Wrap Text
Unaudited Interim Results for the Six Months Ended 31 December 2013
Imperial Holdings Limited
Registration number: 1946/021048/06
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN: ZAE000088076
Unaudited interim results for the six months ended 31 December 2012
Highlights and key data
Revenue 18% higher at R45 262 million
Operating profit improved 12% to R2 939 million
HEPS up 14% to 829 cps
Core EPS up 15% to 872 cps
Cash generated by operations up 111% to R2 061 million
Interim dividend increased 27% to 380 cps
Overview of results
Imperial group achieved a good first half performance with varied results across its portfolio, amid challenging
trading conditions in South Africa and Europe.
Revenue was 18% higher at R45,3 billion and operating profit increased by 12% to R2,9 billion. Core EPS improved by
15%. The annualised return on equity of the group was 22% and despite share buybacks and significant recent acquisitions,
the balance sheet remains healthy with a net debt to equity ratio (excluding preference shares) of 52%.
Imperials retail cluster of businesses (Distributorships, Automotive Retail and Financial Services) performed well in
the circumstances and each unit delivered growth. Revenue and operating profit in this cluster of businesses were up
14% and 19% respectively. This was achieved notwithstanding new vehicle volume growth and sales mix being negatively
impacted by supply disruptions experienced by the Distributorships division due to strike action and shortened work hours in
the manufacturing plants of Hyundai and Kia in Korea during the period. The Automotive Retail division, which is not
involved in the importation of vehicles, performed well. The Financial Services division had an excellent six months,
showing strong operating profit growth. Investment returns benefited from the robust growth in equity markets during the
period. Higher used car sales and further improvements in annuity streams from service, parts and related financial products
also contributed to the pleasing performance of this business cluster.
The Logistics division increased its revenue by 27%; however, operating profit reduced by 1%. Trading conditions in
both our Southern African and International Logistics divisions were challenging. The Southern African Logistics division
was negatively impacted by the transport workers strike during the period and the International Logistics division had
to contend with a slowing German economy, late in the second quarter.
Revenue in the Car Rental and Tourism division was flat, mainly due to a decline in revenue days, the growth in lower
rate insurance replacement business and a particularly weak performance of our tourism unit. Operating profit reduced by
13% as costs rose ahead of revenue improvement. Accident and theft costs were significantly higher in the Car Rental
business and the disappointing performance of the Tourism division also contributed to the decline in operating profit
from the prior period.
The group operating margin reduced from 6,8% to 6,5%. This was caused by the reduced margins experienced in the
Distributorships and Logistics divisions. The Distributorships division achieved an operating margin of 8,3% against 8,6% in
the prior period. This decline was mainly caused by the aforementioned supply disruptions, the impact on sales mix and
the weakening of the Rand. Automotive Retail improved its margin to 2,7% from 2,6%, with revenue up by 11%. The margin in
the combined Southern African and European Logistics business declined to 4,4% from 5,7%, primarily due to the transport
workers strike in South Africa during the period and challenging trading conditions experienced in both the SA and
International Logistics divisions.
The Financial Services division performed well, achieving operating profit growth of 43%. Revenue in the insurance
business grew by 12%, and investment income was higher than in the prior period, due to a larger exposure to equity
markets, which performed favourably. The underwriting margin declined to 7,2% from 9,0%. This performance was satisfactory
considering the high claims that affected the short-term insurance industry during the period. The life insurance unit grew
premium income by 20% while the rest of Africa insurance businesses continue to show good growth. Operating profit from
other financial services, which is mainly represented by LiquidCapital improved strongly from the annuity income streams
that include service and maintenance plans, vehicle financing alliances and a growing range of value added financial
products.
Operating profit generated in Africa outside South Africa rose by 36% to R183 million for the half year and has nearly
doubled over two years. The acquisition of RTT Health Sciences, now Imperial Health Sciences, which became effective
from January 2013 will further contribute to this growth. Operating profit from international activities inclusive of
Lehnkering increased to 18% of the group result.
The cluster of businesses involved in aftermarket parts, components and industrial equipment performed well. These
include Jurgens, Beekman Canopies, Midas, Turbo Exchange, Alert Engine parts, Goscor, E-Z-GO and the recently acquired
Datadot, Sedgeway, Bobcat and access equipment businesses. In total, across the group including NAC, these businesses
contributed turnover of R3,9 billion and operating profit of R282 million, 11% and 16% respectively better than the prior
period.
In aggregate, the groups operating profit grew by 12%, and core earnings per share (core EPS) increased by 15%. The
table below summarises the reconciliation from HEPS to Core EPS:
Cents per share Dec 2012 Dec 2011
HEPS 829 727
Amortisation on intangibles other than goodwill arising from business combinations 57 7
Business acquisition costs 3 28
Core earnings adjustments included in income from associates 1
CGT on post-acquisition earnings of associates disposed 1
Headline earnings from discontinued operations (1) (5)
Tax (17) (2)
Core EPS 872 756
Net finance costs increased by 19% to R362 million on higher debt, which was mainly incurred for the acquisition of
Lehnkering, that was effective from 2 January 2012. Despite the higher net finance costs, interest covered by operating
profit remains healthy at 8,1 times (2011: 8,6 times).
The effective tax rate of 28% is in line with the statutory rate.
Income from associates showed a positive contribution of R3 million compared to a loss of R17 million in the prior
period. MixTelematics, in which Imperial holds a 28% interest, performed well and contributed R17 million (2011: R9
million). This was offset by the contribution from smaller associates, which declined from the prior year. Ukhamba was
negatively impacted by a higher finance charge due to the debt incurred for the distributions to its shareholders.
Balance sheet
Total assets increased by 20% to R48 billion (2011: R40 billion) mainly due to the acquisition of Lehnkering, which
was effective 2 January 2012, organic growth and expansion of existing businesses.
Intangible assets rose to R4,4 billion from R1,9 billion at December 2011 again primarily as a result of the
Lehnkering acquisition.
Net debt to equity (excluding preference shares) at 52% was higher than the prior year (39%) because of the Lehnkering
acquisition. It was also higher than at the end of June 2012 (39%) due to the share buyback of R474 million and
seasonal impacts on our working capital that occur in December. The net debt level is below the target gearing range of 60% to
80% and leaves significant room for further expansion of the group. The groups liquidity position is strong with R3,5
billion in unutilised facilities (excluding asset-based finance facilities).
Net working capital decreased by R374 million compared to December 2011 as a consequence of NACs net working capital
being classified as assets held for sale in the current period and inventories at our Distributorships division not
being fully replenished by period end. Overall, working capital was well managed during the period with the net working
capital turn improving to 8,0 times compared to 6,6 times after adjusting for the NAC asset reclassification.
Shareholders equity increased due to higher retained income and the weakening of the Rand which resulted in gains on
the foreign currency translation reserve accounted for in the statement of comprehensive income. This was offset by
dividends paid and by R474 million utilised for the repurchase and cancellation of 2,6 million shares in the open market.
New business written on service, maintenance and warranty contracts generated by the Financial Services division, on
the back of strong vehicle sales, resulted in insurance, investment, maintenance and warranty contracts growing to R3,6
billion which is up by 29% (2011: R2,8 billion).
Cash flow
Cash generated by operations before capital expenditure on rental assets was 54% higher than the prior period at R2,8
billion. After financing costs, tax payments and capital expenditure on rental assets, net cash flow from operating
activities increased to R1,1 billion, up from R170 million in the prior period. This was mainly due to a lower absorption of
cash by working capital compared to the prior period. Capital expenditure on rental assets was lower than in the
corresponding period in 2011.
