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Preliminary summarised audited results for the year ended 30 June 2015
IMPERIAL HOLDINGS LIMITED
Registration number: 1946/021048/06
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN: ZAE000088076
Leaders in mobility
Preliminary summarised audited results for the year ended 30 June 2015
Imperial Holdings is a JSE listed South African-based international Group of companies active predominantly in three major areas of mobility: consumer and
industrial logistics; vehicle import, distribution, dealerships, retail, rental and aftermarket parts; and vehicle-related financial services.
Imperial employs over 51 000 people who generate annual revenues in excess of R110 billion, mainly in Africa and Europe, through five major divisions
which operate under separate management structures to enable decentralised entrepreneurial creativity within the Group's clearly-defined strategic, capital,
budgetary and governance principles.
Imperial strives for focused value creation and leadership in its chosen markets by allocating capital and resources to those organic and acquisitive growth
opportunities that will enhance and be enhanced by the Group's existing assets, scale and capabilities.
Some of Imperial's strategic choices will be deliberate - the result of prior research and analysis, while others will be emergent - the result of unplanned or
unexpected external developments. In both cases strictly defined capital allocation principles will be applied.
2015 Financial highlights
Revenue up 7% to R110,5 billion (37% foreign)
Operating profit up 1% to R6,2 billion (32% foreign)
HEPS unchanged at 1 624 cents per share
Core EPS down 3% 1 754 cents per share
EPS down 6% 1 582 cents per share
Free cash flow up 111% to R4,5 billion
Return on invested capital 12%
Weighted average cost of capital 9%
Return on equity 17%
Final cash dividend of up 6% to 445 cents per share
Overview
Despite a steady deterioration of trading conditions throughout the year, a marked improvement in second half performance and the acquisition of Pharmed,
Imres and S&B Commercials, resulted in the Imperial Group achieving record revenue and operating profit in the 2015 financial year.
- Excluding current year acquisitions, revenue grew 3% and operating profit declined 4%. Revenue and operating profit from continuing operations,
excluding Regent, were up 7% to R107,5 billion and down 1% to R5,7 billion respectively.
- Notwithstanding a first to second half improvement from 5,1% to 6,2%, the Group's operating margin reduced from 6,0% to 5,6% due mainly to the
impact of a weakening Rand on the competitiveness and profitability of the Vehicle Import, Distribution and Dealerships division.
- A full reconciliation from earnings to headline earnings and core earnings is provided in the Group Financial Performance section.
- The net debt to equity ratio (including preference shares as equity) improved from 81% in December 2014 to 69% at year-end (62% at June 2014).
- The Group's return on invested capital (ROIC) was 12% and the weighted average cost of capital (WACC) was 9%.
- Cash flow from operating activities improved to R5,0 billion from R3,0 billion in 2014, largely as a result of lower investment in working capital.
- A final cash dividend of 445 cents per share was declared, up 6%, resulting in a full year dividend of 795 cents per share for 2015 compared to 820 cents
per share in 2014.
These results reflect progress with Imperial's previously espoused intent to decouple the Group's performance from the impact of Rand weakness on the
Vehicle Import, Distribution and Dealerships division, as it pertains specifically to the competitiveness and profitability of directly imported new vehicles.
Progress towards this objective has been achieved by investing in or developing less correlated activities within the automotive value chain; or
businesses where our capabilities, experience and expertise enable us to grow at acceptable, sustainable rates of return in new markets and geographies.
- Non vehicle revenue and operating profit, including Regent, increased 8% to R48,9 billion (43% of Group revenue) and 14% to R3,7 billion (59% of Group
operating profit) respectively.
- Foreign revenue, including Regent, increased 17% to R41,1 billion (37% of Group revenue) and foreign operating profit, including Rest of Africa, increased
23% to R2,0 billion (32% of Group operating profit). Rest of Africa revenue, including Regent, increased 50% to R11,2 billion (10% of Group revenue) and
operating profit increased 60% to R835 million (13% of Group operating profit).
Environment
Despite signs of recovery in the second half of calendar 2014, global economic growth expectations for 2015 declined as developed markets recovered at a
slower pace than expected, China's growth slowed and smaller developing markets faced two transitions: lower commodity prices that are punishing
exporters; and US dollar strength (in anticipation of tightening monetary conditions) that is exerting pressure on capital inflows and therefore currencies.
South Africa was a victim of these developments with the fragility of the economy exacerbated by the electricity crisis and reflected in the skittish
consumption patterns of ordinary South Africans and the low confidence of investment decision makers. These were manifest in softer demand for Imperial's
products and services and aggressive competition on every front. Vehicle buyers were highly price sensitive trading down to smaller or pre-owned vehicles,
consumer goods volume growth was weak and bulk commodity volumes were in decline.
The slow recovery of the Eurozone and more specifically weak volumes in the industries that we serve in Germany, exerted pressure on Imperial's volumes,
rates and utilization. The region, including the United Kingdom where Imperial performed well, accounts for 24% of Group revenue and 18% of Group operating profit.
The higher growth of African economies in recent years is being muted by lower commodity prices and softer currencies. During the year these factors had
limited impact on the consumer and pharmaceutical markets in which we operate.
Strategy
Imperial's strategy seeks to drive capability-based growth and focused value creation through strategic clarity and financial discipline at Group and divisional
level.
The refinement of the Imperial portfolio remains an imperative in pursuit of growth, sharper executive focus and higher returns on capital and effort in the
medium term. This will be accomplished by disposing of assets that are non-core, strategically misaligned, underperforming or of low return on effort, while
acquiring mainly foreign businesses to offset the limited growth opportunities dictated by Imperial's position as a South African market leader in logistics and
motor vehicles.
Sustainability and quality of earnings will be assured by higher investment in people, systems and governance.
Divisional Performance
Logistics africa
% change % change % change
HY1 on HY1 HY2 on HY2 on
R million 2015 2014 2015 2014 2015 2014 2014
Revenue 13 265 22 12 082 8 25 347 22 090 15
Operating profit 802 23 785 27 1 587 1 270 25
Operating margin (%) 6,0 6,5 6,3 5,7
Return on Invested Capital (%) 10,7 12,0
Weighted average cost of capital (%) 8,2 8,8
In South Africa the division continued to perform satisfactorily in a testing environment, benefitting from operational efficiencies and its favourable market
position as the country's leading provider of end to end logistical solutions. New contract gains compensated for marginal or negative volume growth in the
mining, manufacturing and retail sectors.
The industrial logistics businesses servicing the manufacturing, mining, commodities, chemicals and construction industries experienced declining volumes,
which depressed revenue growth and operating margins.
The consumer logistics businesses showed muted revenue growth but good operating profit growth, due mainly to the acquisition of Pharmed and a
turnaround at Imperial Cold Logistics. Volume growth in our manufacturing client base is lacklustre.
The division's operations in the Rest of Africa continued their strong performance, with revenue and operating profit growing by 58% and 89% respectively,
supported by good volume growth and the contribution of strategically aligned acquisitions in the pharmaceuticals sector (Imres and Eco Health). The
division's strategy to be a significant distributor and logistics provider of consumer goods and pharmaceutical products in Southern, East and West Africa is
on track, with acquisitions performing in line or ahead of expectations.
