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Operator: Good day, everyone, and welcome to The Bidvest Interim Results Presentation FY '26. [Operator Instructions] Please note that this event is being recorded. I would now hand you over to Corporate Affairs Executive, Ilze Roux. Please go ahead, ma'am.
Ilze Roux: Thank you, Judith. Good morning and good afternoon, everyone. My name is Ilze Roux, the Corporate Affairs Executive, and I have the pleasure of welcoming you to this call today. Thank you for your interest in Bidvest. These results reflect resilience and our focus on operational excellence and cash generation. As is customary, Mpumi Madisa, Group CEO, will make some high-level remarks before Mark Steyn, our Group CFO, delve deeper into these income numbers. Mpumi will then follow with a detailed review of each division's performance and close with a reflection of progress against our priorities and the outlook. There will be an opportunity to ask questions at the end of the session. Without further delay, I hand over to Mpumi. Thank you.
Nompumelelo Madisa: Thank you very much, Ilze, and good morning or good afternoon, depending on which part of the world you're joining us from. Thank you for joining us this morning. We are very pleased to present a resilient set of results for the first half year. Reflecting on progress made since the unbundling of Bidcorp in 2016, it's really pleasing to note the portfolio realignment and the extent to which we have rebuilt our international footprint. Our 130,000 employees are located in 14 countries across approximately 750 branch locations. Our client base remains extremely diversified with about 1 million customers across the group. We serve multiple industries and all geographies with limited concentration risk. 27% of our revenue is generated offshore and of the 25% of our profits that are earned offshore, 55% are from our global hygiene operations. We are proud of the above progress and remain focused on generating sustainable profit growth and returns. In the period under review, we increased revenue by 4% and profitability by 7%. Free cash generation is a highlight of the results. We optimized our debt profile, and Mark will elaborate on this in his presentation. We closed out the remaining acquisitions in the pipeline with the large one being Aquatico, a water testing business in South Africa. Our M&A pipeline is now materially depleted with very small transactions to be finalized in the second half. Adcock has been successfully delisted with synergies being explored. We're nearing closeout time lines for finalization of our terminal operator agreements. And lastly, as communicated in the recent SENS announcement, The Bidvest bank transaction with Access Bank plc has terminated due to Access Bank being unable to secure the required approvals within the last update. Our sales process has already been restarted, and we're confident that we'll be able to accelerate time lines. Moving to the operational overview. Group revenue at ZAR 67 billion is up 4%, with Services International, Services South Africa and Automotive delivering strong revenue growth. The gross margin increased 43 basis points to 28.1% due to an improved sales mix, lower disbursements in our clearing and forwarding operations and improved factory recovery. Operating expenses were well managed, increasing 3.4% and only 1.2%, excluding acquisitions. Trading profit increased by 7% to ZAR 6.7 billion with all divisions making a positive contribution. Our trading margin expanded from 9.8% to 10.1%, reflecting margin improvement in 5 of the 6 divisions. As indicated earlier, the highlight of the results is our cash generated by operations, which is up 36% and free cash, which is ZAR 2 billion higher than prior year. Our balance sheet remains strong, and our gearing levels remain unchanged from the June year-end at 2.2x net debt to EBITDA. ROFE at 37.6% compared to 37.9% in the prior year and ROIC at 13.4% compared to 14.4%. We recognize that returns have tapered due to capital deployed over multiple financial years whilst we were rebuilding our international footprint. We are comfortable with the size and scale of the offshore operations and are now focusing on improving group returns. We have a clear plan, and we'll detail this later in the presentation. Our overall result is HEPS at 5.1% and normalized HEPS at 5.3%. In line with our dividend policy of 2x to 2.5x cover, the group declared an interim dividend of ZAR 4.95 per share, up 5.3% on the prior year. And then just giving an update on our hygiene story, we remain focused on building an international hygiene services business with our hygiene footprint now spanning across 11 countries where we occupy #1 position in 8 of those countries. Structural drivers such as urbanization and growing health and wellness awareness remain intact and will continue to support future growth. As indicated earlier, 55% of profits in Services International are from our Hygiene operations, and this compares to 50% in the prior year. Hygiene profit growth in the first half has been strong, up 20%, whilst margins -- while profit margins have accelerated from the industry norm of around 15% to 18.2%. We remain confident in our ability to take a leading position in the hygiene listed space in the near future. And now I'd like to hand over to Mark for the financial overview.