Net replacement and expansion capital expenditure excluding car rental vehicles, was slightly higher than the prior
period. A net R41 million was spent on acquisitions and R79 million was received for businesses disposed of during the
period.
Cash flows during the six-month period from investing activities were impacted by our insurance business increasing
its exposure to equity markets which benefited the group through good equity returns.
Under financing activities, 2,6 million shares worth R474 million were repurchased from the open market.
Business conditions in Imperials markets
Although trading conditions in the automotive retail market continue to be favourable, growth is slowing down. Reduced
disposable income, a weaker currency and the high base created by strong volume growth in the last three years all
present potential headwinds for growth. The new vehicle market grew by 9% for calendar year 2012 compared to 16% in 2011.
Demand has been underpinned by low interest rates, low vehicle price inflation and increased appetite by banks for vehicle
finance. The commercial vehicle market, while reversing its negative trend, lagged the upturn in passenger vehicle
sales. The used car market is improving and expected new vehicle price increases could see further improvements, as the
price gap between new and used vehicles widens.
Industrial action impacted the group over the period and could affect the group from time to time. Supply from Korea
was disrupted by strike action and shortened work hours at the Hyundai and Kia plants. In South Africa, the national
transport industry strike in the last week of September and first two weeks of October significantly curtailed our ability
to service our South African transport clients for more than three weeks.
In SA Logistics, in addition to industrial action, trading was characterised by difficult market conditions where
volumes and price increases remained under continued pressure, especially within our manufacturing customer base.
The slowing German economy, especially in the second quarter, impacted our businesses negatively. Volumes in our
customer base, particularly in the steel industry were under pressure. Inland shipping volumes across the industry in Germany
declined compared to the previous year.
Lower volumes in the international and local leisure car rental segments persist and competition remains fierce in
this industry. The tourism business continues to operate under challenging market conditions with low inbound group travel
volumes and an oversupply of coaches in the market.
Insurance underwriting conditions in the short-term industry were more challenging particularly due to a number of
severe hail storms over the Gauteng area. Investment markets were more favourable as a result of a better performing equity
market.
The current growth cycle in the motor industry favours our Financial Services division. Strong vehicle sales enable us
to generate high volumes of new contracts which provide a valuable underpin to our earnings.
Vehicle sales
In South Africa, the group sold 60 997 new and 32 590 used vehicles in the period, respectively 6% and 10% more than
the prior period. The national vehicle market grew by 9% year on year for the six-month period to December 2012,
according to NAAMSA.
The Australian and United Kingdom operations sold 5 446 new vehicles, which was in line with the prior year, and 2 215
used vehicles, which was 6% lower.
Acquisitions and disposals during the period
Acquisitions during the period consisted of
- Midas acquiring 80% of Afintapart SA (Pty) Limited, a commercial vehicle parts distributor;
- 60% of LTS Kenzam (Pty) Limited, a logistics business that distributes bituminous products throughout southern Africa
to sites in SA and cross-border to Mozambique, Malawi, Zimbabwe, Zambia, Botswana, Democratic Republic of Congo,
Lesotho, Swaziland as well as Namibia; and
- Effective January 2013, 100% of the pharmaceutical distribution and healthcare supply chain services business
conducted by RTT Group (Pty) Limited (RTT Health Sciences) was acquired. The business is now branded Imperial Health Sciences
and is one of Africas leading pharmaceutical distributor and healthcare supply chain service providers. Imperial Health
Sciences specialises in multi-channel solutions for delivering essential medicines and consumer health products in South
Africa as well as to developing markets across the African continent, including inter alia, Namibia, Botswana,
Mozambique, Zimbabwe, Zambia, Kenya, Tanzania, Malawi, Uganda, Ethiopia, Rwanda, Ghana, Côte dIvoire and Nigeria.
The group continues to focus on the strategic fit and returns of its businesses. As a result, the following disposals
were made:
- Our 60% of Megafreight, a freight forwarding business; and
- On 15 February 2013, our 62% of NAC, the aircraft distributor and aviation services business was sold, releasing R433
million of capital.
Logistics
Southern African Logistics
R million H1 2013 H1 2012 Change H2 2012 Change
% % on H2
2012
Revenue 8 677 8 311 4,4 8 146 6,5
Operating profit 400 513 (22,0) 397 0,8
Operating margin % 4,6 6,2 4,9
The division faced a challenging trading environment and a transport workers strike in September and October had a
material impact on profitability across all South African business units. Volumes and rates in our customer base,
especially those involved in manufacturing were depressed. The Africa division, including CIC, which is involved in the
distribution of FMCG products into many African markets, however, performed well and has good prospects. If the impact of the
strike is eliminated, the division would have been able to maintain operating margins when compared to the prior period.
The Transport and Warehousing business, which services the manufacturing, mining, commodities and construction
industries, was under pressure as a result of the industrial action and lower volumes in tough trading conditions.
Although also impacted by the strike, the Specialised Freight business has performed well. The LTS Kenzam Bulk
Transport acquisition was concluded and the operation was integrated into this division with effect from 1 October 2012. The
business was successful in obtaining significant new contract gains during the period.
The Consumer Logistics business was negatively impacted by weak volumes, mainly in the manufacturing client base. This
affected all businesses in the supply chain, including our warehousing and distribution operations. The Cold Chain
continues to impact results negatively as difficult trading conditions persist. Despite a difficult trading environment, the
business was successful in gaining some significant new contracts and will benefit from the inclusion of the FMCG and
South African consumer healthcare components of the new Imperial Health Sciences business.
The Integration Services business continues to make a valuable contribution to the intellectual capital of the group,
specifically by assisting other businesses to expand and integrate client solutions and offer value added services to
their customers. Megafreight was only included for two months versus six months in the prior period as we disposed of our
shareholding during the period.
In the Africa business, the CIC operation continues to grow and perform well. Transport volumes were also better and
the business was less affected by the transport workers strike. The business increased its revenue and operating profit
by 24% and 22% respectively. The rest of Africa component of the new Imperial Health Sciences business will contribute
significantly to our distribution footprint in Africa and will lead to further opportunities to grow the business across
the continent.
The net investment in the fleet is lower than the prior period, as significant investment was made in the prior year,
in line with the scheduled replacement cycle. We incurred gross capital expenditure of R579 million.
International Logistics
International Logistics (EUR)
EUR million H1 2013 H1 2012 Change H2 2012 Change
% % on H2
2012
Revenue 669 397 68,5 690 (3,0)
Operating profit 29 20 45,0 39 (25,6)
Operating margin % 4,3 5,0 5,7
International Logistics (ZAR)
R million H1 2013 H1 2012 Change H2 2012 Change
% % on H2
2012
Revenue 7 211 4 149 73,8 7 088 1,7
Operating profit 307 202 52,0 396 (22,5)
Operating margin % 4,3 4,9 5,6
The prior period is not directly comparable as the acquisition of Lehnkering was effective on 2 January 2012. The
division faced tougher trading conditions as the result of a slowing German economy, especially late in the second quarter.
Volumes became generally depressed across most industries but the steel industry was particularly poor. Transport
volumes across the German inland shipping industry were 6% down.
The groups shipping activities, including those of Lehnkering, have been integrated into one unit, namely the
Imperial Shipping Group. The division experienced difficult trading conditions with dry bulk volumes significantly lower than
that of the prior period. Freight rates are expected to weaken further. To counter this, we are enhancing business
processes and optimising our fleet of contracted vessels. Gas shipping, which was acquired as part of Lehnkering achieved good
results assisted by healthy volumes.