The division incurred net capital expenditure of R1,0 billion (2014: R887 million), the increase mainly attributable to the transport fleet and property
investments.
We expect real growth of revenues and operating profit from the Logistics Africa division in 2016.
Logistics international
% change % change % change
HY1 on HY1 HY2 on HY2 on
Euro million 2015 2014 2015 2014 2015 2014 2014
Revenue 678 - 713 3 1 391 1 368 2
Operating profit 27 (13) 43 13 70 69 1
Operating margin (%) 4,0 6,0 5,0 5,0
R million
Revenue 9 595 5 9 476 (7) 19 071 19 249 (1)
Operating profit 386 (6) 572 2 958 971 (1)
Operating margin (%) 4,0 6,0 5,0 5,0
Return on Invested Capital (%) 8,2 7,7
Weighted average cost of capital (%) 6,3 6,5
Logistics International's operating profit in Euros was slightly up on the prior year, impacted by slow economic growth which suppressed volumes, rates and
utilization in most Eurozone logistics sectors. Revenue and operating profit were up 2% and 1% respectively in Euros.
This division showed an improved result in the second half, recording a 13% increase in operating profit in Euros. However, for the financial year, the
marginal increase in operating profit to €70 million was below expectations, impacted by a decline in dry freight rates in the European inland shipping
market and generally muted activity levels in most of our clients' sectors in Europe. The strengthening of the Rand against the Euro undermined the
Rand-denominated results.
Transport volumes across the German inland shipping industry were down and overcapacity depressed freight rates. The contract in South America, which
commenced in February 2014, is performing in line with expectations and contributed positively for the year.
Lehnkering, comprising road transport, warehousing, distribution and contract manufacturing of chemicals, experienced mixed results during the year.
Persistent drought conditions in the Western United States and lower volumes in the chemical manufacturing services business in Europe depressed the
manufacturing performance. This was offset by a good performance from the chemical transport, warehousing and distribution businesses.
Neska, the terminal operator, experienced declining volumes (mainly paper and dry bulk) due to increased competition and muted activity levels. The
intermodal business performed better, buoyed by improved container volumes.
Panopa, which provides parts distribution and in-plant logistics services to automotive, machinery and steel manufacturers, performed well in the second
half, recording good growth in revenue and operating profit. Despite good revenue growth from new contract gains for the year, margins were depressed by
high start-up costs and operational inefficiencies on a new project in the first half of the year.
Divisional net capital expenditure of R1,2 billion (2014: R1,1 billion) was incurred during the year. Most of this was invested in two additional convoys
commissioned during the year in support of a 10 year contract for the transport of iron ore from Brazil along the Rio Paraná to a steel mill in Argentina.
South American assets in operation now include four convoys with four push boats redeployed from Europe, together with 48 newly built barges. The
success of this contract is evidence of the division's ability to transfer core capabilities to new markets, which will continue to be a focus in the year ahead.
We expect real growth of revenues and operating profit in Euro's from the Logistics International division in 2016.
Vehicle import, distribution and dealerships
% change % change % change
HY1 on HY1 HY2 on HY2 2014 on
R million 2015 2014 2015 2014 2015 Restated 2014
Revenue 14 278 7 13 159 (4) 27 437 27 100 1
Operating profit 461 (51) 499 (15) 960 1 518 (37)
Operating margin (%) 3,2 3,8 3,5 5,6
Return on Invested Capital (%) 6,1 11,5
Weighted average cost of capital (%) 9,0 9,1
The Vehicle Import, Distribution and Dealerships division is an exclusive importer of 16 automotive and industrial vehicle brands (primarily Hyundai, Kia and
Renault), and a distributor and retailer through 129 owned and 111 franchised dealerships, including six in Australia and eight in sub-Saharan Africa.
As predicted, the division faced extremely challenging trading conditions during the year. The cost of new inventory escalated with the weakening of the
Rand and higher forward cover costs. Concurrently pricing power was eroded by the more favourable competitive position of local Original Equipment
Manufacturers (OEMs) who enjoy the advantage of the duty, rebate and cash benefits of the government's Automotive Production and Development
Programme (APDP) and can balance foreign currency purchases with export earnings. Together these factors depressed margins and unit volumes. Price
increases, adequate inventory levels and good levels of forward cover resulted in an improved performance in the second half, with operating profit
increasing by 8% and operating margins improving to 3,8% from 3,2% in the first half.
In South Africa, the division retailed 89 925 (2014: 90 937) new and 36 614 (2014: 35 739) pre-owned vehicles during the year. The division's South African
new vehicle registrations as reported to NAAMSA were 1% lower than the previous year, including Renault for a full 12 months compared to seven months
in the prior year. Excluding Renault, unit sales were down 11% year on year.
Annuity revenue streams generated from after-sales parts and service grew strongly with revenue from the rendering of services up 10% for the year. The
growing vehicle parc of our imported brands, now over 1 million, is delivering good levels of after-market activity for dealerships.
The industrial products and services business performed satisfactorily despite a declining forklift market and lower demand from the mining sector.
Divisional net capital expenditure increased by 20% to R1,2 billion (2014: R998 million) as a result of additional vehicles leased to car rental companies and
an increased investment in properties.
As communicated previously, historic high margins in this division were achieved through the convergence of specific positive economic, consumer, currency
and industry circumstances which are unlikely to occur in the future. Expected operating margins in future are likely to be closer to those of the current
financial year than to the average of the past five financial years. Moreover profits will decline in periods when the Rand depreciation rate relative to the
currencies in which we import vehicles is higher than the rate of South African new vehicle inflation.
In the absence of a marked deterioration of the Rand relative to our current forward cover position, we expect the Vehicle Import, Distribution and Dealerships
division to grow revenue and operating profit in 2016.
Vehicle retail, rental and aftermarket parts
% change % change % change
HY1 on HY1 HY2 on HY2 2014 on
R million 2015 2014 2015 2014 2015 restated 2014
Revenue 18 726 7 18 821 14 37 547 34 014 10
Operating profit 791 7 886 8 1 677 1 569 7
Operating margin (%) 4,2 4,7 4,5 4,6
Return on Invested Capital (%) 14,7 15,8
Weighted average cost of capital (%) 9,3 9,5
The Vehicle Retail, Rental and Aftermarket Parts division includes: 86 passenger vehicle dealerships franchising the products of 16 locally based OEM's; 22
commercial vehicle dealerships representing 12 brands in South Africa; 38 commercial vehicle dealerships and workshops in the United Kingdom; Car Rental
(comprising Europcar and Tempest); Auto Pedigree, the pre-owned vehicle retailer; Panel shops and Aftermarket Parts (comprising Midas, Alert Engine Parts
and Turbo Exchange).
The division continued to deliver good growth of revenue and operating profit during the year.
In South Africa, the vehicle retail businesses delivered a solid performance, retailing 30 641 (2014: 31 816) new and 31 484 (2014: 30 759) pre-owned
vehicles during the year. Despite lower new unit sales, passenger vehicle revenue grew due to an improved sales mix and new vehicle price inflation. The
latter drove motorists to pre-owned vehicles, which experienced moderate growth. Good expense management and a well streamlined network of
dealerships resulted in operating profit growth higher than revenue in the passenger vehicle business.