Mark Steyn: Thank you, Mpumi. Good morning, good afternoon, everyone. Just some quick introductory comments before we dive into the detail. The first half saw a resilient and strategically disciplined performance with revenue growth, improved gross and operating margins and good cash generation, and all this despite mixed macroeconomic conditions and some sector-specific challenges. That said, it's very pleasing though to see some South African tailwinds start to come through. It has come off the FATF gray list and S&P have upgraded our sovereign rating. The interest rate cuts are starting to have a meaningful impact, especially in the automotive and property sectors. The energy and logistics sectors are being supported with meaningful government spend on infrastructure, which is evident in both. We are seeing rand strength against a broad basket of hard currencies. And while this may be earnings negative in the short term, a stable rand is good for the country in the longer run. And finally, it's encouraging to see that the SA budget was a bit more expansionary than in previous years, which will hopefully support medium-term growth. In terms of our divisions, they've all shown growth in the half, especially Services SA and Commercial Products performed very well. Our hygiene services, both locally and offshore, continue to show robust growth. Freight was able to turn around a soft top line result with good margin and expense control. And similarly, Branded Products delivered strong margin management, cost control and improved inventory management. The Automotive division benefited from improved new vehicle volumes, although margins are under pressure following the large influx of lower-priced Chinese vehicles. And Adcock had a very strong result of what was a seasonally low base. Generally, while the consumer remains under pressure, we're starting to see pockets of improvement. Our cost control was excellent as evidenced by the improvements in both our gross and net margins. The cash performance was very pleasing with good operating cash generation and significantly reduced seasonal absorption of working capital. Our cash conversion and free cash flow generation is also very solid. Strategically, it's been a very good period, and as promised, much work has been done on the funding structures. We successfully completed our second Eurobond issuance for a $500 million 7-year bond. You'll recall the first one was 5 years. The bond priced at a spread of just 40 bps above the SA sovereign curve at the time, which was a very pleasing outcome. These funds were used to part redeem the existing Eurobond and also pay down a portion of the offshore RCF. We also issued a new GBP 130 million 5-year term facility, which was entered into at very favorable rates produced to further repay the RCF. Domestically in South Africa, we successfully issued 3-, 5- and 7-year bonds, the value of ZAR 2.3 billion. These were issued at record low spreads, and that funding was used to purchase Aquatico and to repay a maturing bond. We also utilized surplus funding to repay 2 preference shares of ZAR 2.1 billion, which was our most expensive net debt in the mix. We have good debt capacity, both internationally and locally, and our net debt to EBITDA has increased slightly as a result of M&A this half, but it still sits comfortably within our covenants. From an acquisition perspective, we closed 3 acquisitions in the quarter. So we're working down our pipeline with Aquatico and environmental monitoring and testing business being the largest of these. And this now forms part of our testing, inspection and compliance TIC offering within Services SA. As Mpumi mentioned already, the disposal of Bidvest Bank continues despite the expiration of the sale agreement with Access Bank and the new process has commenced. In terms of Bidvest Light, we have signed an SBA, which has been concluded and we await regulatory approval for that. Both these 2 entities continue to be disclosed as discontinued operations. And then finally, Adcock Ingram, the scheme of arrangement was approved by shareholders in October '25, and has been finalized. Adcock has now been delisted with just 2 shareholders and Bidvest remains the majority shareholder with substantially the same shareholding. With this as a backdrop, let's look at now the more detailed results. From a revenue perspective, revenue up 3.7% to ZAR 66.7 billion was supported by good acquisitive growth. We've seen good growth in the revenue terms across the mix and specifically in Services SA and International, which was supported by acquisitions. Only 2 divisions, Branded Products and Freight saw top line contraction and both responded well with very positive operating leverage to ensure profit growth. The low GDP growth that is present in most of our jurisdictions is leading to competitive and price-sensitive demand. And I guess, to some extent, this is also exacerbated by lower -- or slower customer decision-making, and these have all put pressure on revenue levels. It will unpack the divisional results in a bit more detail later in the presentation. In terms of gross income, our gross profit is up 5.3% with a 43 bps improvement in the margin to 28.1%. That's very pleasing. Overall margins and margin mix are actively managed across the businesses. And the improved operating leverage and positive business mix was somewhat offset by structural shifts in the auto sector and certain contract rescoping. Our expense performance was very pleasing. Operating expenses up 3.4% in total with organic expense increases of 1.2%. In certain of the services businesses, we are seeing wage inflation in excess of CPI, which is impacting margins. And a number of businesses through the half have completed restructuring and rationalization processes, which should further improve the operating leverage into the second half. Our expense ratio was very similar to last year at 18.1%. And overall, this is an excellent broad-based expense outcome. Trading profit is up 6.9% to ZAR 6.7 billion. Very pleased with that and with an almost equal contribution from organic and acquisitive growth. Services SA and Services International produced excellent results. Commercial Products and Branded products produced good results as trading pressures, particularly on margins persist. Freight overcame a soft revenue line as disbursement level sales fell with good margin mix and excellent expense control. Automotive was stable, supported by a good insurance result and higher new car volumes, but retail margins are being materially impacted by the influx of cheaper Chinese vehicles. And Adcock had a very pleasing result, up 20%, albeit off a slightly lower prior year base. Our effective tax rate of 26.7% is unchanged from last year. And finally, our acquisition costs are pleasingly down 5.7% due to lower M&A activity in the half. The bulk of these costs that we did incur related to the Adcock delisting and the Aquatico acquisition. We expect these costs to lower significantly in the second half. Moving then to our cash generation. Cash flow for the first half was very good. Underlying cash generated by operations before working capital, up 7.2% to ZAR 8.7 billion. We traditionally absorbed working capital in