Wrap Text
Preliminary Summarised Audited Results for the year ended 30 June 2013
Imperial Holdings Limited
Registration number: 1946/021048/06
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN: ZAE000088076
Preliminary summarised audited results for the year ended 30 June 2013
Highlights and key data
Revenue 14% higher at R92 382 million
Operating profit improved 8% to R6 087 million
HEPS up 15% to 1 804 cents
Core EPS up 15% to 1 871 cents
Free cash conversion ratio of 106%
Final dividend of 440 cents per share up 16%
Return on equity of 23% (based on core earnings)
Overview of results
Imperial achieved a pleasing result for its 2013 financial year. All divisions achieved operating profit growth as the
portfolio proved to be resilient amid challenging trading conditions in South Africa and Europe. The group made good
progress during the year in enhancing its portfolio of businesses by exiting sub-scale operations and adding areas of
strategic growth that will maximise returns for our shareholders.
Our over-arching strategic objective is to drive the improvement of returns on capital, as this is the ultimate
generator of value for our shareholders. In line with this objective, the group achieved a return on invested capital (ROIC)
of 16,2% for the year against a weighted average cost of capital (WACC) of 8,8%. Our target is to achieve a ROIC of 4%
above WACC through the cycle.
The group is continuously seeking growth opportunities in and adjacent to existing industries and geographies. In this
respect we have benefited from a full-year contribution of Lehnkering and a six-month contribution from the
pharmaceutical logistics related acquisition of Imperial Health Sciences (previously RTT Health Sciences), which performed ahead of
expectation. Operating profit generated in Africa outside South Africa rose by 33% to R397 million and has doubled over
the last three years. Operating profit from international activities (excluding South Africa) increased to 21% of the
group result from 17% in 2012.
Revenue was 14% higher at R92,4 billion and operating profit increased by 8% to R6,1 billion. Core EPS improved by
15%. The return on equity of the group was 23%. Despite share buybacks and significant recent acquisitions, the statement
of financial position remains healthy with a net debt to equity ratio (excluding preference shares) of 49%.
Following the disposals of sub-scale operations as detailed later in this report and in line with our strategy of
focusing on our core industries namely, logistics; distribution of automotive and industrial products; automotive retailing;
and financial services, the group has now clustered its businesses into three main pillars as follows:
Rmillion 2013 2012 % change
Logistics
Revenue 33 592 27 704 21
Operating profit 1 679 1 508 11
Operating margin (%) 5,0 5,4
Automotive and Industrial
Revenue 57 577 51 679 11
Operating profit 3 578 3 409 5
Operating margin (%) 6,2 6,6
Financial Services
Revenue 4 238 3 999 6
Operating profit 945 775 22
Operating margin (%) 22,3 19,4
The Logistics pillar had an excellent second half and revenue and operating profit increased by 21% and 11%
respectively, for the year. The newly named Africa Logistics division (which includes South Africa) was negatively impacted by the
transport workers strike during the first half of the year and a struggling SA economy, especially in the manufacturing
sector. The logistics businesses in the rest of Africa, which is involved in the distribution of FMCG products,
performed well. The International Logistics division had to contend with a slowing European economy during the year but was
operationally well managed in an environment where activity levels in some of its core markets were under pressure. This
business also benefits from exports from Germany into stronger markets outside Europe.
The Automotive and Industrial pillar performed satisfactorily and each division within this pillar delivered growth.
Revenue and operating profit in this pillar were up 11% and 5%, respectively. This pillar houses the following divisions:
Distribution, Retail and Allied Services
The division imports and distributes a range of passanger and commercial vehicles, industrial equipment and motorcycles and
includes vehicle dealerships in South Africa and Australia.
Automotive Retail
Automotive Retail includes our dealership franchisee activities on behalf of locally based original equipment
manufacturers (OEMs) and the activities of Beekman and Jurgens;
Other Segments
This division includes our other motor vehicle value chain activities being Autoparts and Car Rental. Tourism (until
sold) together with NAC (disposed of earlier in the year) have also been included in the Other Segments division.
The Distribution, Retail and Allied Services division performed satisfactorily considering some of the challenges
faced by it during the year. These include a weakening currency, lack of stock availability on certain products from our
principals in Korea and a more competitive market. Revenue and operating profit was up 13% and 5% respectively.
The Automotive Retail division, which represents products of locally based OEMs and is therefore not involved in the
importation of vehicles, had an excellent year, with revenue and operating profit up 16% and 14% respectively.
The Other Segments division is down on both revenue and operating profit which was impacted by NAC being sold during
2013.
The Car Rental business had a very good second half and achieved a satisfactory result for the year, despite tough
trading conditions in the car rental industry. Revenue growth was encouraging as both revenue days and revenue per day
grew. Utilisation also improved from the first half and Auto Pedigree had an excellent year. Revenue and operating profit
were up 10% and 6% respectively.
The Autoparts business, which forms a valuable part of our motor value chain, includes Midas, Alert Engine Parts,
Turbo Exchange and the newly acquired Afintapart. Midas performed satisfactorily in a sluggish and competitive market.
Alert, the engine parts businesses, performed well, while Turbo exchange was negatively impacted by competitively priced
imports. Revenue and operating profit were up 8% and 5% respectively.
The Financial Services pillar had an excellent year, achieving operating profit growth of 22%.
Revenue in the insurance division improved by 6% and investment income was higher than in the prior year arising from
more favourable equity markets. The underwriting margin was in line with the prior year at 7,9% and improved strongly in
the second half to 8,6%. This performance was satisfactory considering the high claims (arising from hail damage) that affected
the short-term insurance industry during the year. The life insurance unit grew premium income by 15% while the rest of
Africa insurance businesses continue to show good growth.
Operating profit from the Other Financial Services division, which is mainly represented by LiquidCapital, grew by
22%. The growth was driven by the strong annuity income streams that flow from the service and maintenance plans, vehicle
financing alliances and a growing range of value added financial products sold within this division.
The group operating margin reduced from 7,0% to 6,6%. This was caused by the reduced margins experienced in the
Automotive and Industrial and Logistics pillars. The Distribution, Retail and Allied Services division achieved an operating
margin of 8,7% against 9,3% in the prior year. This decline was mainly caused by the aforementioned supply disruptions,
the weakening of the Rand and a more competitive market. Automotive Retail maintained its margin at 2,9%. The margin in
the Logistics pillar improved significantly in the second half but was lower than the prior year at 5,0% versus 5,4%.
This was primarily due to the transport workers strike in South Africa during the first half and challenging trading
conditions experienced in both the SA and International Logistics divisions during the year.
In aggregate, the groups operating profit grew by 8%, and core earnings per share (core EPS) increased by 15%.
Net finance costs increased by 9% to R744 million on higher debt mainly incurred to fund the expansion of the group.
Despite the higher net finance costs, interest covered by operating profit remains healthy at 8,2 times (2012: 8,3
times).
Income from associates showed an increase of 87%. MiX Telematics, in which Imperial holds a 29% interest, performed
well and contributed R39 million (2012: R31 million). MDS Logistics plc, the Nigerian logistics business, in which we
acquired a 49% shareholding effective 26 April 2013, made a positive contribution for two months of this year. Ukhamba also
performed better due to the reversal of an impairment in the current year of its investment in Distribution and
Warehousing Network Limited (DAWN).
The group benefited from a lower effective tax rate of 28,1% compared to 29,3% in the prior year. This was mainly due
to the saving of STC, which is no longer applicable.
Earnings attributable to minorities reduced from R408 million to R392 million. This was mainly due to the sale of
businesses with minorities, the impact of the strike and an amount of R17 million that was reversed which had been provided
for in the prior year.
The table below summarises the reconciliation from Earnings to Core Earnings:
% June June
R million change 2013 2012
Earnings attributable to owners of Imperial 11 3 294 2 980
Profit on disposal of assets (41) (29)
Impairment of assets 27 49
Exceptional items 164 31
Realised gain on disposal of available-for-sale investments (10) (19)
Amortisation of intangible assets arising on business combinations 254 128
Business acquisition costs 15 51
Remeasurement of contingent considerations (66)
Headline earnings from discontinued operations (34)
Other adjustments 6 (2)
Tax effects (59) (38)
Core Earnings 15 3 584 3 117
Financial position
Total assets increased by 13% to R52 billion (2012: R46 billion) due to acquisitions, translation effects of a weaker
Rand, organic growth and expansion of existing businesses.
Goodwill and intangible assets rose to R5,2 billion from R4,2 billion mainly as a result of the RTT Health Sciences
acquisition and translation effects of a weaker Rand.
Investment in associates increased to R1,3 billion (2012: R889 million) mainly due to the acquisition of 49% of MDS
Logistics, a Nigerian logistics business providing integrated supply chain and logistics solutions.
Net debt to equity (excluding preference shares) at 49% was higher than the prior year (39%). This was mainly due to
acquisitions, expansion of existing businesses and share buybacks amounting to R742 million during the year. Translation
of our foreign debt due to a weaker Rand also impacted on our debt level at year end. The net debt level is below the
target gearing range of 60% to 80% and still leaves significant room for further expansion of the group.
The groups Euro bond (236 million) matured and was partly refinanced during the year. A new bond (IPL 7) amounting
to R750 million was issued in South Africa and a combination of cash and existing facilities was used to repay the
balance of the Euro bond. The groups liquidity position is strong with R5,9 billion in unutilised facilities.
