibia’s fish resources. In the second half, environmental conditions and biomass improved, indicating that long-term resource management is working.

Challenging conditions were faced by Namsea, our inshore fishing business focused on pilchards. Inshore pelagic catches were depressed by the total absence of sardinella in Namibian waters.

Upgrading of our mid-water trawlers has been completed. All vessels now have the equipment to bring in a top quality product.

We made a strategic investment in a small Angolan inshore fishing company. The transaction gives us full managerial control. The business will not be fully operational until mid-2009, but creates exposure to a resource and market of considerable potential.

The principal operational challenge relates to cost management at a time of soaring fuel prices as fuel now accounts for almost 50% of operating costs.

We continue to maintain rigorous resource management as we believe good environmental practice and good business are the same. We expect our marine environment to remain stable for the near future, supporting stable quality, catches and quotas. Competing sources of supply may take time to recover, helping to support firmer prices. The outlook for the pilchard resource – and Namsea – remains challenging, however.

Should environmental conditions maintain their improvement, we may face capacity constraints. To take optimum advantage of the available quota we will explore opportunities to add to our fleet. Our upgraded trawlers remain a source of competitive advantage, given the dearth of well-equipped vessels suited to our waters.

On balance, the horse mackerel market remains favourable and we will seek continued growth.

Bidcom

The business is Bidvest in microcosm, with operational arms in all the principal areas of activity of the South African parent, including stationery and office furniture, electrical supplies, foodservice, automotive services, office solutions, printer consumables, freight management and travel services.

The division performed somewhat ahead of expectations, with solid contributions from most businesses. The Namibian economy is performing well, with 4% GDP growth forecast for 2008. Economic fundamentals are strong and the balance of payments remains healthy, buoyed by a steady increase in foreign direct investment. Several of our businesses benefited from special factors such as higher activity levels in the civil construction sector and stronger freight volumes along the Trans-Caprivi Corridor.

Waltons Stationery achieved pleasing results, benefiting from its broad geographic footprint and quality range while Cecil Nurse surprised on the upside thanks to a strong order book.

Kolok’s operating profit was below management expectations. Margin pressure remains intense in the market for printer consumables and computer peripherals.

Globe Electrical put in a reasonable performance. Its electrical supply business benefited from increased infrastructure spending and major civil works.

Manica had a good year thanks to strong demand for ships agency, clearing and forwarding, warehousing, quayside support and logistic solutions. The business has well-located assets at the ports of Walvis Bay and Lüderitz, and Windhoek and Hosea Kutako airports. Higher port activity and robust volumes along the Trans-Caprivi Corridor supported growth. The business also won the contract for shore-base logistics services to the Tullow oil/gas exploration project.

Caterplus performed below expectations. The hospitality sector has become increasingly competitive and margins were under pressure.

Budget Car Hire performed in line with budget thanks to strategic representation at all major centres and contract gains in the film industry.

Express Air Services maintains a strategic presence at Windhoek airport, but performance was sluggish.

New management is in place at Minolco with the task of recovering the brand’s former market- leading position. Performance has improved, but recovery remains work in progress.

Rennies Travel achieved pleasing results. Expansion of the business base through alliances with independent contractors is going well.