Lehnkering, which after restructuring of our operations, houses all our non-shipping chemical industry logistics
activities, including warehousing, road transport and chemical manufacturing services, experienced normal seasonally low
activity levels and was impacted by some once-off costs. The agrochemicals industry typically generates higher revenues in
the second half of our financial year.
Panopa, which provides parts distribution and in-plant logistics services to automotive, machinery and steel
manufacturers, performed well despite a depressed steel market and the slowing European automotive industry. Contract gains and
renewals were the main drivers of good performance. The integration of Lehnkerings steel and retail contract logistics
divisions into Panopa was successfully completed and is performing in line with expectations.
Neska, the terminal operator, was affected by one client being placed under administration and another having a fire
which disrupted operations at our container terminal in Krefeld. The remaining terminals performed satisfactorily.
Gross capital expenditure of R150 million was incurred, in line with the prior year.
Car Rental and Tourism
R million H1 2013 H1 2012 Change H2 2012 Change
% % on H2
2012
Revenue 1 924 1 939 (0,8) 1 862 3,3
Operating profit 183 210 (12,9) 170 7,6
Operating margin % 9,5 10,8 9,1
Trading conditions in the Car Rental business remain tough and the performance was below expectation. International
inbound and leisure rental rates and volumes remain a concern in an extremely competitive market. Revenue growth was flat
in the Car Rental business as revenue days declined 2% with revenue per day increasing by only 2%. The revenue per day
was impacted by the growth in the lower rate replacement business. Revenue per day grew by 4% if the replacement business
is excluded.
Utilisation reduced from 70% to 69% due to the increase in the number of vehicles at the panelshops following the
damage caused by hail storms. The average rental fleet size was in line with the prior year.
Operating margins were under pressure as costs increased ahead of revenue. Accident and theft costs were significantly
higher in the Car Rental business and the disappointing performance of the Tourism division also contributed to the
decline in operating margins.
Retail unit sales at Auto Pedigree were higher and the business improved its performance significantly from the prior
period. The stock level and stock profile at Auto Pedigree have also improved.
The panel business performed better than the prior year. This was due to management actions taken and improved
activity levels, assisted by recent hail storms. As a result, the panelshops were running at full capacity.
Our tourism subdivision performance was disappointing as inbound group travel demand continues to be slow and the
tough trading conditions persist. This continues to affect the profitability of our Springbok Atlas tourism operations.
Distributorships
R million H1 2013 H1 2012 Change H2 2012 Change
% % on H2
2012
Revenue 15 843 13 590 16,6 14 728 7,6
Operating profit 1 316 1 162 13,3 1 294 1,7
Operating margin % 8,3 8,6 8,8
The Distributorships division performed well considering the negative impact of the stock availability constraints due
to the industrial action experienced by our principals in Korea. Excluding the Australian operation, new vehicle
registrations as reported to NAAMSA by Associated Motor Holdings (AMH) (including TATA) and Amalgamated Automobile
Distributors (AAD) were 6% higher, compared to a market increase of 9%. Volume growth in used car sales was better and strong
growth was achieved in annuity revenue streams generated from after-sales parts and service. The growing vehicle parc of our
imported brands will secure good future levels of after-market activity for our dealerships, which are performing
better.
Our Mitsubishi vehicle distribution business has been in operation for approximately 18 months and the brand is being
reestablished in key market segments notwithstanding a challenging currency situation relative to the Yen.
Vehicle distribution margins declined as a result of the impact of a weaker Rand exchange rate, and stock shortages
which caused a suboptimal sales mix. Forward exchange contracts enabled us to manage the impact of the very volatile
currency throughout the period.
In Australia, new and used retail unit sales were down 3% and 10% respectively. The dealerships in Australia had to
realign their business away from selling to rental companies and selling more to retail, which impacted volumes
negatively.
In the Auto Parts division, Midas and the engine parts businesses performed satisfactorily in a sluggish market. In
line with the groups strategy to extend into other areas of parts distribution, 80% of Afintapart SA (Pty) Limited, a
commercial vehicle parts distributor, was acquired by Midas during the period.
The Goscor Group continues to make a good contribution, trading ahead of expectations. Crown and Doosan increased
market share while maintaining a strong order book.
The contribution from businesses that augment and are allied to our motor related activities, which include Car Find,
Bid 4 Cars and the recently acquired Datadot, continue to grow well.
NACs results were included for the period, as the disposal was only concluded after the reporting period. The
business performed in line with the prior year which was satisfactory, as aircraft sales were subdued. Demand for chartering
and flight services operations into Africa were, however, strong and showed growth.
Automotive Retail
R million H1 2013 H1 2012 Change H2 2012 Change
% % on H2
2012
Revenue 10 926 9 877 10,6 9 683 12,8
Operating profit 299 261 14,6 312 (4,2)
Operating margin % 2,7 2,6 3,2
The division performed well and produced good growth in operating profit for the year. Growth in new vehicle retail
sales units from South African operations was 9% in line with the industry. Used vehicle sales also improved compared to
the prior year.
The commercial vehicle market in SA continues to lag the increase in passenger cars, producing a rise of 5% in unit
sales across all brands.
Growth in after sales service revenue was slow but parts revenue has improved well for the period as we continue to
focus on growing our revenue streams that arise out of after sales activities. The significant increase in new car sales
over the last few years bodes well for the future parts and services revenue of the division.
In the UK, the truck dealerships grew in a depressed market. The strategy to add an LCV business to our existing
footprint was successful and contributed positively.
Beekman Canopies was a good performer with sales up on last year. Although the operating profit improved, sales
volumes at Jurgens Ci were flat due to a caravan market suffering from lower consumer spending on leisure activities.
Financial Services
R million Change H2 2012 Change
H1 2013 H1 2012 % % on H2
2012
Insurance
Revenue 1 659 1 481 12,0 1 631 1,7
Operating profit 270 213 26,8 206 31,1
Adjusted investment income 151 80 88,8 95 58,9
Adjusted underwriting result 119 133 (10,5) 111 7,2
Operating margin % 16,3 14,4 12,6
Underwriting margin % 7,2 9,0 6,8
Other financial services
Revenue 506 352 43,8 535 (5,4)
Operating profit 221 131 68,7 225 (1,8)
Operating margin % 43,7 37,2 42,1
Total financial services
Revenue 2 165 1 833 18,1 2 166
Operating profit 491 344 42,7 431 13,9
Operating margin % 22,7 18,8 19,9
Note:
The profit before tax of an insurance business is made up of the underwriting result and investment return.
Policyholder investment returns include investment income and fair value gains for the benefit of policyholders. The above table
reflects a reallocation of policyholder investment returns from investment income to the underwriting result. The
adjusted underwriting result and investment return more accurately reflect the performance from a shareholder point of view.
The Financial Services division had an excellent six months.
Investment returns were significantly higher than the prior year as a result of a larger exposure to equity markets,
which performed favourably during the period. Management increased Regents exposure to equity markets from the prior
year while maintaining conservative management of the portfolio.
Regents underwriting result declined by 11% from R133 million to R119 million, primarily driven by a deteriorating
claims experience in the short-term motor comprehensive business impacted by the severe hail storms during the period. The
Broker division at Regent also underperformed. In contrast, Regents other significant product lines in the short-term
insurance business (Adcover, Paintech and Warranties) delivered excellent results and showed healthy growth from the
prior year.
Regent Life also performed well, with gross written premiums up 20% for the year.