the first half, no different this time around. We absorbed ZAR 2.6 billion in working capital. What was very pleasing though is this number was ZAR 1 billion lower than the outflow of ZAR 3.6 billion last year. In the mix, organic trade payables decreased, which is seasonally consistent. And there's been a very focused or continued focus on reducing inventories, and it's pleasing to see this coming through, particularly in commercial products and automotive. Our cash conversion is at 70% nicely up from 45% last year. And our free cash flow at ZAR 3.8 billion is well up on the ZAR 2 billion from last year. The bulk of the cash generated has been applied to working capital, debt repayment and normal CapEx with very limited M&A through the period. In terms of the cash generation graph, which we presented here, you can see the seasonal cash outflow, which is consistent with the group's normal working capital cycle. I think what's really pleasing, though, you can see how this is getting progressively over the last 4 years. Moving then to our capital structure. And as I said earlier, this has probably been one of the busiest 6 months that we've ever had from a treasury perspective, both from an international issuance perspective and domestically. On the offshore front, we issued the new $500 million 7-year bond that's extended from the initial 5-year bond that we issued in 2022. This bond was issued at 6.2% with the spread just 40 bps above the SA sovereign curve at the time, which was very pleasing, and we've subsequently won an award for this issuance. The funding was used to settle a tender offer on the 2026 Eurobond for $292 million with the balance of $186 million due in September this year, and that will be settled from the RCF. We also raised offshore a GBP 130 million term facility at 5.6%, which was used to further pay down the RCF. On the domestic front, we issued GBP 2.3 billion in bonds over 3-, 5- and 7-year tenures. And these were all issued -- all 3 categories were issued at the lowest spreads we've achieved to date. From a capacity perspective, we have EUR 412 million available offshore by the RCF and a further EUR 12 billion available domestically. We have also reflected on this graph -- sorry, on the graph on the bottom left, the maturity profile, which has been nicely extended with both the pound term facility that we've taken up and the 2033 Eurobond. So there's a very conscious decision about managing the maturities over time. If we then move to our overall debt funding and just how we're looking at optimizing it. We have redeemed the most expensive debt in the mix, which was the ZAR 2.1 billion in preference shares that was redeemed using existing facilities and our weighted average cost of debt has stabilized now at 6.4%. We do, however, continue to retain an overweight position in variable rate debt, 63% variable, which is aligned to expectations of further rate cuts. Our finance costs, excluding IFRS 16 and the hedge accounting adjustments is up -- or up 6.8%, which have been impacted slightly by the higher net debt levels. Our net debt to EBITDA, as Mpumi said earlier, at 2.2x, remains comfortably within our covenant of 2x, although we are targeting a lower level in the near term of below 2x with an internal sweet spot of about 1.5x. We will use the bank proceeds to further reduce costs, and this will also then lower this ratio. We have -- we've included a net debt graph here. And what you can see from this is the accelerated M&A over the last 3 years, particularly from '23 to '25, has grown the base. What you can see is this has stabilized now in this half by -- following the suspension of M&A, while we are reducing gearing levels, and we expect this to reduce further in the second half with a stronger working capital release. Similarly, the growth in our debt cost has also flattened. Our EBITDA interest cover is at 6.4x, comfortably in excess of the covenant of 3.5x. We continue to add new and cheaper funding sources into the mix. Moving now to our returns. As Mpumi said earlier, we're very cognizant of return levels and managing these over time in alignment with our M&A and CapEx investments. As we add investments into the base, these are brought on board with a very clear plan to deliver value over the medium term, and we actively track this. Our base specifically over the last 3 years has expanded materially with the majority of the M&A in services businesses. These investments typically have low funds employed and high goodwill and intangible. This is evidenced by the graph alongside, where you can see the invested capital growing disproportionately over the last 3 years. This will start to normalize with the slowdown in M&A and more specifically, as we start -- as we increase our cash generation and start to pay down debt, you will see that number come down further. We have seen some softer macro conditions in the last 2 years, which have also softened returns. The expectation is that we should see a stronger second half, both from the slowdown in M&A and the increase in -- or the greater release of working capital in the second half, which should aid this ratio. In terms of levers to further build returns, focus of the group is driving organic growth, which has been flattish in the recent past, and we do see growth accelerating in the second half. Traditionally, the second half also produces improved free cash flow generation off the back of the working capital release. We've also added more hygiene and FM businesses into the mix, which structurally are more cash generative. So with the suspension of M&A in the short to medium term, this will allow more free cash flow to be allocated against debt levels. Finally, just moving to the discontinued operations. I think we've largely covered this, but obviously, the disposal process for Bidvest Bank continues. We're working very hard on getting a transaction over the line as soon as possible. From an operating perspective, the bank did experience some top line pressure in the half with interest rates declining and slower capital deployment, but the deposit book continues to remain very stable and all the regulatory ratios are healthy. In terms of Bidvest Life, as I mentioned, the SPA and SPA has been signed. We're waiting for regulatory approvals on that transaction. Both of these entities have been disclosed as discontinued operations in terms of IFRS 5. Also in terms of IFRS, the depreciation and amortization in relation to these 2 disposed entities continues to be suspended, and we have adjusted for that in the normalized headline earnings calculation. Just some final concluding thoughts. It's encouraging to see some tailwinds in South Africa, even when other parts of the world have been adversely impacted by the geopolitics. While the trading environment and broader macros remain challenging, we've positioned the group both operationally and strategically for good growth. We will continue to focus on utilizing free cash flow to further deleverage the group. Margin and cost management as well as cash generation continue to remain core to our DNA. And our international expansion, specifically into hygiene services is gaining proper momentum and making us a force to be [ reckoned ]. Thank you.