Net working capital increased by 34% from the prior year due to acquisitions, foreign exchange translation differences
and a much improved inventory position in the Distribution, Retail and Allied Services and Automotive Retail divisions
compared to the prior year. We are now optimally stocked in these divisions. As a result, our net working capital turn
reduced to 15,0 times from 17,5 times in the prior year.
Shareholders equity increased due to higher retained income and the weakening of the Rand which resulted in gains on
the foreign currency translation reserve of R731 million accounted for in the statement of comprehensive income. This
was offset by dividends paid of R1 478 million and by R742 million utilised for the repurchase and cancellation of 4,0
million shares in the open market.
New business written on service, maintenance and warranty contracts generated by the Financial Services division
resulted in insurance, investment, maintenance and warranty contracts growing to R4,0 billion, up 23% from the prior year
(2012: R3,2 billion).
Cash flow
Cash generated by operations before capital expenditure on rental assets was 3% lower than the prior year at R7,2
billion. After financing costs, tax payments and capital expenditure on rental assets, net cash flow from operating
activities decreased to R4,1 billion, down R243 million when compared to the prior year. This was mainly due to a higher
absorption of cash by working capital compared to the prior year, as our inventory position in the Distribution, Retail and
Allied Services division increased as we secured more vehicles from our Korean suppliers. Capital expenditure on rental
assets was higher than in the prior year.
Net replacement and expansion capital expenditure excluding car rental vehicles, was 25% higher than the prior year. A
net R539 million was spent on acquisitions during the year. We made further investments in associates of R321 million,
the major one being the acquisition of 49% of MDS Logistics, a Nigerian logistics business.
Cash flows from investing activities were impacted by our Insurance business increasing its exposure to equity markets
and investing its cash into longer-term deposits which benefited the group through good investment returns.
Under financing activities, the Euro bond matured and was replaced by a new bond (IPL 7) amounting to R750 million and
other short-term debt. Four million shares worth R742 million were purchased in the open market during the year and
dividends paid increased from R1,4 billion to R1,8 billion.
Business conditions in Imperials markets
The new vehicle market was favourable during the year, growing in South Africa by 7,6%. Good credit availability,
improved affordability and continued low interest rates underpinned the growth in the vehicle market. The used car market
also improved during the year as a result of new vehicle price inflation.
Industrial action impacted the group during the year 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 customers.
In the Africa logistics division, trading conditions in the South African market were challenging. The manufacturing
sectors of the South African economy struggled to gain momentum, which impacted on a number of our businesses, and
certain segments of the retail sector experienced pressure.
The consumer market across many other African countries continued to grow with the increase in the size of the
emerging middle class, particularly in those sectors in which our African logistics businesses have chosen to focus, namely
FMCG and pharmaceutical products.
In Germany, we experienced tough market conditions due to the slowdown in the European economy. Transport volumes were
depressed, although activity levels in the chemical industry and gas shipping market held up well. We also benefited
from German exports into markets outside Europe.
Competitive trading conditions persisted in the car rental market which has seen rental rates remain under pressure.
The impact of a change in revenue mix (increase in insurance replacement business), higher accident rates and hail storms
during the year had an adverse impact on operating margins.
The autoparts industry is mature and competitive but stable. As a result, we experienced competitive pressures and a
decline in consumer spending on discretionary products, like camping equipment and accessories, which impacted us
negatively.
The current cycle in the motor industry favours our Financial Services pillar. New business growth was driven off the
back of an increase in vehicle sales in a favourable new car market.
Insurance underwriting conditions in the short-term industry were more challenging, with two large hailstorms having a
negative impact during the year. The termination of certain loss-making books of business however, contributed
positively, resulting in underwriting margins being in line with the prior year. Equity markets were favourable and investment
returns higher.
Vehicle sales
In South Africa, the group sold 123 737 new and 63 266 used vehicles in the year, respectively 2,9% and 7,9% more
than the prior year. The national new vehicle market grew by 7,6% year on year for the 12-month period to June 2013,
according to NAAMSA.
The Australian and United Kingdom operations sold 10 854 new vehicles, which was in line with the prior year, and 4
346 used vehicles which was 4,3% lower.
Acquisitions and disposals during the year
Acquisitions during the year consisted of:
- 100% of the pharmaceutical distribution and healthcare supply chain services business conducted by RTT Group (Pty)
Limited (RTT Health Sciences) was acquired, effective from January 2013. The business is now branded Imperial Health
Sciences and is one of Africas leading pharmaceutical distributors 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 Namibia, Botswana, Mozambique,
Zimbabwe, Zambia, Kenya, Tanzania, Malawi, Uganda, Ethiopia, Rwanda, Ghana, Côte dIvoire and Nigeria;
- 60% of LTS Kenzam (Pty) Limited, a logistics business that distributes bituminous products throughout southern Africa
to sites in South Africa and cross-border to Mozambique, Malawi, Zimbabwe, Zambia, Botswana, Democratic Republic of
Congo, Lesotho, Swaziland and Namibia;
- 60% of KWS Carriers (Pty) Limited, a business focused on the movement of large volumes of bulk commodities from source
to the end users and export ports utilising mainly subcontracted vehicles;
- 49% of MDS Logistics plc, a Nigerian logistics business, providing integrated supply chain and logistics solutions. It
offers warehousing and distribution solutions primarily in the FMCG, pharmaceutical and telecommunications industries
in Nigeria, through a network of 50 distribution centres;
- Midas acquired 80% of Afintapart SA (Pty) Limited, a commercial vehicle parts distributor;
- 100% of Orwell Trucks Limited in the UK, a Mercedes Benz commercial vehicle dealer; and
- After the reporting date, the group acquired a further 11% shareholding in Renault SA, thereby increasing our
shareholding from 49% to 60%. The transaction is still subject to Competition Commission approval.
The group continues to focus on the strategic fit and returns of its businesses. As a result, the following disposals
were made:
- The groups 60% holding of Megafreight, a freight forwarding business;
- The groups 62% holding of NAC, the aircraft distributor and aviation services business, releasing R433 million of
capital; and
- After the reporting date, the group disposed of its Tourism division, which had become sub-scale in the context of
the group, to Cullinan Holdings Limited, subject to approval by the Competition Commission. The purchase price will be
settled by the issue of 81 818 181 shares in Cullinan Holdings. The transaction will result in Imperial having a 10%
shareholding in Cullinan Holdings.
Logistics
Africa Logistics
Change Change
Change H2 H2 % on H2 H1 % on H1
R million 2013 2012 % 2013 2012 2012 2013 2013
Revenue 18 018 16 457 9,5 9 341 8 146 14,7 8 677 7,7
Operating profit 920 910 1,1 520 397 31,0 400 30,0
Operating margin % 5,1 5,5 5,6 4,9 4,6
The Africa Logistics division had an excellent second half and despite a challenging trading environment which included
a transport workers strike during the first part of the year, the operating profit was in line with the prior year.
The Africa business, including CIC, which is involved in the distribution of FMCG products into many African markets
performed well while volumes and rates in our customer base in South Africa, especially those involved in manufacturing were
depressed. If the impact of the strike is eliminated, the division would have been able to improve its operating margin
when compared to the prior year. Acquisitions also contributed positively to the performance.
During the year the division underwent a strategic consolidation process in South Africa. Similar expertise across
various businesses was combined into a number of new units to leverage scale and synergies to drive cost savings and
greater efficiency, the benefit of which should be realised in the new financial year.
The Transport and Warehousing business, which services the manufacturing, mining, commodities and construction
industries was under pressure as a result of industrial action and lower volumes in tough trading conditions. Volumes in the
second half were more stable, although still depressed. The business benefited from management initiatives to right size
the business to match market conditions.
Although also impacted by the transport workers strike and labour unrest in its client base, the bulk commodity
services business performed well. A 60% shareholding was also acquired in KWS Carriers during the year, a business focused on
the movement of bulk commodities from source to the end users and ports utilising mainly subcontracted vehicles.
The Specialised Freight business performed satisfactorily despite volume pressure in certain products, ie chemicals
and food products. The business gained new contracts during the year. The LTS Kenzam Bulk Transport acquisition was
concluded and the operation was integrated into this division with effect from 1 October 2012.
The Consumer Logistics business was negatively impacted by flat but depressed volumes, mainly in the manufacturing
client base. This affected all businesses in the supply chain, including our warehousing and distribution operations. As a
result, management focused on enhancing efficiencies and reducing costs to drive performance, the benefits of which
should be realised in the new financial year. Despite a difficult trading environment, the business was successful in
gaining significant new contracts and the integration of the FMCG and South African consumer healthcare components of the new
Imperial Health Sciences business was successfully implemented. The Cold Chain continues to impact results negatively as
difficult trading conditions persist. This business is being streamlined.
In the rest of Africa businesses, CIC continues to grow and perform well. Transport volumes were also better,
especially in our Namibian businesses. The new Imperial Health Sciences business performed ahead of expectation and will lead to
further opportunities to grow the business across the continent in the pharmaceutical industry. The logistics
businesses in rest of Africa increased turnover and operating profit by 23% and 45% respectively. The acquisition of 49% of MDS
Logistics plc in Nigeria was effective from 26 April 2013 and is reported as an associate. This acquisition provides an
excellent platform for further growth in the region and is consistent with our strategy of focusing on consumer
opportunities in Africa and following our customer base on the continent while creating sustainable partnerships in certain
markets. MDS has a quality customer base across a number of industries with a strong new business pipeline.