South Africa's medium commercial, heavy commercial and extra heavy vehicle markets experienced a softening of new retail unit sales on the prior year. As
a result, both revenue and operating profit in the local commercial vehicle business declined.
The United Kingdom commercial vehicle market grew strongly with the national truck market up 48% (i.e.the impact of Euro 6 suppressed 2014 sales volumes)
and the national light commercial vehicle market up 20%. Imperial's results were buoyed by this market growth and the acquisition of S&B Commercials, acquired
effective 1 September 2014. A weaker Rand enhanced the growth in Rands.
After sales parts and service revenue grew 20% (13% ex UK). Parts revenue growth resulted from both price and volume increases with continued growth
assured by the significant increase in new vehicle sales over recent years.
The car rental business experienced a difficult year with lower volumes in most segments. Highly challenging trading conditions included strong competition,
spending cuts by government and corporations, clients moving from single to dual supply contracts, and Uber. Revenue days declined, whilst utilization
improved by 2% on the prior year with the average fleet size 10% lower.
Unit sales at Auto Pedigree declined as banks tightened credit approval rates to consumers in lower income segments in response to the National Credit Act
amendments in April 2015. Panel shops delivered a disappointing result as revenue declined on the prior year, which included extraordinary hail repairs.
The Aftermarket Parts business revenue grew 8%, despite the increasingly tough market conditions and the switch to alternative, cheaper brands which put
pressure on margins and market share. Price increases as a result of the weakening Rand assisted revenue growth but operating income for the year was
flat.
Divisional net capital expenditure of R844 million was incurred (2014: R633 million) largely on the car rental fleet and property development.
We expect the Vehicle Retail, Rental and Aftermarket Parts division to produce single digit growth of revenues and operating profit in 2016.
Financial services
% change % change % change
HY1 on HY1 HY2 on HY2 on
R million 2015 2014 2015 2014 2015 2014** 2014
Motor Related Financial Services and Products
Revenue 658 17 771 28 1 429 1 166 23
Operating profit - restated 307 12 313 - 620 587 6
Operating margin (%)* 46,7 40,6 43,4 50,3
Insurance (discontinued operations)
Revenue 1 470 1 1 564 8 3 034 2 905 4
Operating profit 180 (27) 384 86 564 454 24
Adjusted investment income 87 (48) 121 12 208 276 (25)
Adjusted underwriting result 166 20 313 65 479 328 46
Intergroup eliminations** (73) 26 (50) (46) (123) (150) (18)
Operating margin (%) 12,2 24,6 18,6 15,6
Underwriting margin (%) 11,3 20,0 15,8 11,3
Return on Invested Capital (%) 32,3 31,4
Weighted average cost of capital (%) 11,6 12,2
* The operating margin for motor-related financial services and products benefits from investment income and profit share arrangements, including banking
alliances where we recognise profit, but for which there is no corresponding revenue.
** Regent has been classified as a discontinued operation. The accounting standards require that the continuing and discontinued operations are reflected
after adjusting for all intergroup transactions. These transactions relate to intergroup revenue, fees and cell captive incomes. The cell captive incomes
retained with the sale of Regent are now included in Motor Related Financial Services and Products and the 2014 result has been reclassified accordingly.
The division provides insurance products and services through Regent, maintenance and warranty products associated with the automotive market through
Liquid Capital, and vehicle leasing through Imperial Fleet Management and Ariva.
For the reasons outlined later in the report, negotiations for the sale of Regent are currently underway. Regardless of the outcome of these negotiations,
motor related financial services will remain an integral part of the Group's strategic focus on the full automotive value chain.
The underwriting performance in Regent's short term business benefited from more effective risk management resulting in improved loss ratios in the motor
comprehensive and commercial vehicle businesses. New business penetration of motor related value added products improved despite slowing vehicle
sales. Regent Life performed well with new business volume growth. Regional business beyond South Africa remained a meaningful contributor to the
division and performed to expectation. These factors together with Regent's decision to focus on its core markets and distribution channels, increased
underwriting profit by 46% with underwriting margins improving from 11,3% to 15,8%. Equity markets were less favourable when compared to the prior
year, resulting in lower investment returns on prudent equity positions.
Liquid Capital grew operating profit by 6%, despite more conservative impairment provisions in the vehicle financing alliances. The
advances generated through the alliances with financial institutions grew strongly, as did the funds held under service, maintenance, roadside assistance and
warranty plans, which grew by 10%. Innovative new products, improved retention and penetration rates in our sales channels also contributed positively to
the growth in these businesses, providing valuable annuity earnings to underpin future profits.
We continue to focus on growing the leasing business via Imperial Fleet Management, building synergies within the retail divisions. Ariva, a private leasing
alliance, had a difficult year as new business volumes declined in a tighter credit environment.
Net capital expenditure in the Motor Related Financial Services and Products division related mainly to vehicles for hire. In the current period, a net R649
million was invested in the fleet, compared to R224 million in the prior year when certain of these vehicles were leased through one of our banking
alliances. The duplication of Vehicles for hire held in both this division and the Vehicle Import, Distribution and Dealerships division is eliminated under head
office and eliminations.
Vehicle sales are expected to decline in the year ahead. Initiatives to drive direct sales and offer a differentiated value proposition to the market should
mitigate this and support revenue and operating profit growth, excluding Regent, in 2016.
Acquisitions
Pharmed
Effective 9 July 2014, the Logistics Africa division acquired 62,5% of the issued share capital of Pharmed for a cash consideration of R148 million. Pharmed is
a pharmaceutical wholesaler which generated turnover of R612 million and employs approximately 560 staff based in Durban and Johannesburg. It
purchases product from pharmaceutical companies and warehouses, distributes and sells to hospitals, private pharmacies and dispensing doctors. The
Pharmed acquisition augments Imperial Health Sciences in support of Imperial's strategy to integrate pharmaceutical wholesaling and distribution into its
service offering.
Imres
Effective 1 September 2014, the Logistics Africa division acquired a 70% interest in Imres, for a cash consideration of R647 million (46 million Euro).
Imres is a wholesaler of pharmaceutical and medical supplies to its client base which includes NGO's, hospitals and retailers. It operates in the international
medical relief industry, targeting mainly African and emerging countries with developing healthcare needs.
Imres plays a key role in the supply chain to end users and its service offering includes: sourcing, inbound logistics, supplier audits, quality control,
warehousing, distribution and transport coordination. Its product portfolio includes pharmaceuticals, medical kits, hospital equipment and related medical
products.
Imres adds sourcing and procurement capabilities to Imperial's service offering with the potential to leverage off Imperial's existing network and capabilities
on the African continent.
Imres has a capable, experienced management team and the organisational processes and structures necessary for pharmaceutical distribution. Founded in
1980, the company is headquartered in Lelystad in the Netherlands with a facility in India which provides support services and vendor qualification. Imres
has annual revenues of approximately R1,2 billion (88 million Euro).