Botswana and Lesotho continue to grow and the exposure to other African countries is becoming a much more meaningful
contributor to the division.
Other Financial Services, mainly represented by LiquidCapital, performed well. The rise in the number of new
maintenance plans written in the strong new vehicle market provides a valuable annuity earnings underpin to our future profits.
The advances book generated through our joint ventures with financial institutions has grown encouragingly, as have
the funds held under service and maintenance plans, warranties and roadside assistance.
The release from the funds created on the sale of service and maintenance plans was significantly higher than the
prior year due to a change in accounting estimate which was implemented in the second half of the previous financial year.
Volumes in Imperial Fleet Management continue improving as we gain new contracts. Ariva, a private leasing joint
venture with JD Group targeting the entry-level car market, is performing in line with expectations and presents growth
potential in a largely untapped market.
Skills development and Corporate Social Investment
Building a robust internal skills pipeline
We recognise that skilled people offer the business a powerful competitive advantage, particularly in a global
environment of critical skills shortages, and skills development is therefore a key business driver across Imperials many
diverse operations.
Skills development delivers a range of other sustainable benefits in areas such as employment equity and
transformation, staff retention and employee satisfaction. Among the many new initiatives launched is the expansion of our artisan
and technician training centres to include two new facilities, which will increase our training capacity. Our Car Rental
division also opened its new Europcar Learning Centre, which will host the training of its employees.
Investing in education
The development of a sustainable skills pipeline in South Africa requires investment in the education of the next
generation.
To assist in achieving this objective, Imperial Holdings together with its empowerment partner, Ukhamba, has made a
strategic investment in the upliftment of education facilities and teaching in eight schools in the greater Gauteng area
in which we operate. This is carried out through the Imperial and Ukhamba Community Development Trust, to which each
division contributes on an annual basis.
The Trust plays a hands-on role in uplifting education in the beneficiary schools, ensuring that learners have
sufficient stationery and that educators have access to suitable teaching resources and materials, receive curriculum training
and are assisted by mentors. The Trust has assisted in establishing libraries at some of these schools. In addition,
learners are exposed to a range of cultural, sporting and extracurricular activities. The Trust touches the lives of
approximately 9 800 children.
Leading corporate citizenship initiatives
Imperial also places strategic emphasis on establishing itself as a leading corporate citizen. The IMPERIAL I-Pledge
campaign is our flagship project and has recorded 121 000 pledges from individuals in South Africa. It seeks to promote
safer, friendlier roads by encouraging South Africans to commit to safer driving practices. Fewer road accidents are a
key goal for the Imperial group. Current initiatives highlight the vulnerability of children on our roads and projects
launched during this period were our car seat campaign which collected 750 car seats for refurbishment and distribution, as
well as our scholar patrol initiative which to date has refurbished equipment for 100 school scholar patrols and
reached over 61 000 primary school learners in road safety awareness.
Strategic intentions
Our strategic focus remains on generating higher returns on capital while investing in growing the business in existing
and related industries and geographies.
The development of African economies and the world-wide trend towards outsourcing offer good growth potential in the
logistics industry, both in Africa and abroad. Imperial is expanding its footprint in this industry as illustrated by
recent acquisitions in the SA Logistics, Rest of Africa and International Logistics businesses. Our Rest of Africa
Logistics business will place its emphasis on consumer logistics and distribution growth opportunities while also ensuring that
it is a strong transport operator on certain key corridors of the continent.
We continue to optimise the value chain in our motor vehicle businesses. Our experience in this field stands us in
good stead and will enable us to earn increasing annuity income streams as the vehicle parc of brands we distribute
exclusively grows, and we refine the use of technology and market intelligence.
The distribution of products which carry strong brands in the automotive and industrial markets remain a core focus.
We continually seek and investigate expansion opportunities into potential new areas of distribution, including new
regions.
Ordinary dividend
An interim ordinary dividend of 380 cents per share, reflecting a 27% increase (2012: 300 cents per share), has been
declared.
Prospects
The group holds leading positions in its main markets and is well positioned to take advantage of growth opportunities
as they arise.
Trading conditions in South African Logistics will remain challenging. Pressure on the mining, construction and
manufacturing client base persists. The market has also become more competitive. The acquisition of RTT Health Sciences will
have a positive impact on results in the second half and the expansion into Africa will continue to gain momentum. The
fundamentals of the logistics industry are good and given Imperials infrastructure and network, it is ideally positioned
to capitalise on these growth opportunities and gain more business.
We expect the performance of our International Logistics division, which comes off a high base, to be impacted by a
slowing German economy. The Lehnkering acquisition and the favourable terms of the financing arrangements will have a
positive impact on results as it will make a contribution for the full year in 2013 compared to six months in the previous
year. Our businesses remain well positioned in attractive niches in the logistics industry in Germany and acquisitions
could be a further growth driver.
Conditions in the car rental and tourism industries will continue to be challenging. Some improvement can be expected
in the used car market as the price differential widens between used and new cars.
The outlook for new vehicle sales is for a slower rate of growth. Reduced disposable income, a weaker currency and the
high base created by strong volume gains in the last three years all present potential headwinds for growth. While our
inventory position has improved post the impact of the strike in Korea, product supply remains tight but stable. We
will, however, continue benefiting from the growth in parts and service revenue streams as the car parc of our imported
brands increases further.
The Autoparts business is not affected directly by new vehicle sales and should continue to perform solidly as
initiatives to expand its product range and geographic footprint bear fruit despite the increasingly competitive market. Goscor
will perform well as it capitalises on a strong order book, grows its rental business and after sales maintenance
opportunities.
While short-term insurance underwriting conditions and equity markets are unpredictable, other earnings in the
Financial Services division should be robust as it generates increasing annuity income due to new business being placed on its
book. The investment portfolio continues to be conservatively managed despite our increased exposure to equities.
Imperials balance sheet remains strong despite significant organic and acquisitive growth in the recent past. As a
result, the group is well positioned to take advantage of attractive organic growth and acquisition opportunities as they
arise.
Given current market conditions, we expect subdued growth in the 2013 financial year.
By order of the board
TS Gcabashe
Chairman
HR Brody
Chief Executive
AH Mahomed
Financial Director
Declaration of dividends for the six months ended 31 December 2012
Ordinary shareholders
Notice is hereby given that a gross ordinary dividend in an amount of 380 cents per ordinary share has been declared
payable, by the board of Imperial, to holders of ordinary shares.
The ordinary dividend will be subject to a local dividend tax rate of 15%. The companys STC credits have been fully
utilised and consequently there are no further credits available to reduce the withholding tax payable. The net ordinary
dividend, to those shareholders who are not exempt from paying dividend tax, is therefore 323 cents per share. The number
of ordinary shares in issue as at the declaration date is 209 964 264 shares.
Preference shareholders
Notice is hereby given that a gross preference dividend of 354,2979 cents per preference share has been declared
payable, by the board of Imperial, to holders of non-redeemable, non-participating preference shares.
The preference dividend will be subject to a local dividend tax rate of 15%. The companys STC credits have been fully
utilised and consequently there are no further credits available to reduce the withholding tax payable.The net
preference dividend, to those shareholders who are not exempt from paying dividend tax, is therefore 301,15322 cents per share.
The number of preference shares in issue as at the declaration date is 4 540 041 shares.
The company has determined the following salient dates for the payment of the preference dividend and ordinary
dividend:
2013
Last day for preference shares and ordinary shares respectively to trade cum-preference dividend and cum-ordinary dividend Wednesday, 20 March
Preference and ordinary shares commence trading ex-preference dividend and ex-ordinary dividend respectively Friday, 22 March
Record date Thursday, 28 March
Payment date Tuesday, 2 April
The company's income tax number is 9825778719.