The Integration Services business had a challenging year due to low activity levels but it 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.
The net investment in the fleet is lower than the prior year, in line with the scheduled replacement cycle. We
incurred gross capital expenditure of R1 043 million for the year.
Logistics
International Logistics (EUR)
Change Change
Change H2 H2 % on H2 H1 % on H1
million 2013 2012 % 2013 2012 2012 2013 2013
Revenue 1 363 1 087 25,4 694 690 0,6 669 3,7
Operating profit 66 59 11,9 37 39 (5,1) 29 27,6
Operating margin % 4,8 5,4 5,3 5,7 4,3
International Logistics (ZAR)
Change Change
Change H2 H2 % on H2 H1 % on H1
R million 2013 2012 % 2013 2012 2012 2013 2013
Revenue 15 574 11 247 38,5 8 363 7 088 18,0 7 211 16,0
Operating profit 759 598 26,9 452 396 14,1 307 47,2
Operating margin % 4,9 5,3 5,4 5,6 4,3
The prior year is not directly comparable as the acquisition of Lehnkering was only included for six months. The
division had a robust second half and performed satisfactorily for the year despite tougher trading conditions as a result
of a slowing German economy. Transport volumes across the German inland shipping industry were down and freight rates
have been under pressure. Activity levels in certain of our core markets held up well, namely the chemical industry and
the gas shipping market. We also benefited from exports from Germany into markets outside Europe.
The groups shipping activities, including those of Lehnkering, have been integrated into one unit, namely the
Imperial Shipping Group. The business performed well despite difficult trading conditions where volumes and freight rates were
under pressure. To counter this, we gained business from existing and new customers, managed our costs better and
optimised our fleet of contracted vessels.
Lehnkering, which after restructuring 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 in the first half and performed much better in the second half, in line with expectations. The agrochemicals
industry typically generates higher revenues in the second half of our financial year. Lehnkering was affected by
once-off charges, mainly in the first half due to corrective action required in certain areas.
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, had a more challenging year. Its performance was affected by one client being placed
under administration and another having a fire which disrupted operations at the container terminal in Krefeld. It is
expected that the utilisation of the terminal will improve in the new financial year. The remaining terminals performed in
line with expectations.
Gross capital expenditure of R441 million was incurred, up 28% when compared to the prior year, mainly due to the
weaker Rand.
Automotive and Industrial
The Automotive and Industrial pillar as fully described above, houses the groups distribution and retail activities
(named Distribution, Retail and Allied Services); the Automotive Retail division; and the Other Segments division. Other
Segments includes Autoparts, Car rental, Tourism and NAC.
Distribution, Retail and Allied Services
Change Change
Change H2 H2 % on H2 H1 % on H1
R million 2013 2012 % 2013 2012 2012 2013 2013
Revenue 25 682 22 797 12,7 12 654 11 986 5,6 13 028 (2,9)
Operating profit 2 228 2 121 5,0 1 079 1 124 (4,0) 1 149 (6,1)
Operating margin % 8,7 9,3 8,5 9,4 8,8
The division performed satisfactorily considering some of the challenges faced by it during the year. These include a
weakening currency, lack of stock availability from our principals in Korea and a more competitive market. Excluding the
Australian operation, new vehicle registrations as reported to NAAMSA by Associated Motor Holdings (AMH), Amalgamated
Automobile Distributors (AAD), TATA and Mitsubishi were 1,2% higher, compared to a market increase of 7,6%. Strong growth
was experienced in used car and annuity revenue streams generated from after-sales parts and services. Revenue from
rendering of services was up 24% for the year. The growing vehicle parc of our imported brands is securing good levels of
after-market activity for its dealerships, which are performing better.
Vehicle distribution margins declined as a result of a weaker Rand, stock shortages and more competition. Forward
exchange contracts and price increases enabled us to manage the impact of the volatile currency throughout the year. The
strong growth in used car sales and after-sales parts and services also provided a valuable underpin to the divisions
operating margin and profit.
The Goscor Group which distributes industrial products, had an excellent year with strong growth experienced in the
forklift and access equipment businesses. The cleaning equipment business performed satisfactorily while Bobcat, which
supplies compact equipment into the construction, mining and agricultural sectors, had a challenging year.
The businesses that complement and are allied to our motor-related activities, which include Car Find, Bid 4 Cars and
Datadot, continue to perform well.
In Australia, new and used retail unit sales were down 5% and 11% respectively. The dealerships in Australia had to
realign their business to focus on selling more to retail and less to rental companies, which impacted volumes negatively.
Ford has a strong line-up of vehicles in Australia and the business is expected to improve.
Automotive Retail
Change Change
Change H2 H2 % on H2 H1 % on H1
R million 2013 2012 % 2013 2012 2012 2013 2013
Revenue 22 702 19 560 16,1 11 776 9 683 21,6 10 926 7,8
Operating profit 651 573 13,6 352 312 12,8 299 17,7
Operating margin % 2,9 2,9 3,0 3,2 2,7
The division produced a pleasing set of results for the year. Growth in new vehicle retail sales units from South
African operations was 10%, ahead of industry growth. Used vehicle sales also improved by 7,5% compared to the prior year.
Passenger car volumes were strong and were up 9,7% due to a well balanced franchise mix that benefited from a good new
model lineup and growth in the entry-level segment.
Commercial unit vehicle sales (including light commercial) was up 10,7% across all brands in South Africa.
Growth in after-sales service revenue was satisfactory, while parts revenue grew encouragingly as we continue to focus
on growing revenue streams from after-sales activities. The significant increase in new car sales over the last few
years bodes well for the future after-sales parts and services revenue for the division.
In the UK, the division continues to produce good results in a depressed market. The benefit of multi-franchising a
number of sites with light commercial vehicles has paid off well and the recent acquisitions of Watts (a DAF dealer) and
Orwell (a Mercedes Benz commercial vehicle dealer) also contributed positively.
Beekman Canopies continues to perform well and successfully expanded its distribution network during the year. Jurgens
Ci was impacted by industrial action in the second half of the year and produced a mixed set of results. The caravan
market also remains muted due to lower consumer spending on leisure activities in South Africa. The Australian caravan
assembly and distribution operations however performed better.
Other Segments
Car Rental
Change Change
Change H2 H2 % on H2 H1 % on H1
R million 2013 2012 % 2013 2012 2012 2013 2013
Revenue 3 608 3 282 9,9 1 902 1 658 14,7 1 706 11,5
Operating profit 405 383 5,7 214 185 15,7 191 12,0
Operating margin % 11,2 11,7 11,3 11,2 11,2
The Tourism businesses were disposed of after the reporting period and are discussed separately below. The above table
does not include the tourism results.
The business had a very good second half and achieved a satisfactory result for the year despite tough trading
conditions in the car rental industry. Revenue growth was encouraging in the car rental business as revenue days and revenue
per day increased by 3% and 1% respectively. The revenue per day was impacted by the change in mix due to the growth in
the replacement business. Revenue per day grew by 3% if the replacement business is excluded.
Utilisation improved from the first half and was in line with the prior year at 70%. This was achieved despite the
increase in the number of vehicles at the panelshops following the damage caused by hail storms during the year. The
average rental fleet size was 3% higher than the prior year.
Operating margin showed a slight improvement in the second half of the year but was still lower than the prior year as
costs increased ahead of revenue. Accident costs were significantly higher in the car rental business when compared to
the prior year.
Auto Pedigree had an excellent year as retail unit sales were higher and the business improved its performance
significantly from the prior year.
The panel business improved its performance from the prior year but further corrective actions are being taken by
management to strengthen the business.
Autoparts
Change Change
Change H2 H2 % on H2 H1 % on H1
R million 2013 2012 % 2013 2012 2012 2013 2013
Revenue 4 473 4 134 8,2 2 209 2 043 8,1 2 264 (2,4)
Operating profit 293 278 5,4 149 138 8,0 144 3,5
Operating margin % 6,6 6,7 6,7 6,8 6,4
The Autoparts business is being reported separately for the first time. It acts as a wholesaler and distributor of
parts and accessories for motor vehicles that are outside manufacturer warranty and service plans. The division includes
Midas, Alert Engine Parts, Turbo Exchange and the newly acquired Afintapart. The division forms a valuable part of our
motor vehicle value chain.
The industry is mature but stable as it is represented by a large national car parc of approximately 10 million
vehicles with an average age of approximately 12 years. During the year, some pressure was also experienced on discretionary
products like camping equipment and accessories. Midas performed satisfactorily in a sluggish and competitive 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 year.
Alert Engine Parts performed well while Turbo Exchange was negatively impacted by competitively priced imports.
Geriban, our 30% held associate in Zimbabwe traded well during the year, while NGK in which we own a 25% shareholding
performed in line with the prior year.
NAC and Tourism
R million 2013 2012
Revenue 1 112 1 906
Operating profit 1 54
Also included in the Other Segments result is NAC, the aircraft distributor and aviation services business which was
disposed of during the year and the Tourism businesses, which were recently announced as being sold, subject to
Competition Commission approval.