S&B Commercials
Effective 1 September 2014, the Vehicle Retail, Rental and Aftermarket parts division acquired 100% of the issued share capital of S&B Commercials plc for a
cash consideration of R167 million (£9 million). S&B Commercials is a Mercedes Benz (Commercial and Van) and Fuso dealer in the UK with annual turnover
of approximately R1,7 billion (£96 million). The acquisition enhances our current dealer network by adding new territories to our Mercedes Benz footprint
while further diversifying our brand representation in the United Kingdom.
Disposals
Regent
On the 27th May 2015 shareholders were advised that Imperial has entered into exclusive negotiations for three months with The Hollard Insurance Group
and an associated party ("Hollard"), regarding the acquisition by Hollard of Imperial's interest in Regent Insurance Company Limited and Regent Life
Assurance Company Limited ("Regent").
While the business of Regent has grown strongly since its establishment, a large fast growing portion of Regent's revenue and profits are unrelated to the
Group's core vehicle and logistics businesses and enjoy no strategic, competitive or financial advantage from Imperial's ownership. Therefore, and consistent
with its espoused strategy to invest in its core capabilities, Imperial has decided to dispose of the business and insurance licenses of Regent. As motor-
related financial services remain core to the Group's strategy, the transaction will be structured to allow the Group to retain access to the income flows
generated by the distribution of vehicle-related insurance and value-added products through the Group's dealership network with the use of cell captives.
Since the issuing of the last cautionary renewal, the due diligence is progressing positively and the parties have agreed to extend the initial three month
exclusivity period to the end of September when shareholders will be advised of developments.
Cullinan investment
Imperial's investment in Cullinan shares was sold for R122 million.
Group financial performance (including discontinued operations)
Profit and loss
% change % change % change
HY1 on HY1 HY2 on HY2 on
R million 2015 2014 2015 2014 2015 2014 2014
Revenue 56 234 9 54 253 4 110 487 103 567 7
Operating profit 2 872 (9) 3 363 11 6 235 6 185 1
Operating margin (%) 5,1 6,2 5,6 6,0
Return on Invested Capital (%) 11,8 13,0
Weighted average cost of capital (%) 8,8 9,1
Revenue increased by 7% to R110,5 billion. Excluding current year acquisitions, revenue was up 3% but operating income declined 4%. Revenue for
continuing operations, excluding Regent, was R107,5 billion, up 7%.
Operating profit increased by 1% for the financial year to R6,2 billion, supported by a stronger second half performance and acquistions, which was up 17% on the
first half. Operating profit from continuing operations, excluding Regent, declined 1% to R5,7 billion. The Group operating margin reduced from 6,0%
to 5,6% mainly as a result of a R558 million operating profit decline in the Vehicle Import, Distribution and Dealership division.
Net finance costs increased 29% to R1,2 billion on increased debt levels and an increase in the Group's blended cost of debt. Increase in debt is due to
acquisitions, additional working capital and capital expenditure. Despite the higher net finance costs, interest covered by operating profit remains sound at
5.2 times (2014: 6.7 times).
Income from associates and joint ventures contributed R32 million (2014: R76 million). The decline was due mainly to the negative performance of
Ukhamba, resulting from the impairment of its investment in DAWN. The joint venture through which we import and distribute Chery and Foton products
(Chinese automotive brands) was under pressure and recorded losses in the current year. Mix Telematics, in which Imperial holds a 25,3% shareholding,
contributed R33 million, down 18% from the prior year.
The effective tax rate of 26,6% was slightly down compared to 27,2% in the prior year.
Net profit attributable to non-controlling interests (minorities) reduced from R355 million to R332 million. The increase in minorities as a result of the recent
acquisitions was more than offset by significantly lower profits from the Vehicle Import, Distribution and Dealerships division which has the most significant
minorities.
Earnings per share
2015 2014 % Change
Basic EPS (cents) 1 582 1 687 (6)
Diluted EPS (cents) 1 568 1 666 (6)
Basic HEPS (cents) 1 624 1 625
Diluted HEPS (cents) 1 609 1 606
Basic Core EPS (cents) 1 754 1 815 (3)
Diluted Core EPS (cents) 1 736 1 790 (3)
Reconciliation from Earnings to Headline and Core Earnings:
R million 2015 2014 % change
Net profit attributable to Imperial shareholders (earnings) 3 054 3 272 (7)
Profit on disposal of assets (85) (192)
Impairments of goodwill and other assets 95 84
Profit on sale of businesses (17) (74)
Other 84 17
Tax effects of re-measurements 13 42
Non-controlling interest (9) 2
Headline earnings 3 135 3 151 (1)
Amortisation of intangibles 415 336
Foreign exchange gain on intergroup monetary items (104) -
Future obligations under an onerous contract - 64
Charge for amending conversion profile of deferred ordinary shares - 70
Re-measurement of contingent considerations, put option liabilities and business
acquisition costs 63 20
Non-controlling interest and other (37) (3)
Tax effects (85) (119)
Core earnings 3 387 3 519 (4)
Attributable earnings in the prior year were enhanced by the profit on disposal of property, plant and equipment (R192 million) and the sale of the Tourism
businesses. Included in 'other' above is the loss on sale of shares and the impairment of Ukhamba's investment in DAWN which reduced attributable
earnings in the current year. This largely explains the year-on-year difference between attributable earnings of minus 7% versus headline earnings of minus
1%.
The major year on year difference between headline earnings and core earnings is the foreign exchange gain (once-off) on intergroup monetary items of
R104 million, partially offset by the additional amortisation of intangibles of R79 million. In the prior year the headline earnings were reduced by the
onerous contract provision in the Logistics International division and the charge for amending the conversion profile of the deferred ordinary shares.
Financial position
2014
2015 restated* %
Rm Rm change
Goodwill and intangible assets 7 193 6 766 6
Investment in associates and joint ventures 1 351 1 418
Property, plant and equipment 10 967 10 469
Transport fleet 5 610 5 322
Vehicles for hire 3 603 2 945 22
Investments and loans 357** 2 468 (86)
Net working capital 9 874*** 8 033 23
Other assets 1 428 1 516
Assets classified as held for sale 4 618
Net debt (14 493) (11 441) 27
Non-redeemable non-participating preference shares (441) (441)
Other liabilities (8 121) (8 946) (9)
Liabilities directly associated with assets classified as held for sale (2 713)
Total shareholders' equity 19 233 18 109
Total assets 65 712 59 021 11
Total liabilities 46 479 40 912 14
* Vehicles on rental to Car Hire companies were reclassified out of Inventory into Vehicles for hire.
** The descrease in Investments and loans relates to Regent's investments now classified as "held for sale".
*** Net working capital includes working capital arising from acquisitions and the prior year includes negative working capital of R929 million for
Regent.
Property plant and equipment increased by R498 million to R11,0 billion due mainly to investments in properties.
Goodwill and intangible assets rose to R7,2 billion as a result of the Imres, S&B Commercials and Pharmed acquisitions.
The transport fleet increased due to the R789 million expansion of the shipping fleet in the Logistics International division.
Motor vehicles for hire are up R658 million due to increases in forklifts and industrial equipment, demonstration vehicles and vehicles rented to other car
rental companies.
Net working capital as disclosed above, increased by 23%. After restating 2014 to exclude the Regent Insurance business, the increase is 11%. This is due to
acquisitions, increases in receivables and inventory, and a decrease in payables in the Logistics International business. As a result, our average net working
capital turn reduced to 13.0 times from 14.6 times in the prior year.