Nompumelelo Madisa: Thank you very much, Mark. Nice ending. So let's move to the operational overview, starting with Services International. The team delivered a pleasing result, anchored by a strong performance from our global hygiene operations. Revenue at ZAR 22.5 billion is up 5% and trading profit at ZAR 2.2 billion is up 8.3%. Revenue growth was driven by new business wins, contract pool growth and contributions from the Citron and Egroup acquisitions. Our Ireland and South Africa facilities management operations were negatively impacted by contract restructures and lower ad hoc revenue. The gross margin expansion in the division is attributable to a change in mix as the Hygiene operations gross profit contribution increased year-on-year. Cost control was excellent with expenses increasing only 1.7% excluding acquisitions. The gross margin expansion and disciplined expense management resulted in not only profit growth but also an excellent trading margin expansion from 9.3% to 9.8% in the period. Cash generation was excellent. And ROFE at 159% remains a solid return. Turning to the operations. 75% of profits in the division are generated offshore. Our Hygiene operations outperformed, delivering exceptional profit growth. In constant currency, the Singapore, South Africa and U.K. Hygiene businesses delivered strong profit growth, whilst our newly acquired North America operations delivered ahead of business plan. Our Facilities Management operations contracted slightly, primarily due to the revenue pressure referred to earlier and the knock-on margin impact. The South African cleaning business was exceptional, though, delivering a standout double-digit profit result. I'd like to congratulate the Services International team for a commendable performance. Moving to freight. The team delivered a good performance with bulk commodity cyclicality normalizing and volumes improving. Revenue at ZAR 4.5 billion was driven by annual rate increases, increased storage capacity and higher grain volumes. This growth was countered by lower clearing and forwarding volumes in South Africa and Namibia, resulting in a 4.2% decline in revenue. Margin expansion as a result of reduced disbursements, coupled with an excellent 0.8% decline in expenses resulted in a trading profit of ZAR 1.2 billion, up 7% and a trading margin improvement from 23.1% to 26.7%. Due to changes in working capital and growth CapEx deployed in our bulk liquid terminal, ROFE declined to 40% from 46% in the prior year. Looking at the operational results. Our bulk grain volumes increased 7% due to higher maize, rice and wheat volumes, resulting in an exceptional profit increase in this bulk grain terminal. Our bulk liquid operations delivered a good performance, driven by annual rate escalations, higher tank rental and the 8% volume increase that was supported by improved capacity from the new fuel tanks in Richards Bay commissioned in May 2025. The 2% volume decline in our bulk mineral terminal was countered by annual rate increases and a strong increase in chrome volumes, resulting in good profit growth. Our multipurpose terminal delivered a phenomenal result as the volumes of chrome ore exports handled doubled in volume. As indicated earlier, we experienced volume declines in our clearing and forwarding operations in South Africa and Namibia. The volume and margin pressure in these operations is due to lower volumes from key large clients, rate reductions in an effort to retain contracts and reduced oil and gas activity in Namibia. Our Mozambique operations, whilst having delivered an improved result, remain constrained by lower volumes and margin pressure. And then lastly, in freight, we expect to complete the multipurpose and import warehouses in Namibia in the latter part of the fourth quarter. I must congratulate the freight team for a solid result. Moving to Services South Africa. The team delivered an excellent result with most businesses delivering profit growth. Revenue at ZAR 6.9 billion is up 7% with the hospitality and our newly formed testing, inspection and compliance clusters recording the strongest growth. Our newly acquired water testing business, Aquatico, made its maiden contribution to the division. The gross margin deteriorated somewhat due to pricing pressures, change in revenue mix and pressures on cost recovery. Operating expenses increased only 1% and organically only 0.5%, reflecting excellent cost control. Trading profit at ZAR 793 million is up 10%, and the trading margin expanded from 11.2% to 11.5%. ROFE at 92.3% is down on prior year due to increased funds employed in the security cluster and the inclusion of Aquatico. On the operational side, the hospitality and catering cluster delivered phenomenal growth driven by an extraordinary performance from the lounges as passenger volumes reached record levels. The security cluster was slightly down and due to pricing pressures and the loss of high-margin work -- sorry, the security cluster was slightly down due to pricing pressure and the loss of high-margin work. Outside of this contraction, growth and solid performances were reported by the cargo, warehouse management, trucking and payment technology businesses. Our travel cluster experienced contraction in corporate travel volumes, whilst inbound travel volumes remained strong with a robust forward order book. The Allied cluster was down on prior year due to operational and margin challenges in the laundry and amenities businesses. Notwithstanding weather patterns that negatively impacted volumes, good recurring revenue in the water business and contractual sales in indoor and outdoor plants was reported. And lastly, in Services SA, our testing, inspection and compliance cluster, which now comprises WearCheck and Aquatico delivered a phenomenal profit result, driven by solid revenue growth and record samples processed. And I must congratulate this team again for an excellent set of results. Moving to Branded Products. The team delivered a solid result with 3 of the 4 clusters up on