Financial Services
Change Change
Change H2 H2 % on H2 H1 % on H1
R million 2013 2012 % 2013 2012 2012 2013 2013
Insurance
Revenue 3 287 3 112 5,6 1 628 1 631 (0,2) 1 659 (1,9)
Operating profit 510 419 21,7 240 206 16,5 270 (11,1)
Adjusted investment income 251 175 43,4 100 95 5,3 151 (33,8)
Adjusted underwriting result 259 244 6,1 140 111 26,1 119 17,6
Operating margin % 15,5 13,5 14,7 12,6 16,3
Underwriting margin % 7,9 7,8 8,6 6,8 7,2
Other financial services
Revenue 951 887 7,2 445 535 (16,8) 506 (12,1)
Operating profit 435 356 22,2 214 225 (4,9) 221 (3,2)
Operating margin % 45,7 40,1 48,1 42,1 43,7
Total financial services
Revenue 4 238 3 999 6,0 2 073 2 166 (4,3) 2 165 (4,2)
Operating profit 945 775 21,9 454 431 5,3 491 (7,5)
Operating margin % 22,3 19,4 21,9 19,9 22,7
Note: Adjusted underwriting in the above table reflects a reallocation of policyholder investment returns from
investment income to the underwriting result.
The Financial Services pillar had an excellent year.
Insurance
The insurance underwriting performance was much improved in the second half and despite a deteriorating claims
experience in the short-term motor class, it was up 6% on the prior year and generated an adjusted underwriting margin of 7,9%
for the year. As part of its strategy to focus on its core markets and distribution channels, Regent exited certain
non-performing classes of business, which had not been generating adequate returns for some time. These made up less than
10% of its revenue but had a significant negative impact on underwriting performance. Regents other significant product
lines in the short-term insurance business delivered excellent results and showed healthy growth from the prior year.
Regent Life performed well, with gross written premiums up 15% for the year, although the economic assumption changes
impacted the underwriting result negatively in the second half.
Investment returns were higher than the prior year as a result of a larger exposure to equity markets, which performed
favourably when compared to the prior year. The second half was however, more challenging as equity markets were more
volatile.
Botswana and Lesotho continue to grow and the exposure to other African countries is becoming a more meaningful
contributor to the division.
Other Financial Services
Other Financial Services, mainly represented by LiquidCapital performed well. The joint venture profits with financial
institutions were however, negatively impacted by more conservative impairment assumptions in the second half; in line
with expectations and current market conditions. The advances book generated through these joint ventures has however,
grown encouragingly, as have the funds held under service, maintenance plans, warranties and roadside assistance.
Innovation of new products, improving retention and penetration rates in our sales channels also contributed positively to the
growth in these businesses. This provides a valuable annuity earnings underpin to our future profits.
Volumes in Imperial Fleet Management continue improving as we gain new contracts. Ariva, a personal leasing joint
venture with JD Group 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.
Among the many new initiatives launched is the expansion of our automotive artisan and technician training centres to
include two new facilities, which increases our annual training capacity to 1 400 artisans.
The Imperial Technical Training Academy (ITTA) brand is becoming a recognised and reliable service provider to the
industry and is now acknowledged as an industry benchmark.
ITTA promoted The Year of the Artisan in line with a call by Minister Blade Nzimande for closer collaboration
between industry, education, Further Education and Training Colleges (FETs) and government. It established a number of
critical initiatives signifying promising cooperation between the role players.
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 nine schools in the greater Gauteng area in
which we operate.
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 10 000 children.
Leading corporate citizenship initiatives
Imperial also places strategic emphasis on establishing itself as a leading corporate citizen. The IMPERIAL I-Pledge
campaign has recorded 135 000 pledges from individuals in South Africa, pledging to improve their driving behaviour. We
also recognise the clear business case for responsible environmental stewardship, and continually seek ways to reduce our
carbon footprint and consumption of scarce natural resources. These include a range of initiatives to reduce the energy
and carbon footprint, extensive water and waste recycling projects and the implementation of green, sustainable
building practices in our dealerships and other sites throughout our business.
Strategic intentions
Our over-arching strategic objective is to achieve improving returns on capital, as this is the ultimate generator of
value for our shareholders. To deliver on this objective, the group is continuously seeking capital-efficient growth
opportunities in and adjacent to existing industries and geographies.
Imperials deep involvement in virtually all aspects of the automotive value chain provides us with a competitive
advantage in this market, while generating the cash needed to grow our operations in areas that offer good growth prospects
and will maximise returns to our shareholders in future.
Our strategy is therefore centred on generating cash in the automotive business to grow the logistics operations,
while still continually pursuing opportunities to enrich our involvement in the automotive value chain.
Ordinary dividend
A final ordinary dividend of 440 cents per share (2012: 380 cents per share) has been declared. This brings the full
dividend for the year to 820 cents per share (2012: 680 cents per share), which is up 21% compared to the prior year.
Prospects
Imperials balance sheet remains strong despite significant organic and acquisitive growth and share buybacks in the
recent past.
In South Africa, we expect trading conditions in the logistics industry to remain challenging, driven by a weak
economy especially in the manufacturing sector. As a result, the division underwent a strategic consolidation process, which
positions it well to be more competitive and cost effective in a tough market. We expect the benefits of this process to
be realised in the 2014 financial year. Prospects in the rest of Africa are good, as our expansion into the continent
will continue gaining momentum, especially in consumer markets. CIC together with the new acquisitions of RTT Health
Sciences and MDS Logistics, provide the ideal platform to take advantage of growth opportunities in these markets.
Imperial Logistics International remains well positioned in attractive niches in the German logistics industry.
Despite the tough economic conditions in Europe, we are positive about the divisions prospects and its ability to show growth due to
its positioning and the industries it serves. We will continue to follow our customers who are entering new markets and
potential acquisitions will continue to be a growth driver.
We anticipate tougher trading conditions in the new motor vehicle market during the year ahead. Reduced disposable
income, a weaker currency and the high base created by strong volume gains in the last four years all present headwinds for
growth. While our inventory position has improved, we expect the market to be more competitive as market conditions get
tougher. As a result of new vehicle price increases, the used car market should improve further and after-sales parts
and services revenues will continue benefiting from the increase in the installed base of vehicles, especially in the
brands we represent.
Conditions in the car rental business are expected to remain competitive. Auto Pedigree should continue benefiting
from the improving used car market.
The Autoparts business is not affected directly by new vehicle sales and despite an increasingly competitive market we
should continue to perform solidly as initiatives to expand its product range and geographic footprint bear fruit.
In the year ahead Regent will focus on improving its underwriting result, which will be supported by its recent exit
from under-performing insurance product lines. Our investment portfolio will continue to be prudently managed and while
we cannot predict the performance of investment markets and our investment returns, we are confident that our
underwriting performance will improve in the year ahead.
The growth in the underlying books of business in LiquidCapital will be impacted by slower growth in the new vehicle
market. However, its financial performance will be under-pinned by the strong annuity revenue streams that flow from the
installed base of business it has generated in the last few years.
While it will be difficult to achieve meaningful growth under current market conditions in the 2014 financial
year, the group is well positioned to take advantage of organic growth and acquisition opportunities.
Retirement of executive director
Mr Abdul Hafiz Mahomed reaches the groups normal retirement age of 63 during 2013 and has decided to retire as a
director, effective 30 June 2013. He will remain in the employ of the group until the end of 2013 in order to ensure a
seamless handover of his responsibilities to his successor, Mr Osman Arbee. Hafiz joined the group as financial manager in
1982 and was appointed to the board in March 1992. Hafiz has played an instrumental and key role in the group over the
years and Imperial expresses its gratitude to him for over 30 years of dedicated service and wish him well in his
retirement.
Osman joined the group and the executive committee in September 2004 and was appointed to the board in July 2007.
By order of the board
TS Gcabashe HR Brody OS Arbee
Chairman Chief Executive Financial Director
Declaration of preference and ordinary dividends for the year ended 30 June 2013
Ordinary shareholders
Notice is hereby given that a gross final ordinary dividend in the amount of 440 cents per ordinary share has been
declared payable, by the board of Imperial, to holders of ordinary shares. The dividend will be paid out of reserves.
The ordinary dividend will be subject to a local dividend tax rate of 15%. The total STC credits utilised for the
ordinary dividend amounted to R21 427 646. The number of ordinary shares in issue at the date of the declaration was 209 956
092 and consequently the STC credits utilised amounted to 10,20577 cents per share. The net ordinary dividend, to those
shareholders who are not exempt from paying dividend tax, is therefore 375,53087 cents per share.
Preference shareholders
A further notice is hereby given that a gross final preference dividend of 349,66438 cents per preference share has
been declared payable, by the board of Imperial, to holders of non-redeemable, non-participating preference shares. The
dividend will be paid out of reserves.
The preference dividend will be subject to a local dividend tax rate of 15%. No STC credits will be utilised for the
preference dividend. The net preference dividend, to those shareholders who are not exempt from paying dividend tax, is
therefore 297,21472 cents per share.
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 Thursday, 19 September
Preference and ordinary shares commence trading ex-preference dividend and ex-ordinary dividend respectively Friday, 20 September
Record date Friday, 27 September
Payment date Monday, 30 September
The companys income tax number is 9825778719.
Share certificates may not be dematerialised/rematerialised between Friday, 20 September 2013 and Friday, 27 September
2013, both days inclusive.
On Monday, 30 September 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 30 September 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 Monday, 30 September 2013.