Total assets increased by 11% to R66,0 billion due mainly to acquisitions, higher levels of working capital and capital expenditure.
Net debt to equity (including preference shares as equity and including Regent's cash resources) at 69% was higher than the 62% at June 2014 due to the
increase in working capital, acquisitions and capital expenditure. In addition to higher debt levels, as noted below, this ratio was affected by a put option
liability of R473 million. The net debt level is within the target gearing range of 60% to 80%; the net debt to EBITDA ratio at 1.6 times (2014: 1.4 times)
remains prudent.
Shareholders' equity was impacted negatively by: a put option liability of R473 million relating to the minority shareholdings in Imres; the strengthening of
the Rand against the Euro, which resulted in a loss on the foreign currency translation reserve of R309 million; and a R93 million reduction resulting from
the re-measurement of defined benefit plans in the Logistics International division.
CASH FLOW
2014
2015 Restated* %
Rm Rm change
Cash generated by operations before movements in working capital 9 049 8 674 5
Movements in net working capital (50)** (2 701)
Cash generated by operations before capital expenditure on rental assets 8 999 5 973 51
Capital expenditure on rental assets (1 531) (811)
Interest paid (1 180) (926)
Tax paid (1 301) (1 267)
Cash flows from operating activities 4 987 2 969 68
Net new business acquisitions (938) (297)
Capital expenditure (non-rental assets) (2 988) (2 788)
Equities, investments and loans (1 025) 969
Dividends paid and share buy backs (1 780) (2 442)
Other (217) (383)
Increase in net debt (1 961) (1 972) -
Free Cash flow 4 514 2 138 111
* Vehicles on rental to Car Hire companies were reclassified out of Inventory into Vehicles for hire.
** Movements in net working capital exclude working capital arising from acquisitions.
Cash generated by operations before capital expenditure on rental assets was R9,0 billion compared to R6,0 billion in 2014. This was due mainly to more effective
working capital management. After interest, tax payments and capital expenditure on rental assets, net cash flow from operating activities increased to
R5,0 billion from R3,0 billion last year.
The main contributors to the net R938 million invested in new business acquisitions during the year were Imres, S&B Commercials and Pharmed.
Net replacement and expansion capital expenditure, excluding rental assets, was 7% higher, which included substantial investment by the Logistics
International division in the South American contract, investment in fleet in the Logistics Africa division and higher property investments by the South
African businesses.
Outflows from equities, investments and loans resulted mainly from Regent investing in foreign equities and longer term deposits.
Dividends amounting to R1,7 billion were paid during the year.
Liquidity
The Group's liquidity position is strong with R9,4 billion in unutilised facilities (excluding asset based finance facilities). Fixed rate debt represents 46% of
total debt and 73% is of a long term nature. The Group's credit rating as determined by Moody's was unchanged at Baa3 with a stable outlook.
Dividend
A final dividend of 445 cents per ordinary share (2014: 420 cents per share) has been declared.
Board changes
As announced on 7 May 2015, Mr. Thulani Gcabashe has elected to resign from the board of Imperial Holdings Limited at the conclusion of the AGM on the
3rd November 2015 pursuant to his appointment as Chairman of Standard Bank Group Limited. As announced yesterday, Dr Suresh Kana, recentpast Chief Executive
Officer of PwC, will be appointed as an independent non-executive director of Imperial Holdings Limited from the 1st September 2015 and as Chairman of the
board from Mr Gcabashe's resignation.
During the year the resignations of Messrs Brody, Riemann, Hiemstra and Engelbrecht were announced.
Messrs Peter Cooper and Graham Dempster were appointed on 24 February 2015, having enjoyed highly distinguished executive careers, most recently with
RMB Holdings and Nedbank respectively. Since then Mr Cooper has been appointed chair of the newly constituted Investment Committee and Mr Dempster a menber
of the Audit Committee.
As previously announced, after 13 years as an independent non-executive director and chairperson of the Audit Committee, Mr. Mike Leeming will retire
from the Board on 30th August 2015. He will be succeeded, effective 1st September 2015 by Mr. Moses Kgosana, a highly regarded member of the
accounting profession, who established and later merged his own firm with KPMG where in recent years he served as Chief Executive and Senior Partner.
Mr. Mohammed Akoojee will resign from the board of Imperial Holdings as an executive director on 30th September 2015 pursuant to his appointment as
Chief Executive Officer of the Rest of Africa sub division of Imperial Logistics Africa on 1st October 2015.
Prospects
The factors contributing to heightened uncertainty and volatility in economies, markets and industries globally are well publicised, as are the additional
consequences of unemployment, low growth and confidence, increasing socio-political tensions, and electricity supply failures facing South African business.
None of these are expected to change markedly in the short to medium term.
The factors most relevant to the fortunes of Imperial are: the weakening of the Rand against the currencies in which we import new vehicles; the poor state
of the South African economy; a much slower than expected recovery of the German economy; and the impact of political uncertainty and a sustained low
oil price on the economy and currency of Nigeria.
In the absence of a marked deterioration in the current conditions we expect Imperial to produce single digit growth of revenue and operation profit for continuing
operations in 2016. 2016 performance to date is in line with expectations.
The Group has embarked on various strategies to enhance the value added by Imperial Holdings and the competitiveness and sustainability of its
subsidiaries. We are confident that these initiatives will improve risk adjusted returns and unlock shareholder value in the medium term.
MARK J. LAMBERTI - Chief Executive Officer
OSMAN S. ARBEE - Chief Financial Officer
The forecast financial information herein has not been reviewed or reported on by Imperial's auditors.
Declaration of preference and ordinary dividends for the year ended 30 June 2015
Preference shareholders
Notice is hereby given that a gross final preference dividend of 380,51712 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%. The net preference dividend, to those shareholders who are not exempt from
paying dividend tax, is therefore 323,43955 cents per share.
The total number of preference shares in issue at the date of declaration is 4 540 041.
Ordinary shareholders
Notice is hereby given that a gross final ordinary dividend in the amount of 445 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 net ordinary dividend, to those shareholders who are not exempt from paying
dividend tax, is therefore 378,25 cents per share.
The total number of ordinary shares in issue at the date of declaration is 202 782 278.
The company has determined the following salient dates for the payment of the preference dividend and ordinary dividend:
2015
Last day for preference shares and ordinary shares respectively to trade cum-preference dividend and cum
ordinary dividend Thursday, 17 September
Preference and ordinary shares commence trading ex-preference dividend and ex-ordinary dividend respectively Friday, 18 September
Record date Friday, 25 September
Payment date Monday, 28 September
The company's income tax number is 9825178719.
Share certificates may not be dematerialised/rematerialised between Friday, 18 September 2015 and Friday, 25 September 2015, both days inclusive.
On Monday, 28 September 2015, 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 28 September 2015 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, 28 September
2015.
On behalf of the board
RA Venter
Group Company Secretary
24 August 2015
Auditor's report
These summarised consolidated financial statements for the year ended 30 June 2015 have been audited by Deloitte & Touche, who expressed an
unmodified opinion thereon. The auditor also expressed an unmodified opinion on the annual financial statements from which these summarised
consolidated statements were derived.