prior year. Revenue at ZAR 6.9 billion was down 1.6% due to reduced and delayed spend from large government clients. Increased competition from lower-priced imports and orders in the prior year that did not repeat in the period also impacted revenue. The gross margin improved impressively by 50 basis points to 29.8%, driven by a stronger product mix, production efficiencies and good management of direct costs. Similarly, operating expenses were exceptionally well managed, declining 1.8%. This excellent margin and expense management translated into a trading profit increase of 5.4% to ZAR 748 million and a trading margin expansion from 10.1% to 10.9%. ROCE reduced to 37.3% due to increased investment in working capital. Looking at the operational performance, the Office Products cluster delivered a good result, driven by superb growth in the furniture sector as this business continues to differentiate its product offering. Notwithstanding sales pressure, the Office Automation business grew profits off a high base. The Data, Print and Packaging cluster delivered a good result, driven by resilient demand, improved sales mix, factory efficiencies and outstanding expense control. The Consumer Products cluster contracted year-on-year as sales increases in appliances were offset by materially lower sales in our TV and satellite accessories business. The knock-on margin impact due to mix and higher rebates reduced profitability in the consumer cluster. And lastly, the Office & Leisure cluster delivered a strong profit growth, driven by a good performance from our lounge business -- sorry, our luggage business and a contribution from the outdoor cookware and accessories business. Margin and expense management was excellent in this cluster. I'd like to congratulate the team for a robust set of results. Moving to Commercial Products. The division reported an admirable result, reflecting a good turnaround in performance. Revenue at ZAR 8.6 billion is up 2.5%, reflecting a small uptick in some markets and thankfully stabilization in renewable sales. The gross margin increased slightly to 28.9% and operating expenses increased below inflation by 2.7%. Strong operating leverage translated a 2.5% revenue growth into a 9.7% increase in trading profit to ZAR 594 million. The trading margin also improved to 7% compared to 6.5% in the prior year. Whilst ROFE declined to 17.7%, there is a notable improvement in returns from the 16% reported at June year-end. The significant reduction in inventory resulted in excellent cash generation. Operationally, pedestrian revenue growth in the electrical cluster was offset by excellent margin and expense control. 4 new Voltec stores were opened in the period and renewable sales have stabilized above prior year's volumes. Our Plumbing and Related Products business continues to outperform as volumes and trade sales increased and 3 new stores were opened. Pressure was, however, felt across the packaging, Thai franchise warehousing and DIY and tools businesses due to declines in revenue and margin compression as industrial and manufacturing activity remains muted. Lastly, the Workwear, industrial catering and leisure businesses delivered excellent results as volumes remained robust in certain markets and margins expanded and costs were also well controlled. I must congratulate this team for a very strong set of results. Our last division, Automotive, delivered profit growth amidst an extremely price competitive and evolving retail market. Revenue at ZAR 14.8 billion is up 7%, supported by a 15% increase in new vehicle sales -- volume -- sorry, in our sales volume. This excess supply of new vehicles did, however, contribute to considerable discounting and the substitution effect of the oversupply resulted in reduced demand for used vehicles. Fleet sales were materially up on prior year and our secondhand motor retail business produced excellent top line growth. The gross margin declined by 1%, which in value was quite a big number, and this was due to a 0.6% decline in new vehicle margins and a 0.8% decline in used vehicle margins. Lower margin fleet sales also impacted the gross margin. Expenses remained tightly controlled at an increase of only 0.8% and trading profit was constrained by the margin compression referred to earlier, resulting in a profit increase of 1.8% to ZAR 515 million. The division's ROFE at 23% is down from last year's 26.8% due to higher working capital as we balance between own stock and consignment stock. Operationally, in the franchise model retail cluster, the increase in new vehicle volumes was offset by the decline in used vehicle volumes. And as reported earlier, the margin declines in both categories negatively impacted profit growth. However, on the upside, expense management in the cluster was outstanding, neutralizing the negative margin impact. And in the period, we continue to diversify our representation, onboarding 8 new vehicle brands. Our non-franchise motor retail cluster is gaining momentum. Our goal is to have all our branches nationally at full capacity by the end of the financial year. We've reached a point where units bought match units sold in a month, and this is critical because it talks to asset turn. The planned full year contribution from this business will move the dial for the division. And lastly, in the automotive allied cluster, our vehicle inspection and body building business are holding their own in a competitive landscape, whilst the insurance businesses outperformed, delivering record results. I must congratulate the team for delivering a robust set of results in a very, very difficult operating environment. And then moving to Adcock. Adcock delivered an outstanding improvement from last year's half performance -- half year performance with all business units contributing to growth. Revenue at ZAR 4.8 billion is up 3% and trading profit at ZAR 620 million is up 20%. Revenue was driven by a 3.6% price realization and 2.8% organic volume growth. The 2% increase in gross margin due to an improved