Share certificates may not be dematerialised/rematerialised between Friday, 22 March 2013 and Thursday, 28 March 2013,
both days inclusive.
On Tuesday, 2 April 2013, amounts due in respect of the preference dividend and the ordinary dividend will be
electronically transferred to the bank accounts of certificated shareholders that utilise this facility. In respect of those who
do not, cheques dated 2 April 2013 will be posted on or about that date. Shareholders who have dematerialised their
shares will have their accounts, held at their CSDP or broker, credited on Tuesday, 2 April 2013.
On behalf of the board
RA Venter
Group Company Secretary
26 February 2013
Condensed consolidated income statement
for the six months ended % Unaudited Unaudited Audited
change December December June
2012 2011 2012
Rm Rm Rm
Revenue 18 45 262 38 385 80 830
Net operating expenses (41 310) (34 930) (73 402)
Profit from operations before depreciation and recoupments 3 952 3 455 7 428
Depreciation, amortisation, impairments and recoupments (1 013) (834) (1 790)
Operating profit 12 2 939 2 621 5 638
Recoupments from sale of properties, net of impairments 19 (38) (32)
Amortisation of intangibles arising on business combinations (110) (13) (128)
Foreign exchange gains 47 9 16
Fair value losses on foreign exchange derivatives (42) (9) (26)
Business acquisition costs (5) (53) (51)
Realised gain on sale of available-for-sale investment 10
Exceptional (loss) profit (9) 3 (12)
Profit before net financing cost and associates 13 2 849 2 520 5 405
Net finance cost including fair value gains and losses (362) (305) (681)
Income from associates and joint ventures 3 (17) 46
Profit before tax 13 2 490 2 198 4 770
Income tax expense (703) (664) (1 382)
Net profit for the period 1 787 1 534 3 388
Net profit attributable to:
Owners of Imperial 1 579 1 350 2 980
Non-controlling interests 208 184 408
1 787 1 534 3 388
Earnings per share (cents)
Basic 17 821 703 1 552
Diluted 18 786 666 1 474
Condensed consolidated statement of comprehensive income
for the six months ended Unaudited Unaudited Audited
December December June
2012 2011 2012
Rm Rm Rm
Net profit for the period 1 787 1 534 3 388
Other comprehensive income to be subsequently reclassified to profit or loss 78 770 653
Exchange gains arising on translation of foreign operations 251 199 210
Movement in valuation reserves 10 19
Reclassification of gain on sale of available-for-sale investments (10) (23) (19)
Movement in hedge accounting reserves (175) 576 409
Share of associates and joint ventures hedging reserves (3) 18 18
Income tax relating to components of other comprehensive income 5 16
Total comprehensive income for the period 1 865 2 304 4 041
Total comprehensive income attributable to:
Owners of Imperial 1 653 2 040 3 578
Non-controlling interests 212 264 463
1 865 2 304 4 041
Earnings per share information
for the six months ended % Unaudited Unaudited Audited
change December December June
2012 2011 2012
Rm Rm Rm
Headline earnings reconciliation
Earnings basic 1 579 1 350 2 980
Saving of finance costs by associate on sale of Imperial shares 20 21
Earnings diluted 1 599 1 350 3 001
Profit on disposal of assets (IAS 16, IAS 38) (29) (19) (29)
Impairment of assets (IAS 36) 1 46 49
Exceptional loss (profit) 9 (3) 12
Exceptional loss included in income from associates and joint ventures 12 48 19
Realised gain on sale of available-for-sale investments (IAS 39) (10) (23) (19)
Tax effects of remeasurements 27 3 9
Non-controlling interests in remeasurements 6 (6) (14)
Headline earnings diluted 1 615 1 396 3 028
Saving of finance costs by associate on sale of Imperial shares (20) (21)
Headline earnings basic 1 595 1 396 3 007
Earnings per share (cents)
Basic 17 821 703 1 552
Diluted 18 786 666 1 474
Headline earnings per share (cents)
Basic 14 829 727 1 566
Diluted 15 794 688 1 487
Core earnings reconciliation
Headline earnings basic 1 595 1 396 3 007
Saving of finance costs by associate on sale of Imperial shares 20 21
Headline earnings diluted 1 615 1 396 3 028
Amortisation of intangibles arising on business combinations 110 13 128
Business acquisition costs 5 53 51
Headline earnings from discontinued operations (2) (9) (34)
Core earnings adjustments included in income from associates and joint ventures 2
CGT on post-acquisition earnings of associates disposed 2 2
Tax effects of core earnings adjustments (34) (3) (47)
Non-controlling interests in core earnings adjustments 10
Core earnings diluted 1 696 1 452 3 138
Saving of finance costs by associate on sale of Imperial shares (20) (21)
Core earnings basic 1 676 1 452 3 117
Core earnings per share (cents)
Basic 15 872 756 1 623
Diluted 16 834 716 1 541
Additional information
Net asset value per share (cents) 10 7 768 7 052 7 479
Dividend per ordinary share (cents) 27 380 300 680
Number of ordinary shares in issue (million)
total shares 210,0 209,8 209,8
net of shares repurchased 196,2 196,1 196,1
weighted average for basic 192,3 192,0 192,0
weighted average for diluted 203,4 202,8 203,6
Number of other shares in issue (million)
Deferred ordinary shares 13,0 14,1 14,1
Details of net finance cost and exceptional (loss) profit
for the six months ended Unaudited Unaudited Audited
December December June
2012 2011 2012
Rm Rm Rm
Net finance cost
Net interest paid (362) (305) (681)
Foreign exchange loss on monetary items (122) (106) (88)
Fair value gain on interest-rate swap instruments 122 106 88
(362) (305) (681)
Exceptional (loss) profit
Impairment of goodwill (31) (123)
Net profit (loss) on disposal and rationalisation of investments in subsidiaries, associates and joint ventures 8 (1)
Remeasurement on disposal groups and discontinued operations (9) 26 112
(9) 3 (12)
Condensed consolidated statement of financial position
at 31 December Unaudited Unaudited Audited
December December June
2012 2011 2012
Rm Rm Rm
ASSETS
Intangible assets 4 420 1 921 4 234
Investments in associates and joint ventures 902 759 889
Property, plant and equipment 8 545 6 970 8 080
Transport fleet 4 399 3 999 4 336
Vehicles for hire 2 688 2 587 2 321
Deferred tax assets 1 034 766 930
Investments and loans 3 236 2 604 2 433
Non-current financial assets 254 259 242
Inventories 8 851 9 295 9 218
Tax in advance 295 192 195
Trade and other receivables 10 202 8 860 9 275
Cash resources 2 590 2 203 3 545
Assets classified as held for sale 630
Total assets 48 046 40 415 45 698
EQUITY AND LIABILITIES
Capital and reserves
Share capital and share premium 333 22 22
Shares repurchased (227) (220) (220)
Other reserves 433 818 503
Retained earnings 14 701 13 209 14 361
Attributable to owners of Imperial 15 240 13 829 14 666
Non-controlling interests 1 254 1 125 1 223
Total equity 16 494 14 954 15 889
Liabilities
Non-redeemable, non-participating preference shares 441 441 441
Retirement benefit obligations 643 250 590
Interest-bearing borrowings 11 088 8 099 9 747
Insurance, investment, maintenance and warranty contracts 3 633 2 825 3 222
Deferred tax liabilities 1 266 548 1 107
Non-current financial liabilities 274 243 348
Trade and other payables and provisions 13 467 12 195 13 886
Current tax liabilities 543 860 468
Liabilities directly associated with assets classified as held for sale 197
Total liabilities 31 552 25 461 29 809
Total equity and liabilities 48 046 40 415 45 698
Capital commitments 483 437 1 112
Contingent liabilities 208 57 46
Condensed consolidated statement of cash flows
for the six months ended Unaudited Unaudited Audited
December December June
2012 2011 2012
Rm Rm Rm
Cash flows from operating activities
Cash generated by operations before movements in net working capital 4 285 3 842 8 198
Movements in net working capital (1 489) (2 021) (758)
Cash generated by operations before capital expenditure on rental assets 2 796 1 821 7 440
Expansion capital expenditure rental assets (439) (671) (352)
Net replacement capital expenditure rental assets (296) (174) (505)
Expenditure (1 188) (1 022) (2 120)
Proceeds 892 848 1 615
Cash generated by operations 2 061 976 6 583
Net finance costs paid (362) (305) (681)
Tax paid (598) (501) (1 522)
1 101 170 4 380
Cash flows from investing activities
Net disposal (acquisition) of subsidiaries and businesses 38 (77) (1 868)
Expansion capital expenditure excluding rental assets (597) (346) (773)
Net replacement capital expenditure excluding rental assets (531) (655) (962)
Dividend received from Ukhamba Holdings (Pty) Limited 387 387
Net movement in other associates and joint ventures (25) (37) (94)
Net movement in investments, loans and non-current financial instruments (854) (173) (63)
(1 969) (901) (3 373)
Cash flows from financing activities*
Hedge cost premium paid (8) (105)
Repurchase of ordinary shares (7)
Ordinary shares repurchased and cancelled (474)
Repayment of IC 02 corporate bond (522)
Proceeds on the Euro-syndicated bank term loan raised 2 482
Net increase (decrease) in interest-bearing borrowings 1 190 89 (1 432)
Change in non-controlling interests 5 (137) (177)
Dividends paid (877) (620) (1 350)
(171) (668) (1 104)
Net decrease in cash resources (1 039) (1 399) (97)
* There has been no cash flow for the shares issued under the share schemes.