A copy of the auditor's report on the summarised consolidated financial statements and of the auditor's report on the annual consolidated financial
statements are available for inspection at the company's registered office, together with the financial statements identified in the respective auditor's
reports.
The auditor's report does not necessarily report on all of the information contained in these financial results. Shareholders are therefore advised that in order
to obtain a full understanding of the nature of the auditor's engagement, they should obtain a copy of the auditor's report together with the accompanying
financial information from the company's registered office.
Continuing and discontinued operations for the year ended 30 June 2015
As described on above the Group plans to dispose of its Insurance business. The Group expects that the fair value less cost to sell the business will be
higher than the aggregate carrying amount of the related assets and liabilities. Therefore, no impairment loss was recognised either on the reclassification
of the assets and liabilities as held for sale or at 30 June 2015.
The results of the Insurance businesses are presented in the statement of profit or loss as discontinued operations. The comparative profit or loss has been
re-presented accordingly. The assets and related liabilities of the Insurance business has been reclassified to 'Assets classified as held for sale' and 'Liabilities
directly associated with assets classified as held for sale' respectively on the statement of financial position.
The following table shows the combined results of the continuing and discontinued operations after eliminating inter-group transactions.
Total Continuing Discontinued Total Continuing Discontinued
operations operations operations operations operations* operations
% 2015 2015 2015 2014 2014 2014
change Rm Rm Rm Rm Rm Rm
Revenue 7 110 487 107 453 3 034 103 567 100 662 2 905
Net operating expenses (101 732) (99 290) (2 442) (95 091) (92 667) (2 424)
Profit from operations before depreciation
and recoupments 8 755 8 163 592 8 476 7 995 481
Depreciation, amortisation, impairments and
recoupments (2 520) (2 492) (28) (2 291) (2 264) (27)
Operating profit 1 6 235 5 671 564 6 185 5 731 454
Recoupments from sale of properties, net of
impairments 29 29 113 110 3
Amortisation of intangible assets arising on
business combinations (415) (415) (336) (336)
Other non-operating items (88) (80) (8) (155) (149) (6)
Profit before net finance costs (1) 5 761 5 205 556 5 807 5 356 451
Net finance costs 29 (1 194) (1 194) (926) (926)
Profit before share of result of associates
and joint ventures 4 567 4 011 556 4 881 4 430 451
Share of result of associates and joint
ventures 32 33 (1) 76 78 (2)
Profit before tax (7) 4 599 4 044 555 4 957 4 508 449
Income tax expense (1 213) (1 035) (178) (1 330) (1 171) (159)
Net profit for the year (7) 3 386 3 009 377 3 627 3 337 290
Net profit attributable to:
Owners of Imperial (7) 3 054 2 735 319 3 272 3 025 247
Non-controlling interests (6) 332 274 58 355 312 43
3 386 3 009 377 3 627 3 337 290
Earnings per share (cents)
- Basic (6) 1 582 1 416 166 1 687 1 559 128
- Diluted (6) 1 568 1 406 162 1 666 1 542 124
Headline earnings per share (cents)
- Basic 1 624 1 458 166 1 625 1 498 127
- Diluted 1 609 1 446 163 1 606 1 482 124
Core earnings per share (cents)
- Basic (3) 1 754 1 586 168 1 815 1 685 130
- Diluted (3) 1 736 1 571 165 1 790 1 664 126
* After restating for the change in accounting policy as described in note 2.1.
The major classes of assets and liabilities classified as held for sale at 30 June 2015 were as follows:
2015 2014
Rm Rm
Assets
Goodwill and intangible assets 122
Investment in associates and joint ventures 17
Property, plant and equipment 146
Income tax assets 20
Investments and other financial assets 3 250
Trade and other receivables 218
Cash resources 845
Assets classified as held for sale 4 618
Liabilities
Insurance and investment contracts 1 361
Income tax liabilities 197
Trade and other payables and provisions 1 155
Liabilities directly associated with assets classified as held for sale 2 713
Investments and other financial assets consists of listed investments of R2 288 million (level 1 financial instrument) and
fixed and negotiable deposits of R733 million (level 2 financial instrument) and reinsurance receivables of R229 million
at amortised cost.
The cash flows from discontinued operations were as follows:
Cash flows from operating activities 391 402
Cash flows from investing activities (1 103) 1 123
Cash flows from financing activities (31) (72)
Summarised consolidated statement of profit or loss for the year ended 30 June 2015
% 2015 2014*
Notes change Rm Rm
CONTINUING OPERATIONS
Revenue 7 107 453 100 662
Net operating expenses (99 290) (92 667)
Profit from operations before depreciation and recoupments 8 163 7 995
Depreciation, amortisation, impairments and recoupments (2 492) (2 264)
Operating profit (1) 5 671 5 731
Recoupments from sale of properties, net of impairments 29 110
Amortisation of intangible assets arising on business combinations (415) (336)
Other non-operating items 6 (80) (149)
Profit before net finance costs (3) 5 205 5 356
Net finance costs 7 29 (1 194) (926)
Profit before share of result of associates and joint ventures 4 011 4 430
Share of result of associates and joint ventures 33 78
Profit before tax (10) 4 044 4 508
Income tax expense (1 035) (1 171)
Profit for the year from continuing operations (10) 3 009 3 337
DISCONTINUED OPERATIONS
Profit for the year from discontinued operations 377 290
Net profit for the year (7) 3 386 3 627
Net profit attributable to:
Owners of Imperial 3 054 3 272
- Continuing operations 2 735 3 025
- Discontinued operations 319 247
Non-controlling interests 332 355
- Continuing operations 274 312
- Discontinued operations 58 43
3 386 3 627
Earnings per share (cents)
Continuing operations
- Basic (9) 1 416 1 559
- Diluted (9) 1 406 1 542
Discontinued operations
- Basic 30 166 128
- Diluted 31 162 124
Total operations
- Basic (6) 1 582 1 687
- Diluted (6) 1 568 1 666
* Restated for change in accounting policy as described in note 2.1 and re-presented for continuing and discontinued operations. To view the results of
total operations refer above.