sales mix and excellent factory recoveries, coupled with a 4% expense increase resulted in a 20% trading profit growth. Prescription delivered a standout performance with all segments except generics, reaching their growth targets. The OTC and hospital divisions delivered excellent results due to exceptional growth in OTC's top 10 products and solid growth in the renal and medicine delivery portfolio. Consumer reported marginal growth due to lower demand for key large brands, a fantastic result from the Adcock team. Moving to the outlook. I'd like to give some update in relation to progress made on the immediate priorities that we had outlined in the previous reporting period. On cash generation, we are making strong progress with a cash conversion improvement from 45% to 70%. And as Mark indicated earlier, free cash up ZAR 2 billion due to improved inventory management. This is an excellent cash performance, and we expect an even better cash position at year-end. Our deleveraging plan was dependent on receipt of the proceeds from the sale of Bidvest Bank, Bidvest Life and FinGlobal. These proceeds would have reduced our net debt-to-EBITDA by 0.2x. We've, therefore, not yet delivered on this priority, but aim to have the disposal process for Bank and Life finalized with cash in hand before the end of this calendar year. Securing the longevity of our freight operations is a key priority. And as indicated earlier, we are nearing closeout date for contract finalization. Negotiations have progressed materially and our confidence in successfully finalizing these contracts is demonstrated in the approval of 2 growth CapEx valued at ZAR 550 million, which, of course, are subject to signed terminal operator agreements. And lastly, extracting value from the recently concluded acquisitions remains paramount. The U.K. Hygiene integration is complete and the combined business is delivering ahead of expectation. A lot of time has been spent understanding the North American market and required strategy adjustments have been made to align to local nuances. We will be expanding our North America footprint with the opening of our first branch in New York in the fourth quarter of the current financial year. Procurement synergies are yet to be realized in the North America operations as we are currently cycling through existing stock. Our automotive diversification strategy is gaining momentum with cross-selling and collaboration across the various clusters taking shape and contributing to profitability. And the last update is our testing, inspection and compliance cluster is a strong new growth platform and the 2 businesses in that cluster are formulating tactical joint go-to-market strategies. On our last slide and the outlook, we have our eyes set on 3 priorities: firstly, accelerating organic growth; secondly, improving cash generation; and lastly, as Mark elaborated in his presentation, improving returns. Starting with organic growth. In South Africa, we are seeing green shoots in the hospitality sector, inbound tourism and the testing inspection and compliance sector, where we have now more than doubled our scale and service offering. We are seeing an increase in large power-related projects as Eskom's focus on service delivery gains momentum and the export bulk minerals sector remains robust, obviously driven by commodity prices. Various synergies across clusters and across divisions will be explored, and these will contribute to incremental growth. The low 1.5% SET increase in Pharmaceuticals will taper growth momentum in that operation. Offshore, we expect a continued strong performance from all hygiene businesses as contract pool growth continues and synergies and sourcing optimization matures. Whilst new contracts will be mobilized in the second half in our facilities management businesses, we do expect full year growth to be moderated somewhat due to the late start of new contracts and margin pressure explained earlier. Acquisitions concluded locally and offshore will also annualize. On cash generation, both Mark and I have already said a lot, the first half cash result was good. And as is customary, we expect an even stronger cash performance by year-end. The investments in acquisitions over the past years has, as expected, placed pressure on returns. Scaling our facilities and hygiene operations outside of South Africa through acquisitions was a clear strategy, and we've delivered on that. We will now take time to rebuild our return profile as returns have tapered due to cumulative capital investment. Lastly, our focus on delivering a good performance goes hand-in-hand with our focus on contributing to building sustainable communities. We're making good progress with our new 2030 sustainability framework, ensuring that our focus on people, purpose and performance is well integrated. This framework has been aligned with senior and executive management incentive KPIs to ensure that our financial and sustainability aspirations are fully reflected in remuneration. A comprehensive sustainability update will be provided at year-end. As I close, I'd like to remind us all that in Bidvest, we have a platform of businesses with scale, businesses with strong brand equity and a track record of service delivery and customer centricity across 14 countries in over 750 branch locations with 130,000 employees serving more than 1 million clients. We will continue to look after our people because they are what makes Bidvest work. They are our most important asset. On behalf of myself, Mark and Jill, I'd like to thank our management teams across South Africa, Swaziland, Namibia, Mozambique, Mauritius, the United Kingdom, Ireland and Northern Ireland, Spain, Australia, Singapore, Canada and the U.S. I'd like to thank them for their contribution for this half year's performance, their hard work, commitment to excellence, resilience and agility in this ever-changing world. To our shareholders, thank you for your support. We're halfway through this race and aim to finish strong. Thank you very much.