Condensed consolidated statement of changes in equity
for the six months ended Share Shares re- Other Retained Attribu- Non- Total
capital purchased reserves earnings table to controlling equity
and Rm Rm Rm owners of interests Rm
share Imperial Rm
premium Rm
Rm
Balance at 30 June 2011 Audited 9 (220) 111 12 073 11 973 1 043 13 016
Total comprehensive income for the period 690 1 350 2 040 264 2 304
Movement in statutory reserves 4 (4)
Share-based equity reserve transferred to retained earnings on vesting 8 (8)
Share-based equity reserve utilisation including hedging cost (12) (12) (12)
Share-based equity reserve charged to the income statement 63 63 63
Issue of 115 060 ordinary shares 13 13 13
Ordinary dividends paid (507) (507) (507)
Dividend declared by Ukhamba Holdings (Pty) Limited on unrecognised fair value adjustments on Imperial shares 305 305 305
Non-controlling interests arising on business combinations (7) (7)
Net decrease in non-controlling interests (46) (46) (62) (108)
Non-controlling interests share of dividends (113) (113)
Balance at 31 December 2011 Unaudited 22 (220) 818 13 209 13 829 1 125 14 954
Total comprehensive income for the period (92) 1 630 1 538 199 1 737
Movement in statutory reserves (137) 137
Share-based equity reserve transferred to retained earnings on vesting 31 (31)
Share-based equity reserve utilisation including hedging cost (124) (124) (2) (126)
Share-based equity reserve charged to the income statement 44 44 5 49
Ordinary dividends paid (584) (584) (584)
Non-controlling interests arising on business combinations, net of disposals 43 43
Net decrease in non-controlling interests (37) (37) (1) (38)
Non-controlling interests share of dividends (146) (146)
Balance at 30 June 2012 Audited 22 (220) 503 14 361 14 666 1 223 15 889
Total comprehensive income for the period 74 1 579 1 653 212 1 865
Movement in statutory reserves 3 (3)
Share-based equity reserve transferred to retained earnings on vesting 19 (19)
Share-based equity reserve utilisation including hedging cost (222) (222) (11) (233)
Share-based equity reserve charged to the income statement 57 57 3 60
Ordinary dividends paid (743) (743) (743)
Issue of 1 620 884 ordinary shares 311 311 311
Cancellation of 2 631 559 ordinary shares repurchased from the open market (474) (474) (474)
39 000 ordinary shares acquired by a subsidiary (7) (7) (7)
Non-controlling interests disposed, net of acquisitions (45) (45)
Net increase in non-controlling interests (1) (1) 6 5
Non-controlling interests share of dividends (134) (134)
Balance at 31 December 2012 Unaudited 333 (227) 433 14 701 15 240 1 254 16 494
Notes to the condensed consolidated financial statements
Basis of preparation
The condensed consolidated financial statements have been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS) and its interpretations adopted by the International
Accounting Standards Board (IASB) in issue and effective for the Group at 31 December 2012 and the AC 500 standards issued by the Accounting Practices Board or its successor. The results are presented in accordance with IAS 34 Interim
Financial Reporting and comply with the Listings Requirements of the JSE Limited and the Companies Act of South Africa, 2008. These financial statements do not include all the information required for full annual financial statements and
should be read in conjunction with the consolidated financial statements as at and for the year ended 30 June 2012.
These condensed consolidated financial statements have not been reviewed or audited by the Groups auditors.
These condensed consolidated financial statements have been prepared under the supervision of R Mumford, CA(SA) and were approved by the board of directors on 26 February 2013.
Accounting policies
The accounting policies adopted and methods of computation used in the preparation of the condensed consolidated financial statements are in accordance with IFRS and are consistent with those of the annual financial statements for the
year ended 30 June 2012 except where the Group has adopted new or revised accounting standards.
Revised accounting standards/circulars
The Group adopted amendments to the following accounting standards and interpretations that became applicable during the current reporting period:
IAS 1 Presentation of Financial Statements Amendments to the presentation of other comprehensive income.
IAS 12 Taxes Deferred Tax: recovery of underlying assets.
IAS 34 Interim Financial Reporting Disclosure of significant events and transactions.
The group also adopted Circular 3/2012 - Headline Earnings as issued by the South African Institute of Chartered Accountants (SAICA).
These amendments had no significant impact on the groups accounting policies and methods of computation.
Standards and interpretations issued but not yet effective
Following the withdrawal of Statements of Generally Accepted Accounting Practice for years beginning on or after 1 December 2012, the Accounting Practices Committee (APC) has issued the relevant AC 500 series of Statement of Generally
Accepted Accounting Practice as a Financial Reporting Guide (FRG). This change will become applicable to the Group in the 2014 financial year with no impact on the existing accounting policies and methods of computation.
For a list and impact of other standards and interpretations that will become applicable to the Group in future reporting periods please refer to note 2 of the Groups 2012 annual financial statements.
Core earnings
The Group reports a core earnings number which excludes significant non-operational items of income and expenditure from reported headline earnings.
Discontinued operations
Discontinued operations are immaterial to the Group. Their results are included in continuing operations in the income statement and under Head Office and Eliminations on the segment report. The impact on the trading result is insignificant.
Changes to the composition of the Group
Acquisitions
For details about the acquisitions please refer to the business combinations section on page 17.
Disposals
The group disposed of its 60% interest in Megafreight for R80 million in September 2012.