Summarised consolidated statement of comprehensive income for the year ended 30 June 2015
2015 2014
Rm Rm
Net profit for the year 3 386 3 627
Other comprehensive income (268) 177
Items that may be reclassified subsequently to profit or loss (172) 133
Exchange (losses) gains arising on translation of foreign operations (312) 521
Share of associates' and joint ventures movement in foreign currency translation reserve 8 12
Movement in valuation reserve (87) 45
Reclassification of loss (gain) on disposal of available-for-sale investments 43 (1)
Movement in hedge accounting reserve 175 (420)
Share of associates' and joint ventures movement in hedge accounting reserve (14)
Income tax relating to items that may be reclassified to profit or loss 1 (10)
Items that will not be reclassified to profit or loss (96) 44
Remeasurement of defined benefit obligations (137) 64
Income tax on remeasurement of defined benefit obligations 41 (20)
Total comprehensive income for the year 3 118 3 804
Total comprehensive income attributable to:
Owners of Imperial 2 762 3 486
Non-controlling interests 356 318
3 118 3 804
Earnings per share information for the year ended 30 June 2015
% 2015 2014
change Rm Rm
Headline earnings reconciliation
Earnings - basic (7) 3 054 3 272
Saving of finance costs by associate on potential sale of Imperial shares 44 60
Earnings - diluted 3 098 3 332
Profit on disposal of property, plant and equipment (IAS 16) (85) (193)
Loss on disposal of intangible assets (IAS 38) 1
Impairment of property, plant and equipment (IAS 36) 28 39
Impairment of intangible assets (IAS 36) 7
Impairment of goodwill (IAS 36) 67 38
(Profit) loss on disposal of investments in associates and joint ventures (IAS 28) (2) 7
Profit on disposal of subsidiaries and businesses (IFRS 10) (15) (81)
Reclassification of loss (gain) on disposal of available-for-sale investment (IAS 39) 43 (1)
Remeasurements included in share of result of associates and joint ventures 41 18
Tax effects of remeasurements 13 42
Non-controlling interests share of remeasurements (9) 2
Headline earnings - diluted 3 179 3 211
Saving of finance costs by associate on potential sale of Imperial shares (44) (60)
Headline earnings - basic (1) 3 135 3 151
Headline earnings per share (cents)
Continuing operations
- Basic (3) 1 458 1 498
- Diluted (2) 1 446 1 482
Discontinued operations
- Basic 31 166 127
- Diluted 31 163 124
Total operations
- Basic 1 624 1 625
- Diluted 1 609 1 606
Core earnings reconciliation
Headline earnings - basic (1) 3 135 3 151
Saving of finance costs by associate on potential sale of Imperial shares 44 60
Headline earnings - diluted (1) 3 179 3 211
Amortisation of intangible assets arising on business combinations 415 336
Non-recurring foreign exchange gain on inter-group monetary item (104)
Net cost of meeting obligations under onerous contract 64
Business acquisition costs 16 22
Remeasurement of contingent consideration and put option liabilities 47 (2)
Change in economic assumptions on insurance funds 6 7
Charge for amending the conversion profile of deferred ordinary shares 70
Tax effects of core earnings adjustments (85) (119)
Non-controlling interests share of core earnings adjustments (43) (10)
Core earnings - diluted (4) 3 431 3 579
Saving of finance costs by associate on potential sale of Imperial shares (44) (60)
Core earnings - basic (4) 3 387 3 519
% change 2015 2014
Core earnings per share (cents)
Continuing operations
- Basic (6) 1 586 1 685
- Diluted (6) 1 571 1 664
Discontinued operations
- Basic 29 168 130
- Diluted 31 165 126
Total operations
- Basic (3) 1 754 1 815
- Diluted (3) 1 736 1 790
Additional information
Net asset value per share (cents) 7 9 696 9 037
Dividend per ordinary share (cents) (3) 795 820
Number of ordinary shares in issue (million)
- total shares 202,8 207,8
- net of shares repurchased 194,6 194,1
- weighted average for basic 193,1 193,9
- weighted average for diluted 197,6 200,0
Number of other shares (million)
- Deferred ordinary shares to convert into ordinary shares 8,3 9,1
Summarised consolidated statement of financial position at 30 June 2015
2015 2014* 2013*
Note Rm Rm Rm
ASSETS
Goodwill and intangible assets 8 7 193 6 766 5 206
Investment in associates and joint ventures 1 351 1 418 1 317
Property, plant and equipment 10 967 10 469 9 257
Transport fleet 5 610 5 322 4 626
Deferred tax assets 1 097 1 101 1 094
Investments and loans 357 2 468 3 218
Other financial assets 36 267 227
Vehicles for hire 3 603 2 945 2 929
Inventories 15 465 13 132 11 028
Tax in advance 295 148 439
Trade and other receivables 12 849 11 882 10 437
Cash resources 2 271 3 103 1 844
Assets classified as held for sale 4 618 94
Total assets 65 712 59 021 51 716
EQUITY AND LIABILITIES
Capital and reserves
Share capital and share premium 382 382 382
Shares repurchased (668) (220) (220)
Other reserves 1 089 1 149 1 023
Retained earnings 18 065 16 229 15 056
Attributable to owners of Imperial 18 868 17 540 16 241
Put arrangements over non-controlling interests (1 473) (1 000)
Non-controlling interests 1 838 1 569 1 295
Total equity 19 233 18 109 17 536
Liabilities
Non-redeemable, non-participating preference shares 441 441 441
Retirement benefit obligations 1 157 1 083 1 014
Interest-bearing borrowings 16 764 14 544 10 568
Insurance, investment, maintenance and warranty contracts 3 191 4 310 3 970
Deferred tax liabilities 1 193 1 355 1 498
Other financial liabilities 2 019 1 711 419
Trade and other payables and provisions 18 440 16 981 15 771
Current tax liabilities 561 487 453
Liabilities directly associated with assets classified as held for sale 2 713 46
Total liabilities 46 479 40 912 34 180
Total equity and liabilities 65 712 59 021 51 716
* Restated for the change in accounting policy as described in note 2.1.
Summarised consolidated statement of cash flows for the year ended 30 June 2015
% 2015 2014*
Note Change Rm Rm
Cash flows from operating activities
Cash generated by operations before movements in net working capital 9 049 8 674
Movements in net working capital (50) (2 701)
Cash generated by operations before capital expenditure on rental assets 51 8 999 5 973
Expansion capital expenditure - rental assets (772) (331)
Net replacement capital expenditure - rental assets (759) (480)
- Expenditure (2 496) (2 543)
- Proceeds 1 737 2 063
Cash generated by operations 45 7 468 5 162
Net finance cost paid (1 180) (926)
Tax paid (1 301) (1 267)
68 4 987 2 969
Cash flows from investing activities
Net acquisitions of subsidiaries and businesses (938) (297)
Expansion capital expenditure - excluding rental assets (1 743) (1 626)
Net replacement capital expenditure - excluding rental assets (1 245) (1 162)
Net movement in associates and joint ventures 178 (144)
Net movement in investments, loans and other financial instruments (1 203) 1 113
(4 951) (2 116)
Cash flows from financing activities
Hedge cost premium paid (128) (108)
Ordinary shares repurchased (2014 repurchased and cancelled) (56) (502)
Dividends paid (1 724) (1 940)
Change in non-controlling interests (90) (364)
Capital raised from non-controlling interests 1 89
Repayment of corporate bond (1 500)
Proceeds on the issue of corporate bonds 3 000
Net increase in other interest-bearing borrowings 487 1 805
(1 510) 480
Net (decrease) increase in cash and cash equivalents (1 474) 1 333
Effects of exchange rate changes on cash resources in foreign currencies 7 45
Cash and cash equivalents at beginning of year 898 (480)
Cash and cash equivalents at end of year 9 (163) (569) 898
* Restated for change in accounting policy as described in note 2.1.