On behalf of the board
RA Venter
Group Company Secretary
20 August 2013
Summarised consolidated statement of profit or loss
Audited Audited
% 2013 2012
for the year ended 30 June change Rm Rm
Revenue 14 92 382 80 830
Net operating expenses (84 225) (73 402)
Profit from operations before depreciation and recoupments 8 157 7 428
Depreciation, amortisation, impairments and recoupments (2 070) (1 790)
Operating profit 8 6 087 5 638
Recoupments from sale of properties, net of impairments 8 (32)
Amortisation of intangible assets arising on business combinations (254) (128)
Foreign exchange gains and losses 103 16
Fair value gains and losses on foreign exchange derivatives (79) (26)
Remeasurement of contingent considerations 66
Realised gain on disposal of available-for-sale investment 10
Business acquisition costs (15) (51)
Exceptional items (178) (12)
Profit before net financing cost and income from associates and joint ventures 6 5 748 5 405
Net finance cost including fair value gains and losses (744) (681)
Income from associates and joint ventures 86 46
Profit before tax 7 5 090 4 770
Income tax expense (1 404) (1 382)
Net profit for the year 9 3 686 3 388
Net profit attributable to:
Owners of Imperial 11 3 294 2 980
Non-controlling interests 392 408
3 686 3 388
Earnings per share (cents)
- Basic 11 1 719 1 552
- Diluted 12 1 650 1 474
Summarised consolidated statement of comprehensive income
Audited Audited
2013 2012
for the year ended 30 June Rm Rm
Net profit for the year 3 686 3 388
Other comprehensive income - to be subsequently reclassified to profit or loss 708 653
- Exchange gains arising on translation of foreign operations 720 210
- Share of associates and joint ventures translation reserve 11
- Fair value gain on available-for-sale investments 10 19
- Reclassification of gain on disposal of available-for-sale investments (10) (19)
- Movement in hedge accounting reserve (21) 409
- Share of associates and joint ventures hedge accounting reserve 18
- Income tax relating to components of other comprehensive income (2) 16
Total comprehensive income for the year 4 394 4 041
Total comprehensive income attributable to:
Owners of Imperial 3 969 3 578
Non-controlling interests 425 463
4 394 4 041
Earnings per share information
Audited Audited
% 2013 2012
for the year ended 30 June change Rm Rm
Headline earnings reconciliation
Earnings - basic 3 294 2 980
Saving of finance costs by associate on potential sale of Imperial shares 43 21
Earnings - diluted 3 337 3 001
Profit on disposal of property, plant and equipment (IAS 16) (38) (29)
Profit on disposal of intangible assets (IAS 38) (3)
Impairment of property, plant and equipment (IAS 36) 24 49
Impairment of intangible assets (IAS 36) 3
Exceptional items 178 12
Exceptional items included in income from associates and joint ventures (14) 19
Realised gain on disposal of available-for-sale investment (10)
Realised gain on disposal of available-for-sale investment, included in income from
associates and joint ventures (19)
Other headline earnings adjustments included in income from associates and joint ventures 1
Tax effects on remeasurements 18 9
Non-controlling interests in remeasurements 3 (14)
Headline earnings - diluted 3 499 3 028
Saving of finance costs by associate on potential sale of Imperial shares (43) (21)
Headline earnings - basic 3 456 3 007
Earnings per share (cents)
- Basic 11 1 719 1 552
- Diluted 12 1 650 1 474
Headline earnings per share (cents)
- Basic 15 1 804 1 566
- Diluted 16 1 730 1 487
Core earnings reconciliation
Headline earnings - basic 3 456 3 007
Saving of finance costs by associate on potential sale of Imperial shares 43 21
Headline earnings - diluted 3 499 3 028
Amortisation of intangible assets arising on business combinations 254 128
Business acquisition costs 15 51
Remeasurement of contingent considerations (66)
Headline earnings from discontinued operations (34)
Core earnings adjustments included in income from associates and joint ventures 3
Capital gains tax on post-acquisition earnings of associates disposed 2
Tax effects on core earnings adjustments (77) (47)
Non-controlling interests in core earnings adjustments (1) 10
Core earnings - diluted 3 627 3 138
Saving of finance costs by associate on potential sale of Imperial shares (43) (21)
Core earning - basic 3 584 3 117
Core earnings per share (cents)
- Basic 15 1 871 1 623
- Diluted 16 1 794 1 541
Audited Audited
% 2013 2012
at 30 June change Rm Rm
Information on shares
Net asset value per share (cents) 12 8 413 7 479
Dividend per ordinary share (cents) 21 820 680
Number of ordinary shares in issue (million)
- total shares 208,8 209,8
- net of shares repurchased 195,1 196,1
- weighted average for basic 191,6 192,0
- weighted average for diluted 202,2 203,6
Number of other shares in issue (million)
- Deferred ordinary shares 13,0 14,1
Details of net finance cost and exceptional items
Audited Audited
2013 2012
for the year ended 30 June Rm Rm
Net finance cost
Net interest paid (744) (681)
Foreign exchange loss on monetary items (254) (88)
Fair value gain on interest-rate swap instruments 254 88
(744) (681)
Exceptional items
Impairment of goodwill (139) (123)
Net loss on disposal and rationalisation of investments in associates and joint ventures (7) (11)
Net loss on disposal and rationalisation of subsidiaries (32) 10
Fair value adjustments on discontinued operations 112
(178) (12)
Summarised consolidated statement of financial position
Audited Audited
2013 2012
at 30 June Rm Rm
ASSETS
Goodwill and intangible assets 5 206 4 234
Investment in associates and joint ventures 1 317 889
Property, plant and equipment 9 257 8 080
Transport fleet 4 626 4 336
Vehicles for hire 2 465 2 321
Deferred tax assets 1 014 930
Investments and loans 3 218 2 433
Non-current financial assets 227 242
Inventories 11 492 9 218
Tax in advance 439 195
Trade and other receivables 10 437 9 275
Cash resources 1 844 3 545
Assets classified as held for sale 94
Total assets 51 636 45 698
EQUITY AND LIABILITIES
Capital and reserves
Share capital and share premium 382 22
Shares repurchased (220) (220)
Other reserves 1 032 503
Retained earnings 15 219 14 361
Attributable to owners of Imperial 16 413 14 666
Non-controlling interests 1 300 1 223
Total equity 17 713 15 889
Liabilities
Non-redeemable, non-participating preference shares 441 441
Retirement benefit obligations 757 590
Interest-bearing borrowings 10 568 9 747
Insurance, investment, maintenance and warranty contracts 3 970 3 222
Deferred tax liabilities 1 498 1 107
Non-current financial liabilities 419 348
Trade and other payables and provisions 15 771 13 886
Current tax liabilities 453 468
Liabilities directly associated with assets classified as held for sale 46
Total liabilities 33 923 29 809
Total equity and liabilities 51 636 45 698
Capital commitments 935 1 112
Contingent liabilities 294 46
Summarised consolidated statement of cash flows
Restated
Audited Audited
2013 2012
for the year ended 30 June Rm Rm
Cash flows from operating activities
Cash generated by operations before movements in net working capital 8 795 8 198
Movements in net working capital (1 604) (758)
Cash generated by operations before capital expenditure on rental assets 7 191 7 440
Expansion capital expenditure - rental assets (332) (352)
Net replacement capital expenditure - rental assets (584) (505)
- Expenditure (2 330) (2 120)
- Proceeds 1 746 1 615
Cash generated by operations 6 275 6 583
Net finance cost paid (744) (681)
Tax paid (1 394) (1 522)
4 137 4 380
Cash flows from investing activities
Net acquisition of subsidiaries and businesses (539) (1 868)
Expansion capital expenditure - excluding rental assets (1 350) (773)
Net replacement capital expenditure - excluding rental assets (811) (962)
Dividend received from Ukhamba Holdings (Pty) Limited 387
Net movement in other associates and joint ventures (321) (94)
Net movement in investments, loans and non-current financial instruments (771) (63)
(3 792) (3 373)
Cash flows from financing activities*
Hedge cost premium paid (117) (105)
Ordinary shares repurchased and cancelled (742)
Dividends paid (1 755) (1 350)
Change in non-controlling interests (9) (177)
Capital raised from non-controlling interests 28
Repayment of IC 02 corporate bond (522)
Proceeds on the Euro-syndicated bank term loan raised 2 482
Repayment of Eurobond (2 690)
Proceeds on the issue of IPL 7 corporate bond 750
Net increase (decrease) in other interest-bearing borrowings 672 (1 534)
(3 863) (1 206)
Net decrease in cash and cash equivalents (3 518) (199)
Effects of exchange rate changes on cash resources in a foreign currency 209 102
Cash and cash equivalents at beginning of year 2 829 2 926
Cash and cash equivalents at end of year (480) 2 829
*There has been no cash flow for the shares issued under the share schemes.
