Bidcorp looks for buyer for Best Food Logistics
Bid Corporation is considering its options for the disposal of Best Food Logistics, which hit the headlines in March 2018 when it won back a large part of the KFC contract it had previously lost to DHL.
Bidcorp, which is headquartered in South Africa, has been exiting low margin logistics activities globally where they do not fit into its model for its foodservice businesses, according to the annual result for BFS Group Ltd, the UK subsidiary which includes Best Food Logistics.
BFS said: “By 30th June 2018, a proposed exit was close to finalisation for this non-core business.”
However, the prospective purchaser of the Best Food Logistics business notified Bidcorp that it had decided not to proceed with the purchase of the business.
“The Best Foods business remains a non-core activity in respect of Bidcorp’s global foodservice operations, and the intention is to dispose of this business. Accordingly, Bidcorp is currently considering alternative proposals which were previously suspended due to the advanced sale process.
In 2017, Best Food Logistics (then called Bidvest Logistics) lost its contract to deliver to 850 KFC outlets to a DHL led consortium. But following well-publicised start-up delivery problems after the transfer of the business, in March last year KFC returned to Best Food Logistics to handle supply for 350 restaurants in the north of the UK.
Paul Whyte at Bidvest Logistics said at the time: “We are delighted to welcome KFC back to Bidvest Logistics. As the UK’s leading foodservice logistics specialist we understand the complexities of delivering fresh chicken. KFC is a valued customer and we will provide them with a seamless return to our network.”
Bidcorp decided to dispose of the Best Food Logistics business following disappointing results in 2017. In its annual report for 2017 it said: “Margins remained under pressure as QSR (quick service restaurant) deliveries fell below expectation and the business exited a major QSR account.
“Logistics remains a non-core activity and management remains committed to finding a viable solution for the future of the business.”
Best Food Logistics is now treated as a discontinued business in BFS Group’s accounts for the year to 30th June 2018.
In 2018, BFS reported an operating loss of £37.8 million for Discontinued Businesses on revenue of £1.1 billion. This compared to an operating loss in 2017 of £4.7m on revenue of £1.2 billion.
BFS’s Continuing Operations produced an operating profit of £64.6m in 2018 on revenue of £1.4bn.
BFS also reported a non-cash impairment of £42.6m in the cost of investment in PCL 24/7 Transport Limited, after a second year of disappointing trading at the chilled distribution business. The impairment takes the net book value of the investment to nil.
In its report for the half year to 31st December 2018, Bidcorp said the performance of the UK Contract Distribution business (Best Food Logistics) significantly improved in the second half of 2018, though the business still recorded a small loss. “Service levels have improved and customer pricing has been substantially increased to more fully reflect the risk and reward of these activities.”