Disposal group
The sale of NAC became highly probable in September 2012. As a result, assets of R630 million and liabilities of R197 million are shown as held for sale on the statement of financial position.
The assets and liabilities were measured in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.
Foreign exchange rates December December June
2012 2011 2012
The following major rates of exchange were used:
SA Rand:European Union
closing 11,21 10,52 10,39
average 10,79 10,47 10,38
SA Rand:US Dollar
closing 8,50 8,13 8,20
average 8,47 7,59 7,75
Related party transactions
The company and its subsidiaries, in the ordinary course of business, entered into various sale and purchase transactions with related parties.
These transactions were subject to terms that are no less favourable than those arranged with third parties.
Events after the reporting period
On 9 January 2013, Imperial acquired the pharmaceutical and consumer healthcare supply chain services business conducted by RTT Group (Pty) Limited for a total enterprise value of R515 million. The businesses acquired, collectively referred
to as RTT Health Sciences, include RTT Medical, RTT Trans Africa, RTT Consumer Health and RTT Essentials as well as 100% of Fuel Africa Logistics (Pty) Limited, RTT Kenya and RTT Ghana. The acquisition was funded from existing funding
resources. The net assets acquired, prior to the purchase price allocation, amounted to R121 million. For details about the acquisitions please refer to the business combinations section on page 17.
The sale of NAC was concluded on 15 February 2013.
Shareholders are advised that a preference dividend and an ordinary dividend has been declared by the Board of Imperial on 26 February 2013. For more details please refer to the dividend declaration on page 10.
Operational segmental reporting
For management purposes, the Group is organised into five major operating divisions Logistics, Car Rental and Tourism, Distributorships, Automotive Retail and Financial Services. These divisions are the basis on which the Group reports
its primary segment information.
The principal services and products of each of these divisions are as follows:
Logistics provides complete logistics solutions including transportation, warehousing, inland waterway shipping, container handling, manufacturing and packaging of chemicals and related value added services.
Car Rental and Tourism vehicle rental operations span the domestic corporate and leisure sectors as well as inbound tourists, with extensive support services. Tourism operations include inbound tour operations and niche tourism services.
Distributorships this segment imports and distributes a range of passenger and commercial vehicles, automotive products, industrial equipment and motorcycles.
Automotive Retail consists of a large network of motor vehicle and commercial vehicle dealerships in South Africa and represents most of the major original equipment manufacturers (OEMs). It also manufactures and sells caravans and canopies.
Financial Services comprises insurance operations which are focused on a range of short-, medium- and long-term insurance and assurance products that are predominantly associated with the automotive market, the sale of warranty and
maintenance products, income from joint ventures on the sale of financial services, cell captive arrangements and factoring of premium finance operations.
Business combinations (including businesses acquired after the reporting period)
Subsidiaries and businesses acquired Nature of Operational Date Interest Acquired Acquired
business segment acquired acquired during the ccafter the
(%) reporting reporting
period period
Rm Rm
Afintapart SA (Pty) Limited Truck part distributor Distributorships September 2012 80 40
LTS Kenzam (Pty) Limited Specialised freight Logistics October 2012 60 29
RTT Health Sciences Supply chain services Logistics January 2013 100 515
Total purchase consideration transferred 69 515
Reason for the acquisitions
These businesses were acquired to complement and expand our distribution and logistics businesses within South Africa and the rest of Africa.
Assets acquired and liabilities assumed at date of acquisition:* Aggregate of RTT Health
immaterial Sciences*
acquisitions* Rm
Rm
Assets
Intangible assets 41 9
Property, plant and equipment 14 55
Transport fleet 19
Inventories 19 23
Trade and other receivables 50 256
Cash resources 3 15
146 358
Liabilities
Interest-bearing borrowings 22 2
Deferred tax liabilities 4
Non-current financial liabilities 8
Trade and other payables and provisions 46 233
Current tax liabilities 1 2
81 237
Acquirees carrying amount at acquisition 65 121
Less: Non-controlling interests (16)
Net assets acquired 49 121
Purchase consideration transferred 69 515
Cash 44 515
Contingent consideration 25
Excess of purchase price over net assets acquired 20 394
Trade and other receivables acquired had gross contractual amounts of R313 million of which R7 million was doubtful. None of the resulting goodwill is expected to be deductible for tax purposes. Non-controlling interests
has been calculated based on their proportionate share in net assets.
Details of contingent consideration
The contingent consideration requires the group to pay the vendors an additional total amount of R25 million over three years if the entitys net profit after tax exceeds certain earnings targets.
Acquisition costs
Acquisition costs, for acquisitions concluded during the period, amounted to R1 million and has been recognised as an expense in the income statement within business acquisition costs.
Impact of the acquisitions on the results of the Group
From the dates of acquisition the businesses acquired during the reporting period contributed revenue of R112 million and net profit of R5 million.
Had all the acquisitions been consolidated from 1 July 2012 the Groups revenue and net profit would have been R46 015 million and R1 804 million respectively, with the new acquisitions contributing revenue of R753 million and net
profit of R17 million after adjusting for the funding costs on the acquisitions.
As the initial accounting for the business acquisitions were incomplete depreciation and amortisation of assets were calculated on their pre-acquisition carrying values before any purchase price allocation.
*The values of the assets acquired and the liabilities assumed are provisional as the initial accounting for the business combinations are incomplete.