Ilze Roux: Thank you, Mpumi. Thank you, Mark, for those prepared comments. I am going to check on the lines. If you have -- if you want to pose any questions, Judith is going to explain to you how to do so. And I have some questions here on the [indiscernible] side. Judith?
Operator: [Operator Instructions] At this stage, we have no questions from the telephone lines. I will now hand it over for questions from the webcast.
Ilze Roux: Thanks, Judith. Just a quick break. Mark, the first question is for you is the question is, can you please speak of any upcoming debt refinancing requirements or plans?
Mark Steyn: Sure. No problem. So there's no maturities that are coming up in the near term. If you look at that maturity graph we included in the pack, you will see there's an FY '26 amount reflected there. That is just normal 366-day general banking facilities that just roll on a continuous basis. So there are no significant maturities. The ones -- the 2 that we are planning for FY '28, we have the RCF term, the [ EUR 750 million ] facility maturing. And we'll start working towards that in the latter part of this year and early next year. But there's nothing else significant that we're worried about.
Ilze Roux: Thank you very much for that, Mark. Mpumi, I'm going to combine 2 questions that we have here. The first is do you plan to, in future, list the Global Hygiene business? And then I suppose second sort of linked to that, the comment is that ROFE is a high proportion of KPIs and ROFE is high in the Hygiene businesses. Is this the reason why we are in Hygiene service -- Hygiene services internationally? So really the inverse of the question is, in the absence of high ROFE, would we have been in Hygiene services?
Nompumelelo Madisa: All right. So on the first one in terms of listing, I mean, we're not there. We're in the process of creating scale globally. We are chasing the #1 listed and want to take that #1 position. We want to extract as much synergy as we can and really build a big platform from a hygiene perspective. So I mean, I can tell you in our boardroom, we're not having a conversation about a listing of the hygiene businesses, whether in the short term or medium term or long term, that conversation is not taking place at the moment. And then in relation to why we're in hygiene, I mean, returns are important. So it is one factor, but it is not the only thing that drives us. When we announced our strategy around hygiene, we said that we were looking for markets that globally are fragmented, where we had confidence that we would be able to consolidate that market over time. We were looking for a business model that we knew well, a business model where in South Africa, we were a significant player and our market share was large relative and where we're competing with international, so we would be comfortable that we could compete with them in their home territory and win. And hygiene is one of those markets that we really, really understand well. Thirdly, we were looking for structural growth. So you also want to be investing capital in a space where structurally you know that there are other aspects that are supporting growth into the long term. And hygiene is one of those areas, the awareness around hygiene and wellness, it keeps on maturing every single year, and obviously was elevated after COVID, right? Everybody now knew the more increased importance of washing your hands, et cetera. And so structurally, hygiene is supported by a number of factors. And then there are financial KPIs. Returns is one of them, high margins is one of them, high cash generation is one of them. So there's a couple of financial metrics that also support this. So it's a couple of factors and all of those together are really the reason why we're in this hygiene space globally.
Ilze Roux: Before I let you go on the hygiene side, just 2 more questions that came in. Let's finish that on the hygiene side. The question is this growth up 20% and the margin, as you pointed out, is higher than industry average. Do you think why is the margin high? And do you think it's sustainable, is the first question around that. And then could you just -- the question is how much of the trading profit is hygiene, if you could just [indiscernible] that.