Summarised consolidated statement of changes in equity
Share Attribu-
capital table to Non-
and share Shares re- Other Retained owners of controlling Total
premium purchased reserves earnings Imperial interests equity
Rm Rm Rm Rm Rm Rm Rm
Balance at 30 June 2011 - Audited 9 (220) 111 12 073 11 973 1 043 13 016
Total comprehensive income for the year 598 2 980 3 578 463 4 041
Movement in statutory reserve (133) 133
Share-based equity reserve charged to profit or loss 107 107 5 112
Share-based equity reserve transferred to retained earnings on vesting 39 (39)
Share-based equity reserve hedging cost utilisation (136) (136) (2) (138)
Ordinary dividends paid (1 091) (1 091) (1 091)
Dividends declared by Ukhamba Holdings (Pty) Limited on unrecognised fair
value adjustments on Imperial shares 305 305 305
Issue of 115 060 ordinary shares 13 13 13
Non-controlling interests arising on business combinations, net of disposals 36 36
Net decrease in non-controlling interests (83) (83) (63) (146)
Non-controlling interests share of dividends (259) (259)
Balance at 30 June 2012 - Audited 22 (220) 503 14 361 14 666 1 223 15 889
Total comprehensive income for the year 675 3 294 3 969 425 4 394
Movement in statutory reserve 21 (21)
Repurchase and cancellation of 4 003 074 ordinary shares from open market (742) (742) (742)
1 861 850 ordinary shares issued to settle the groups obligation in terms of
the share schemes 360 (271) 89 (14) 75
Share-based equity reserve charged to profit or loss 113 113 3 116
Share-based equity reserve transferred to retained earnings on vesting 196 (196)
Share-based equity reserve hedging cost utilisation (193) (193) 2 (191)
Ordinary dividends paid (1 478) (1 478) (1 478)
Realisation on disposal of subsidiaries (1) 1
Non-controlling interests arising on business combinations, net of disposals (64) (64)
Net decrease in non-controlling interests (11) (11) 2 (9)
Non-controlling interests share of dividends (277) (277)
Balance at 30 June 2013 - Audited 382 (220) 1 032 15 219 16 413 1 300 17 713
Notes to the summarised consolidated financial statements
Basis of preparation
The preliminary summarised 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 30 June 2013 and the SAICA Financial
Reporting Guides, as issued by the Accounting Practices Committee and financial reporting pronouncements as issued by
the Financial Reporting Standards Council. 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
summarised consolidated 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 summarised consolidated financial statements have been prepared under the supervision of R Mumford, CA(SA) and
were approved by the board of directors on 20 August 2013.
Accounting policies
The accounting policies adopted and methods of computation used in the preparation of the summarised consolidated
financial statements are in accordance with IFRS and are consistent with those applied during the previous year except where
the group has adopted new or revised accounting standards.
Revised accounting standards and circulars
The group adopted amendments to the following accounting standards and interpretations that became applicable during
the financial year.
IAS 1 - Presentation of financial statements - Amendments to the presentation of other comprehensive income.
IAS 12 - Income taxes - Deferred tax: recovery of underlying assets.
IAS 34 - Interim financial reporting - Disclosure of significant events and transactions.
IAS 1 introduced new terminology for the statement of comprehensive income and the income statement. As a result the
groups income statement has been named the statement of profit or loss.
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.
For a list and the impact of other standards and interpretations that will become applicable to the group in future
reporting periods refer to note 2 of the groups consolidated financial statements as at and for the year ended 30 June
2012.
Core earnings
Core earnings is a non-IFRS measure and excludes the impact of certain non-operational income and expense items from
reported headline earnings. It is included to provide an additional basis on which to measure the groups normalised
earnings performance.
Changes to the composition of the group
Acquisitions
For details about the acquisitions refer to the business combinations section.
Disposals
The group disposed of its 60% interest in Megafreight (Pty) Limited for R80 million in September 2012 and its 62%
interest in NAC for R62 million in February 2013.
Disposal group
The disposal of the Tourism division became highly probable in June 2013. As a result assets of R94 million and
liabilities of R46 million are classified as held for sale on the statement of financial position.
June June
Foreign exchange rates 2013 2012
The following major rates of exchange were used in the translation of the groups foreign operations:
SA Rand:Euro
- closing 13,04 10,39
- 12-month average 11,43 10,38
SA Rand:US Dollar
- closing 10,01 8,20
- 12-month average 8,84 7,75
Restatement and representation of comparative information
Restatement of the preliminary summarised consolidated statement of cash flows
2012
Decrease in interest-bearing borrowings Rm
Decrease in interest-bearing borrowings as originally presented (1 432)
Effects of exchange rate changes on cash resources in a foreign currency (102)
Decrease in interest-bearing borrowings - restated (1 534)
Representation of the segment report
The executive committee, being the chief decision-making body, has changed the basis in which the various businesses
within the group are now being reported because of the changes to the executive management of the group. This has been
aligned into three main pillars with seven reporting segments being allocated to these pillars.
The principal services and products of each of these segments are as follows:
Main pillars for operating segments
Logistics
This pillar comprises:
- Africa (including South Africa)
This segment comprises of logistics businesses within South Africa and Rest of Africa, which was previously reported
as part of Logistics. These businesses provide complete logistics solutions including transportation, warehousing,
container handling and related value-added services within Africa.
- International
This segment comprises the European logistics businesses, which was previously reported as part of Logistics. These
businesses provide complete logistics solutions including transportation, warehousing, inland waterway shipping,
container handling, manufacturing and packaging of materials and related value-added services within Europe.
Automotive and Industrial
This pillar comprises:
- Distribution, Retail and Allied Services
This segment comprises the distribution, retail and allied services businesses, which was previously reported as
part of Distributorships. These businesses import and distribute a range of passenger and commercial vehicles, industrial
equipment and motorcycles and include vehicle dealerships in South Africa and Australia.
- Automotive Retail
This segment comprises the automotive businesses, which is now being reported under the pillar Automotive and
Industrial. These businesses consists of a large network of motor vehicle and commercial vehicle dealerships in South Africa
representing most of the major original equipment manufacturers (OEMs) and commercial vehicle dealerships in the United
Kingdom. It also manufactures and sells caravans and canopies.
- Other Segments
This segment comprises the businesses of Autoparts, Car Rental, Tourism and NAC. Autoparts and NAC were reported
under Distributorships in 2012 and Car Rental and Tourism was previously shown as a segment on its own. The Car Rental
business consists of vehicle rental operations spanning the domestic corporate, leisure sectors (local and international),
with extensive support services and the sale of pre-owned vehicles. The Autoparts business is involved in wholesaling and
distributing vehicle parts and accessories.
Financial Services
This pillar comprises:
- Insurance
This segment consists the insurance businesses of the group, which was previously reported under the Financial
Services segment in 2012. These businesses comprise 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 and include cell
captive arrangements.
- Other Financial Services
This segment consists of the financial services business of the group, which was previously reported under the
Financial Services segment in 2012. These businesses comprise the sale of warranty and maintenance products associated with
the automotive market, income from joint ventures on the sale of financial services and factoring of premium finance
operations.
The new restructured segments resulted in the following restatements:
Operating Operating
assets liabilities
2012 2012
Rm Rm
Segment financial position
LOGISTICS
Now disclosed separately as Africa (including South Africa) Logistics 9 152 3 758
Now disclosed separately as International Logistics 7 985 3 005
Total as originally reported for Logistics in 2012 17 137 6 763
AUTOMOTIVE AND INDUSTRIAL
As reported originally in Distributorships in 2012 11 561 3 628
Autoparts reclassified to Other Segments (1 423) (568)
NAC reclassified to Other Segments (668) (230)
Total now remaining in Distribution, Retail and Allied Services 9 470 2 830
Autoparts reclassified from Distributorships 1 423 568
NAC reclassified from Distributorships 668 230
Car Rental and Tourism reclassified in total 2 809 380
Total now reported in Other Segments 4 900 1 178
FINANCIAL SERVICES
Now disclosed separately as Insurance 3 943 2 308
Now disclosed separately as Other Financial Services 1 233 2 564
Total as originally reported for Financial Services in 2012 5 176 4 872
Profit before
tax and
Operating exceptional
Revenue profit items
2012 2012 2012
Rm Rm Rm
Segment profit or loss
LOGISTICS
Now disclosed separately as Africa (including South Africa) Logistics 16 457 910 672
Now disclosed separately as International Logistics 11 247 598 381
Total as originally reported for Logistics in 2012 27 704 1 508 1 053
AUTOMOTIVE AND INDUSTRIAL
As reported originally in Distributorships in 2012 28 318 2 456 2 211
Autoparts reclassified to Other Segments (4 134) (278) (277)
NAC reclassified to Other Segments (1 387) (57) (34)
Total now remaining in Distribution, Retail and Allied Services 22 797 2 121 1 900
Autoparts reclassified from Distributorships 4 134 278 277
NAC reclassified from Distributorships 1 387 57 34
Car Rental and Tourism reclassified in total 3 801 380 247
Total now reported in Other Segments 9 322 715 558
FINANCIAL SERVICES
Now disclosed separately as Insurance 3 112 419 427
Now disclosed separately as Other Financial Services 887 356 383
Total as originally reported for Financial Services in 2012 3 999 775 810
Subsequent events
In terms of the Ukhamba black economic empowerment transaction, 1 122 377 deferred ordinary shares have converted to
ordinary shares with effect from 1 July 2013. These shares will be listed on the Johannesburg Securities Exchange.
Audit opinion
The auditors, Deloitte & Touche, have issued an unmodified audit opinion on the groups annual financial statements and on these
preliminary summarised financial statements set out from the summarised consolidated statement of profit or loss to the segment profit or loss
for the year ended 30 June 2013. The audit was conducted in accordance with International Standards on Auditing. Copies of their audit
reports are available for inspection at the companys registered office. The unmodified audit opinion on the group's annual financial statements
is incorporated in the group's annual financial statements.
Any reference to future performance included in this announcement has not been reviewed or reported on by the
auditors.