Segmental information Financial position
Head Office Head Office
Car Rental Car Rental Distri- Distri- Automotive Automotive Financial Financial and and
Group Group Logistics Logistics and Tourism and Tourism butorships butorships Retail Retail Services Services Eliminations Eliminations
2012 2011 2012 2011 2012 2011 2012* 2011 2012 2011 2012 2011 2012 2011
at 31 December Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm
Business segmentation
Assets
Intangible assets 4 420 1 921 3 713 1 265 76 84 451 418 156 129 30 29 (6) (4)
Investments, associates and joint ventures 3 605 2 701 150 118 8 7 170 140 16 (2) 3 227 2 426 34 12
Property, plant and equipment 8 545 6 970 3 144 1 998 454 440 2 622 2 437 2 009 1 766 141 129 175 200
Transport fleet 4 399 3 999 4 445 4 050 (46) (51)
Vehicles for hire 2 688 2 587 2 059 2 119 474 320 602 582 (447) (434)
Non-current financial assets 254 259 254 259
Inventories 8 851 9 295 495 296 225 416 5 459 6 075 2 419 2 259 330 301 (77) (52)
Trade and other receivables 10 202 8 860 6 253 5 341 363 290 2 170 1 961 994 864 490 549 (68) (145)
Cash resources in financial services businesses 806 973 806 973
Operating assets 43 770 37 565 18 200 13 068 3 185 3 356 11 346 11 351 5 594 5 016 5 880 5 248 (435) (474)
Deferred tax assets 1 034 766
Loans to associates and other investments 533 662
Tax in advance 295 192
Cash resources 1 784 1 230
Assets classified as held for sale 630
Total assets per statement of financial position 48 046 40 415
Liabilities
Retirement benefit obligations 643 250 643 250
Insurance, investment, maintenance and warranty contracts 3 633 2 825 83 33 3 550 2 792
Trade and other payables and provisions 13 467 12 195 6 170 4 886 539 330 3 593 4 034 1 972 1 826 1 463 1 365 (270) (246)
Non-current financial liabilities 274 243 78 131 33 163 112
Non-interest-bearing liabilities 18 017 15 513 6 891 5 267 539 330 3 709 4 067 1 972 1 826 5 013 4 157 (107) (134)
Non-redeemable, non-participating preference shares 441 441
Interest-bearing borrowings 11 088 8 099
Deferred tax liabilities 1 266 548
Current tax liabilities 543 860
Liabilities directly associated with assets classified as
held for sale 197
Total liabilities per statement of financial position 31 552 25 461
Geographic segmentation
Operating assets 43 770 37 565 18 200 13 068 3 185 3 356 11 346 11 351 5 594 5 016 5 880 5 248 (435) (474)
South Africa 29 946 30 660 7 674 8 437 3 128 3 316 10 133 10 309 4 783 4 318 4 871 4 836 (643) (556)
Rest of Africa 3 264 1 795 2 026 1 276 57 40 166 68 6 1 009 412 (1)
Rest of world 10 560 5 110 8 500 3 355 1 047 974 805 698 208 83
Non-interest-bearing liabilities 18 017 15 513 6 891 5 267 539 330 3 709 4 067 1 972 1 826 5 013 4 157 (107) (134)
South Africa 12 730 12 680 3 080 3 217 523 314 3 513 3 895 1 516 1 452 4 420 3 978 (322) (176)
Rest of Africa 1 287 773 625 534 16 16 49 38 5 593 179 (1) 6
Rest of world 4 000 2 060 3 186 1 516 147 134 451 374 216 36
Interest-bearing borrowings 11 088 8 099 6 877 3 601 1 354 1 778 2 927 2 711 1 602 1 257 (1 342) (987) (330) (261)
South Africa 4 500 4 493 2 794 2 691 1 303 1 812 2 108 1 975 1 414 1 145 (1 342) (987) (1 777) (2 143)
Rest of Africa 746 419 510 337 51 (34) 185 117 (1)
Rest of world 5 842 3 187 3 573 573 634 619 188 112 1 447 1 883
Gross capital expenditure 3 022 2 894 729 851 903 1 182 432 258 390 157 513 474 55 (28)
South Africa 2 741 2 627 528 618 888 1 174 404 249 352 140 512 474 57 (28)
Rest of Africa 82 87 51 79 15 8 16 1 (1)
Rest of world 199 180 150 154 12 9 38 17 (1)
Gross capital expenditure 3 022 2 894 729 851 903 1 182 432 258 390 157 513 474 55 (28)
Less: Proceeds on disposal (1 159) (1 048) (190) (147) (314) (523) (101) (39) (40) (22) (512) (313) (2) (4)
Net capital expenditure 1 863 1 846 539 704 589 659 331 219 350 135 1 161 53 (32)
* The assets and liabilities of NAC were classified as held for sale.
Segmental information Income statement
Head Office Head Office
Car Rental Car Rental Distri- Distri- Automotive Automotive Financial Financial and and
Group Group Logistics Logistics and Tourism and Tourism butorships butorships Retail Retail Services Services Eliminations Eliminations
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
for the six months ended 31 December Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm
Business segmentation
Revenue
Sale of goods 26 193 23 245 1 930 1 959 649 575 13 937 12 037 9 689 8 667 (12) 7
Rendering of services 17 479 13 708 13 844 10 419 1 218 1 301 1 240 889 908 821 253 314 16 (36)
Gross premiums received 1 528 1 374 1 528 1 374
Other 62 58 61 59 1 (1)
45 262 38 385 15 835 12 437 1 867 1 876 15 177 12 926 10 597 9 488 1 782 1 688 4 (30)
Inter-segment revenue 53 33 57 63 666 664 329 389 383 145 (1 488) (1 294)
45 262 38 385 15 888 12 470 1 924 1 939 15 843 13 590 10 926 9 877 2 165 1 833 (1 484) (1 324)
Operating expenses including cost of sales (41 535) (35 062) (14 642) (11 360) (1 486) (1 480) (14 422) (12 349) (10 574) (9 570) (1 882) (1 582) 1 471 1 279
Investment income 89 97 1 141 136 (53) (39)
Fair value gains on investments 136 35 136 35
Depreciation, amortisation and impairments (1 023) (847) (553) (406) (256) (250) (101) (80) (52) (46) (69) (78) 8 13
Recoupments (excluding properties) 10 13 14 11 1 (4) 1 (1) 1
Operating profit 2 939 2 621 707 715 183 210 1 316 1 162 299 261 491 344 (57) (71)
Recoupments from sale of properties, net of impairments 19 (38) 2 17 (44) 6
Amortisation of intangibles arising on business combinations (110) (13) (107) (11) (3) (2)
Foreign exchange gains (losses) 47 9 (6) 3 10 (18) 1 43 23
Fair value (losses) gains on foreign exchange derivatives (42) (9) 1 12 (43) (21)
Business acquisition costs (5) (53) (5) (51) (2)
Realised gain on sale of available-for-sale investment 10 10
Profit before net finance cost and exceptional (loss) profit 2 858 2 517 601 656 183 210 1 341 1 108 299 262 491 350 (57) (69)
Net finance cost including fair value gains and losses (362) (305) (216) (108) (54) (66) (108) (108) (62) (52) (5) 83 29
Income from associates and joint ventures 3 (17) 8 14 12 15 1 16 9 (33) (56)
Profit before tax and exceptional (loss) profit 2 499 2 195 393 562 129 144 1 245 1 015 237 211 502 359 (7) (96)
Geographic segmentation
Revenue 45 262 38 385 15 888 12 470 1 924 1 939 15 843 13 590 10 926 9 877 2 165 1 833 (1 484) (1 324)
South Africa 32 142 29 154 6 388 6 462 1 867 1 865 13 999 11 830 9 497 8 675 1 885 1 694 (1 494) (1 372)
Rest of Africa 2 788 2 201 2 289 1 849 57 74 157 139 4 280 139 1
Rest of world 10 332 7 030 7 211 4 159 1 687 1 621 1 425 1 202 9 48
Operating profit 2 939 2 621 707 715 183 210 1 316 1 162 299 261 491 344 (57) (71)
South Africa 2 400 2 245 300 431 177 196 1 291 1 135 275 243 415 305 (58) (65)
Rest of Africa 183 135 100 82 6 14 1 1 76 39 (1)
Rest of world 356 241 307 202 24 26 24 18 1 (5)
Net finance cost including fair value gains and losses 362 305 216 108 54 66 108 108 62 52 5 (83) (29)
South Africa 234 255 115 97 51 66 88 90 59 50 5 (84) (48)
Rest of Africa 26 14 17 10 3 6 3 1
Rest of world 102 36 84 1 14 15 3 2 1 18
The results announcement is available on the Imperial website: www.imperial.co.za
Non-executive directors: TS Gcabashe (Chairman), SL Botha, T Dingaan, S Engelbrecht, RL Hiemstra, P Langeni, MJ
Leeming, MV Moosa, RJA Sparks, A Tugendhaft (Deputy Chairman), Y Waja
Executive directors: HR Brody (Chief Executive), OS Arbee, MP de Canha, AH Mahomed, GW Riemann (German), M Swanepoel
Other executive committee members: M Akoojee, BJ Francis, M Mosola, PB Michaux, JJ Strydom
Company Secretary: RA Venter
Business address and registered office:
Imperial Place, Jeppe Quondam, 79 Boeing Road East, Bedfordview, 2007
Share transfer secretaries:
Computershare Investor Services (Pty) Limited, 70 Marshall Street, Johannesburg, 2001
Sponsor:
Merrill Lynch SA (Pty) Limited, 138 West Street, Sandown Sandton, 2196
Date: 27/02/2013 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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