Nompumelelo Madisa: Okay. So yes, so we've done better than market, which I think is excellent. If you followed a lot of what we said when we initially acquired PHS, our margin was slightly below market. And as we've made the additional acquisitions of hygiene businesses in Singapore, in Australia and of course, now in North America, we've obviously now started integrating, but we're also working collectively from a sourcing perspective. So there's a lot of initiatives that we're putting in place, either sourcing or technology or AI, which is a sensor technology that we put in our dispensers. We're sharing all that IP. And it's all those initiatives that are really driving that margin. I would probably say, though, that the biggest impact on margin in this financial year is the integration in the U.K. So the integration in the U.K. between PHS and the Citron North America operations was a big driver, and PHS is our largest hygiene business. So when that business starts picking up in terms of margin, it will pull the entire operations with it. And you'll recall when we used to talk about one of the reasons why we wanted to do Citron is because the integration in the U.K. was almost gross to net. We would close all the branches. We would put all the Citron infrastructure onto the PHS branch -- to the PHS, sorry, branch infrastructure, IT technology, et cetera, and really just continue running those businesses. So the big margin driver has been what we've been able to do in the U.K. And then secondly, the Citron operations in North America are also on a net basis, higher margin than market. And so those 2 things are contributing to that.
Ilze Roux: That's just a confirmation of the hygiene...
Nompumelelo Madisa: We're looking 5% of Services International.
Ilze Roux: Thank you very much for that, Mpumi. Mark, maybe on the automotive side, if you want to answer that question. The investor notes that a material contract lost in the recently acquired Dekra. And the question was, did we identify that element during the DD? And then -- and secondly, investors are asking about a little bit more clarity on the used cars. But Mpumi, you did make those statements in your comments that the GP margins were 0.8% lower on used cars, the volumes were lower. We saw an uptick in new car side. So those were the comments you made about used cars. So Mark, maybe just the Dekra question.
Mark Steyn: Yes. Thanks, Ilze. So within -- in the Dekra transaction, specifically in the DD process, we identified that there was a material contract within Dekra that sits with one of our competitors in the used vehicle space. There was a very open discussion with the seller in terms of the likelihood of that contract remaining with Dekra post the transaction. Between us, we landed that there was reasonability that the contract would stay in place for a period of time. We priced the purchase consideration accordingly. As it subsequently turned out, we had that contract a little bit longer than what we anticipated, but it obviously has subsequently gone. But yes, it was appropriately priced in the bidding process.
Ilze Roux: Then maybe again sort of combining 2 same vein type of questions here. This is asking for an update on the services operations in Australia and Far East, i.e., Singapore based [indiscernible] that we have some operations and the reversal of work-from-home trend globally.
Nompumelelo Madisa: Yes. So I mean, our services operations in Australia is made up of quite a large cleaning business. You'll recall that we acquired BIC initially and then shortly after that acquired consolidated and that doubled our footprint within the cleaning space. And then we acquired a small hygiene business called Pure Hygiene. So we've got a hygiene offering. And then we've also acquired Egroup, which is a security business. So we have an FM business with 3 service lines: cleaning, security and hygiene and all of that, call it, integrated into one business, and that's what we're doing in Australia. From an Asia perspective, that would be rental hygiene services. So we're #1 in Singapore. That's our only Asia footprint through rental hygiene services. And then we added Clean Bio, which is a very, very small business that's just recently been integrated into [ ROA ].
Ilze Roux: Thank you very much for that, Mpumi. And then maybe a question, what is the view around the bank disposal costs now that the offer from Access Bank side, Mpumi?
Nompumelelo Madisa: Yes. I mean we're still going to run a process. So I'm like so less to give a view in case people who are in the process -- will hear this. I'm trying to find the right word. So the price that we had on the table is a price from 2 years ago and was a 20% premium to NAV. And obviously, based on the performance of the bank at that point in time, which was better than where we are now. There has been a drag on performance over the past 2 years. And unfortunately, the length that the sale process is taking is also part of the reason that's putting pressure on performance. So I guess it's fair to say that we're probably unlikely to land where we landed with Access Bank. I think that was a rich number. But we certainly are going to push to get the best price that we can and just optimize it as best as we can. We've got a plan to repay debt, right? We know what that number needs to be. So clearly, we're back solving to a number, and we're going to negotiate hard to get there because we are also solving for something else on the other side.
Ilze Roux: Thank you for that, Mpumi. Mark, and then just one more question here is you mentioned in passing the organic acquisitive split on trading profit, and investor asks, what would that sort of be on the revenue line?
Mark Steyn: Yes. So gross revenue up 3.7%, organic was 2.1%, and acquisitive 1.6%.
Ilze Roux: That was a very specific answer that sustain, Mark. Judith, any questions on the telephone lines?
Operator: Thank you. At this stage, no questions on the telephone lines.
Ilze Roux: All right. We have worked through all the questions on the webcast. Have pressed refresh and there's nothing else that came through. So I suppose that leaves us to say thank you very much for your time this afternoon, this morning. We appreciate it, and we now need to find us for any further questions that you might have. Thanks, Mpumi, Mark and Jill.
Nompumelelo Madisa: Thank you very much. Thanks, Ilze. Thanks, bye.
Mark Steyn: Thanks. Bye-bye.
Operator: Thank you all. Ladies and gentlemen, that concludes today's event. Thank you for joining us, and you may now disconnect your lines.