Business combinations
Purchase
Interest consideration
acquired transferred
Subsidiaries and businesses acquired Nature of business Operational segment Date acquired (%) Rm
RTT Health Sciences Supply chain services Logistics - Africa January 2013 100 515
(including South Africa)
Orwell Trucks Limited Vehicle sales and services Automotive Retail February 2013 100 118
KWS Carriers (Pty) Limited Commodities transport Logistics - Africa April 2013 60 48
(including South Africa)
Individually immaterial business combinations 95
Total purchase consideration transferred 776
Reason for the acquisitions
- RTT Health Sciences, one of Africas leading pharmaceutical and healthcare supply chain service providers was acquired to complement our logistics business within
South Africa to extend our footprint in Africa.
- Orwell Trucks Limited was acquired to expand our Automotive Retail business in the United Kingdom and complement our truck franchise.
- KWS Carriers was acquired to expand the commoditys transportation business within our Logistics division in South Africa.
Individually
RTT Health Orwell Trucks KWS Carriers immaterial
Fair value of assets acquired and liabilities assumed Total Sciences Limited (Pty) Limited acquisitions
at date of acquisition: Rm Rm Rm Rm Rm
Assets
Intangible assets 323 220 35 41 27
Property, plant and equipment 95 55 14 6 20
Transport fleet 72 53 19
Deferred tax assets 1 1
Inventories 151 14 113 1 23
Trade and other receivables 442 264 51 62 65
Cash resources 49 15 27 7
1 133 568 240 163 162
Liabilities
Deferred tax liabilities 71 36 8 15 12
Interest-bearing borrowings 73 22 29 22
Non-current financial liabilities 8 8
Trade and other payables and provisions 510 234 137 80 59
Current tax liabilities 5 1 2 2
667 271 169 124 103
Acquirees carrying amount at acquisition 466 297 71 39 59
Less: Non-controlling interests (21) (4) (17)
Net assets acquired 445 297 71 35 42
Purchase consideration transferred 776 515 118 48 95
- Cash 700 515 110 12 63
- Contingent consideration 75 8 36 31
- Fair value of previously held interest 1 1
Excess of purchase consideration over net assets acquired 331 218 47 13 53
Trade and other receivables acquired had gross contractual amounts of R452 million of which R10 million was doubtful. None of the goodwill is expected to be deductible for
tax purposes. Non-controlling interests have been calculated based on their proportionate share.
Details of contingent consideration
The contingent consideration requires the group to pay the vendors an additional total amount of R75 million over three years if the acquired businesses net profit exceeds
certain earnings targets.
Acquisition costs
Acquisition costs for acquisitions concluded during the year amounted to R7 million and have been recognised as expenses in profit or loss within business acquisition costs.
Impact of the acquisitions on the results of the group
Individually
RTT Health Orwell Trucks KWS Carriers immaterial
Total Sciences Limited (Pty) Limited acquistions
Impact of the acquisitions on the results of the group Rm Rm Rm Rm Rm
From the dates of acquisition, the acquired businesses contributed:
Revenue 1 514 697 324 246 247
Net profit as reported by entity 67 31 6 9 21
Funding costs and amortisation of intangible assets arising on the business combinations (34) (22) (7) (3) (2)
Net profit 33 9 (1) 6 19
Had all the acquisitions been consolidated from 1 July 2012 the groups revenue and net profit would have been R94 240 million and R3 710 million respectively, with the new
acquisitions contributing additional revenue of R1 858 million and net profit of R24 million. The net profit of R24 million has been reduced by the funding costs of
R3 million on the cash consideration and by the amortisation of intangible assets arising on the business combinations of R30 million.
Segment financial position#
LOGISTICS
Africa
Group Group (including South Africa) International
2013 2012 2013 2012 2013 2012
at 30 June Rm Rm Rm Rm Rm Rm
Business segmentation
Assets
Goodwill and intangible assets 5 206 4 234 1 261 882 3 174 2 720
Investments, associates and joint ventures 4 009 2 786 407 53 124 83
Property, plant and equipment 9 257 8 080 1 440 1 264 2 057 1 709
Transport fleet 4 626 4 336 3 330 3 303 1 339 1 078
Vehicles for hire 2 465 2 321
Non-current financial assets 227 242
Inventories 11 492 9 218 343 294 178 120
Trade and other receivables 10 437 9 275 3 842 3 356 2 818 2 275
Cash resources in financial services businesses 724 1 083
Operating assets 48 443 41 575 10 623 9 152 9 690 7 985
Deferred tax assets 1 014 930
Loans to associates and other investments 526 536
Tax in advance 439 195
Cash resources 1 120 2 462
Assets classified as held for sale 94
Total assets per statement of financial position 51 636 45 698
Liabilities
Retirement benefit obligations 757 590 757 590
Insurance, investment, maintenance and warranty contracts 3 970 3 222
Trade and other payables and provisions 15 771 13 886 4 229 3 656 2 901 2 394
Non-current financial liabilities 419 348 203 102 22 21
Operating liabilities 20 917 18 046 4 432 3 758 3 680 3 005
Non-redeemable, non-participating preference shares 441 441
Interest-bearing borrowings 10 568 9 747
Deferred tax liabilities 1 498 1 107
Current tax liabilities 453 468
Liabilities directly associated with assets classified as held
for sale 46
Total liabilities per statement of financial position 33 923 29 809
Geographic segmentation
Operating assets 48 443 41 575 10 623 9 152 9 690 7 985
- South Africa 32 180 28 662 8 177 7 354
- Rest of Africa 3 726 2 866 2 445 1 798
- Rest of world 12 537 10 047 1 9 690 7 985
Operating liabilities 20 917 18 046 4 432 3 758 3 680 3 005
- South Africa 14 457 13 191 3 664 3 221
- Rest of Africa 1 494 1 178 768 537
- Rest of world 4 966 3 677 3 680 3 005
Interest-bearing borrowings 10 568 9 747 3 175 2 485 3 735 3 731
- South Africa 5 650 3 503 2 423 2 013
- Rest of Africa 993 632 756 471
- Rest of world 3 925 5 612 (4) 1 3 735 3 731
Gross capital expenditure 5 331 4 913 1 043 1 287 441 344
- South Africa 4 667 4 315 939 1 110
- Rest of Africa 152 209 104 177
- Rest of world 512 389 441 344
Gross capital expenditure 5 331 4 913 1 043 1 287 441 344
Less: Proceeds on disposal (2 254) (2 252) (319) (290) (41) (32)
Net capital expenditure 3 077 2 661 724 997 400 312
Segment financial position# (continued)
AUTOMOTIVE AND INDUSTRIAL
Distribution, Retail Other
and Allied Services Automotive Retail Segments*
2013 2012 2013 2012 2013 2012
at 30 June Rm Rm Rm Rm Rm Rm
Business segmentation
Assets
Goodwill and intangible assets 163 168 242 129 341 303
Investments, associates and joint ventures 97 61 52 7 64 72
Property, plant and equipment 2 789 2 307 2 079 1 704 566 764
Transport fleet
Vehicles for hire 595 402 1 725 1 783
Non-current financial assets
Inventories 6 556 5 130 3 117 2 357 984 1 120
Trade and other receivables 1 718 1 402 977 856 737 858
Cash resources in financial services businesses
Operating assets 11 918 9 470 6 467 5 053 4 417 4 900
Deferred tax assets
Loans to associates and other investments
Tax in advance
Cash resources
Assets classified as held for sale
Total assets per statement of financial position
Liabilities
Retirement benefit obligations
Insurance, investment, maintenance and warranty contracts 95 82
Trade and other payables and provisions 3 507 2 744 2 883 2 297 1 140 1 166
Non-current financial liabilities 9 4 1 24 12
Operating liabilities 3 611 2 830 2 883 2 298 1 164 1 178
Non-redeemable, non-participating preference shares
Interest-bearing borrowings
Deferred tax liabilities
Current tax liabilities
Liabilities directly associated with assets classified as held
for sale
Total liabilities per statement of financial position
Geographic segmentation
Operating assets 11 918 9 470 6 467 5 053 4 417 4 900
- South Africa 10 620 8 414 5 067 4 363 4 376 4 849
- Rest of Africa 186 83 7 41 50
- Rest of world 1 112 973 1 393 690 1
Operating liabilities 3 611 2 830 2 883 2 298 1 164 1 178
- South Africa 3 384 2 652 1 955 1 850 1 154 1 152
- Rest of Africa 72 46 2 10 25
- Rest of world 155 132 926 448 1
Interest-bearing borrowings 3 998 2 317 1 459 858 1 285 1 795
- South Africa 3 378 1 562 1 173 739 1 239 1 757
- Rest of Africa 185 123 6 46 38
- Rest of world 435 632 280 119
Gross capital expenditure 1 054 445 518 321 1 494 1 696
- South Africa 1 012 425 468 295 1 470 1 667
- Rest of Africa 21 1 24 29
- Rest of world 21 19 50 26
Gross capital expenditure 1 054 445 518 321 1 494 1 696
Less: Proceeds on disposal (210) (145) (85) (93) (915) (1 012)
Net capital expenditure 844 300 433 228 579 684
Segment financial position# (continued)
FINANCIAL SERVICES
Other Head Office and
Insurance Financial Services Eliminations
2013 2012 2013 2012 2013 2012
at 30 June Rm Rm Rm Rm Rm Rm
Business segmentation
Assets
Goodwill and intangible assets 53 30 4 2 (32)
Investments, associates and joint ventures 2 906 2 208 386 (27) 302
Property, plant and equipment 135 139 7 4 184 189
Transport fleet (43) (45)
Vehicles for hire 305 665 (160) (529)
Non-current financial assets 227 242
Inventories 395 346 (81) (149)
Trade and other receivables 243 241 324 216 (222) 71
Cash resources in financial services businesses 724 1 083
Operating assets 4 288 3 943 1 421 1 233 (381) (161)
Deferred tax assets
Loans to associates and other investments
Tax in advance
Cash resources
Assets classified as held for sale
Total assets per statement of financial position
Liabilities
Retirement benefit obligations
Insurance, investment, maintenance and warranty contracts 1 283 1 066 2 592 2 074
Trade and other payables and provisions 1 152 1 242 231 490 (272) (103)
Non-current financial liabilities 161 208
Operating liabilities 2 435 2 308 2 823 2 564 (111) 105
Non-redeemable, non-participating preference shares
Interest-bearing borrowings
Deferred tax liabilities
Current tax liabilities
Liabilities directly associated with assets classified as held
for sale
Total liabilities per statement of financial position
Geographic segmentation
Operating assets 4 288 3 943 1 421 1 233 (381) (161)
- South Africa 3 241 3 008 1 421 1 233 (722) (559)
- Rest of Africa 1 047 935
- Rest of world 341 398
Operating liabilities 2 435 2 308 2 823 2 564 (111) 105
- South Africa 1 792 1 736 2 823 2 564 (315) 16
- Rest of Africa 643 572 (1) (2)
- Rest of world 205 91
Interest-bearing borrowings 201 (2 056) (1 314) (1 229) (125)
- South Africa 201 (2 056) (1 314) (708) (1 254)
- Rest of Africa
- Rest of world (521) 1 129
Gross capital expenditure 26 35 421 796 334 (11)
- South Africa 24 34 421 796 333 (12)
- Rest of Africa 2 1 1 1
- Rest of world
Gross capital expenditure 26 35 421 796 334 (11)
Less: Proceeds on disposal (1) (9) (683) (515) (156)
Net capital expenditure 25 26 (262) 281 334 (167)
* Other Segments includes Car Rental and Autoparts. The comparatives also include NAC and Tourism.
# The segment information has been restated.
Segment profit or loss#
LOGISTICS
Africa
Group Group (including South Africa) International
2013 2012 2013 2012 2013 2012
for the year ended 30 June Rm Rm Rm Rm Rm Rm
Business segmentation
Revenue
- Sale of goods 52 544 46 881 3 770 3 362
- Rendering of services 36 665 30 953 14 153 13 012 15 426 11 128
- Gross premiums received 3 049 2 875
- Other 124 121 121 119
92 382 80 830 17 923 16 374 15 547 11 247
Inter-segment revenue 95 83 27
92 382 80 830 18 018 16 457 15 574 11 247
Operating expenses including cost of sales (84 588) (73 671) (16 446) (14 980) (14 340) (10 320)
Investment income 192 186
Fair value gains on investments 171 83
Depreciation, amortisation and impairments (2 089) (1 806) (655) (576) (494) (334)
Recoupments (excluding properties) 19 16 3 9 19 5
Operating profit 6 087 5 638 920 910 759 598
Recoupments from sale of properties, net of impairments 8 (32) 3 6 2
Amortisation of intangible assets arising on business combinations (254) (128) (55) (29) (185) (96)
Foreign exchange gains and losses 103 16 3 1 (2) (1)
Fair value gains and losses on foreign exchange derivatives (79) (26) 1 1
Remeasurement of contingent considerations 66 64 (4)
Realised gain on disposal of available-for-sale investment 10 10
Business acquisition costs (15) (51) (13) (47)
Profit before net finance cost and exceptional items 5 926 5 417 922 889 578 457
Net finance cost including fair value gains and losses (744) (681) (275) (229) (179) (93)
Income from associates and joint ventures 86 46 11 12 25 17
Profit before tax and exceptional items 5 268 4 782 658 672 424 381
Geographic segmentation
Revenue 92 382 80 830 18 018 16 457 15 574 11 247
- South Africa 64 413 59 311 13 444 12 741
- Rest of Africa 5 608 4 656 4 565 3 716
- Rest of world 22 361 16 863 9 15 574 11 247
Operating profit 6 087 5 638 920 910 759 598
- South Africa 4 827 4 669 698 756
- Rest of Africa 397 298 224 154
- Rest of world 863 671 (2) 759 598
Net finance cost including fair value gains and losses 744 681 275 229 179 93
- South Africa 476 489 236 205
- Rest of Africa 58 33 39 24
- Rest of world 210 159 179 93
Segment profit or loss# (continued)
AUTOMOTIVE AND INDUSTRIAL
Distribution, Retail Other
and Allied Services Automotive Retail Segments*
2013 2012 2013 2012 2013 2012
for the year ended 30 June Rm Rm Rm Rm Rm Rm
Business segmentation
Revenue
- Sale of goods 22 465 20 214 20 143 17 193 6 149 6 082
- Rendering of services 1 879 1 513 1 905 1 749 2 750 3 032
- Gross premiums received
- Other
24 344 21 727 22 048 18 942 8 899 9 114
Inter-segment revenue 1 338 1 070 654 618 294 208
25 682 22 797 22 702 19 560 9 193 9 322
Operating expenses including cost of sales (23 256) (20 543) (21 959) (18 888) (7 950) (8 066)
Investment income
Fair value gains on investments
Depreciation, amortisation and impairments (192) (136) (93) (98) (545) (541)
Recoupments (excluding properties) (6) 3 1 (1) 1
Operating profit 2 228 2 121 651 573 699 715
Recoupments from sale of properties, net of impairments (1) (43) (22) 20
Amortisation of intangible assets arising on business combinations (4) (4) (7) (2)
Foreign exchange gains and losses 12 (31) 2 7 13
Fair value gains and losses on foreign exchange derivatives 6 2 1 3
Remeasurement of contingent considerations 3 3
Realised gain on disposal of available-for-sale investment
Business acquisition costs (1) (2)
Profit before net finance cost and exceptional items 2 244 2 044 642 553 728 731
Net finance cost including fair value gains and losses (191) (153) (122) (111) (153) (194)
Income from associates and joint ventures 7 9 22 21
Profit before tax and exceptional items 2 060 1 900 520 442 597 558
Geographic segmentation
Revenue 25 682 22 797 22 702 19 560 9 193 9 322
- South Africa 22 116 19 479 19 231 17 017 9 038 9 140
- Rest of Africa 327 313 10 96 122
- Rest of world 3 239 3 005 3 461 2 543 59 60
Operating profit 2 228 2 121 651 573 699 715
- South Africa 2 189 2 074 585 538 685 704
- Rest of Africa 1 4 14 11
- Rest of world 38 43 66 35
Net finance cost including fair value gains and losses 191 153 122 111 153 194
- South Africa 154 117 113 104 147 192
- Rest of Africa 13 7 6 2
- Rest of world 24 29 9 7
Segment profit or loss# (continued)
FINANCIAL SERVICES
Other Head Office and
Insurance Financial Services Eliminations
2013 2012 2013 2012 2013 2012
for the year ended 30 June Rm Rm Rm Rm Rm Rm
Business segmentation
Revenue
- Sale of goods 17 30
- Rendering of services 125 93 418 391 9 35
- Gross premiums received 3 049 2 875
- Other 3 2
3 177 2 970 418 391 26 65
Inter-segment revenue 110 142 533 496 (3 051) (2 617)
3 287 3 112 951 887 (3 025) (2 552)
Operating expenses including cost of sales (3 080) (2 903) (571) (528) 3 014 2 557
Investment income 166 160 147 111 (121) (85)
Fair value gains on investments 171 83
Depreciation, amortisation and impairments (34) (33) (92) (114) 16 26
Recoupments (excluding properties) 1
Operating profit 510 419 435 356 (115) (54)
Recoupments from sale of properties, net of impairments 6 (14) 19
Amortisation of intangible assets arising on business combinations (1) 1
Foreign exchange gains and losses 83 32
Fair value gains and losses on foreign exchange derivatives (86) (33)
Remeasurement of contingent considerations
Realised gain on disposal of available-for-sale investment
Business acquisition costs (2) (1)
Profit before net finance cost and exceptional items 510 425 435 354 (133) (36)
Net finance cost including fair value gains and losses (13) (1) (1) 190 100
Income from associates and joint ventures (1) 2 39 30 (17) (45)
Profit before tax and exceptional items 496 427 473 383 40 19
Geographic segmentation
Revenue 3 287 3 112 951 887 (3 025) (2 552)
- South Africa 2 677 2 607 951 887 (3 044) (2 560)
- Rest of Africa 610 505
- Rest of world 19 8
Operating profit 510 419 435 356 (115) (54)
- South Africa 352 290 435 356 (117) (49)
- Rest of Africa 158 129
- Rest of world 2 (5)
Net finance cost including fair value gains and losses 13 1 1 (190) (100)
- South Africa 13 1 1 (188) (130)
- Rest of Africa
- Rest of world (2) 30
* Other Segments includes Car Rental, Autoparts, NAC and Tourism.
# The segment information has been restated.
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, GW Riemann (German), M Swanepoel
Other executive committee members: M Akoojee, BJ Francis, 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
The full annual financial statements will be distributed by the end of September 2013 and will be available on the company's website at the same time.
The results announcement is available on the Imperial website: www.imperial.co.za
Date: 20/08/2013 03:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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