Summarised consolidated statement of changes in equity for the year ended 30 June 2015
Put
Share arrangements
capital Attributable over Non-
and share Shares Other Retained to owners non-controlling controlling Total
premium re-purchased reserves earnings of Imperial interests interests equity
Rm Rm Rm Rm Rm Rm Rm Rm
At June 2013 382 (220) 1 023 15 056 16 241 1 295 17 536
Total comprehensive income for the year 170 3 316 3 486 318 3 804
Net attributable profit for the year 3 272 3 272 355 3 627
Other comprehensive income 170 44 214 (37) 177
Movement in statutory reserves 10 (10)
Share-based cost charged to profit or loss 101 101 3 104
Share-based equity reserve transferred to retained earnings on vesting (16) 16
Share-based equity reserve hedge cost utilisation (95) (95) (5) (100)
Charge for amending the conversion profile of the deferred ordinary shares 70 70 70
Ordinary dividend paid (1 618) (1 618) (1 618)
Repurchase and cancellation of 2 971 808 ordinary shares from the open market at an average price
of R168,85 per share (502) (502) (502)
Initial recognition of put option written over non-controlling interest (1 289) (1 289)
Share of changes in net assets of associates and joint ventures 91 91 91
Realisation on disposal of subsidiaries 29 (29)
Non-controlling interests acquired, net of disposals and shares issued (9) (9) 376 367
Net decrease in non-controlling interests through buy-outs (225) (225) 289 (96) (32)
Non-controlling interest share of dividends (322) (322)
At June 2014 382 (220) 1 149 16 229 17 540 (1 000) 1 569 18 109
Total comprehensive income for the year (199) 2 961 2 762 356 3 118
Net attributable profit for the year 3 054 3 054 332 3 386
Other comprehensive income (199) (93) (292) 24 (268)
Movement in statutory reserves 39 (39)
Share-based cost charged to profit or loss 126 126 4 130
Share-based equity reserve transferred to retained earnings on vesting 7 (7)
Share-based equity reserve hedge refund 7 7 (3) 4
Ordinary dividend paid (1 471) (1 471) (1 471)
Repurchase of 320 000 ordinary shares from the open market at an average price of R172,68 per share plus transaction cost (56) (56) (56)
Initial recognition of put option written over non-controlling interest* (473) (473)
Cancellation of 5 864 944 ordinary shares held by Lereko Mobility 665 (665)
Reallocation of prior year surplus on shares cancelled (1 057) 1 057
Share of changes in net assets of associates and joint ventures (5) (5) (5)
Realisation on disposal of subsidiaries 12 12 12
Non-controlling interests acquired, net of disposals and shares issued 208 208
Net decrease in non-controlling interests through buy-outs (47) (47) (43) (90)
Non-controlling interest share of dividends (253) (253)
At June 2015 382 (668) 1 089 18 065 18 868 (1 473) 1 838 19 233
* Initial fair value of the put option liability relating to the additional 30% that Imperial may acquire from the non-controlling shareholders of Imres.
Notes to the summarised consolidated financial statements
FOR THE YEAR ENDED 30 JUNE 2015
1. Basis of preparation
The 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 2015 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 Johannesburg Stock Exchange Limited and the Companies Act of South Africa, 2008.
These summarised consolidated financial statements are an extract from the full annual financial statements.
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 24 August 2015.
2. 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 of the annual financial statements for the year ended 30 June 2014 except for the change in
policy as detailed below.
2.1 Change in accounting policy
Vehicles held under buy-back arrangements
The vehicle importer businesses, included under Vehicle Import, Distribution and Dealerships, sell vehicles that are subject to buy-back arrangements.
These vehicles are accounted for as an operating lease over the period of the buy back arrangement lasting about one year. In prior years, they have
been accounted for as Inventory (IAS 2).
As these vehicles are not immediately available for sale and subject to operating leases, it is considered more appropriate to account for them as
items of Property, plant and equipment (IAS 16). The vehicles are included in Vehicles for hire on the statement of financial position.
This change in accounting policy resulted in a reallocation between line items on the statement of profit or loss, the statement of financial position
and on the statement of cash flows without affecting operating profit and total assets. The impact of the restatement on the comparative amounts
were as follows:
2014 2013
Statement of financial position Rm Rm
Increase in vehicles for hire 642 464
Decrease in inventories (642) (464)
Total assets
Statement of profit or loss
Continuing operations
Decrease in net operating expenses 106
Increase in depreciation, amortisation, impairments and recoupments (106)
Operating profit
Statement of cash flows
Increase in cash generated by operations before movements in working capital 106
Decrease in movements in net working capital 178
Increase in cash generated by operations before capital expenditure on rental assets 284
Increase in expansion capital expenditure - rental assets (194)
Increase in net replacement capital expenditure - rental assets (90)
- Increase in expenditure (584)
- Increase in proceeds 494
Cash generated by operations
2.2 Restatement of the segmental information
The 2014 segmental information has been restated to reflect the profit or loss for continuing operations only by excluding the Insurance segment, for
the change in accounting policy as described in note 2.1 and for the reallocation of the UK head office out of Head-Office and Eliminations to the
Vehicles Retail, Rental and After Market Parts segment.
The impact of the restatements were as follows:
Depreciation,
amortisation,
impairments
Operating and Net finance Pre-tax
Revenue profit recoupments costs profits
Segment profit or loss Rm Rm Rm Rm Rm
Vehicle Import, Distribution and Dealerships
Previously stated 27 100 1 518 239 360 1 165
Change in accounting policy (refer note 2.1) 162
As restated 27 100 1 518 401 360 1 165
Vehicle Retail, Rental and After Market Parts
Previously stated 33 997 1 559 561 272 1 363
Reallocation of UK head-office from Head Office and Eliminations 17 10 5 7 8
As restated 34 014 1 569 566 279 1 371
Motor-related Financial Services and Products
Previously stated 1 166 477 63 513
Continued access to cell captive arrangements with Regent 110 110
Associate classified as discontinued operations (7)
As restated 1 166 587 63 616
Operating Operating Net Net capital
assets liabilities debt expenditure
Segment financial position Rm Rm Rm Rm
Vehicle Import, Distribution and Dealerships
Previously stated 14 351 4 172 5 465 714
Change in accounting policy (refer note 2.1) 284
As restated 14 351 4 172 5 465 998
Vehicle Retail, Rental and After Market Parts
Previously stated 11 509 4 287 2 242 614
Reallocation of UK head-office from Head Office and Eliminations 313 11 178 19
As restated 11 822 4 298 2 420 633
2.3 New and amended accounting standards that became effective during the year
The Group applied the following amended statements during the year. None of the amendments has had a material impact on the consolidated
financial statements of the Group.
IAS 16 - Property plant and equipment (amended)
IAS 39 - Financial Instruments - Recognition and Measurements (amended)
IAS 19 - Employee Benefits (amended)
IFRS 2 - Share Based Payments (amended)
3. New and revised International Financial Reporting Standards in issue but not yet effective
The following standards will become applicable to the Group in future reporting periods:
IFRS 9 Financial Instruments (amended) - This standard will introduce new requirements for the classification and measurement of financial assets
and financial liabilities and for derecognition. It also introduces a new impairment model which follows a three-stage approach based on changes in
expected credit losses of a financial instrument. This standard becomes effective 1 January 2018.
IFRS 15 Revenue From Contracts With Customers establish the principles that an entity shall apply to report useful information to users of its financial
statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. This standard was
issued in May 2014 and replaces IAS 11 Construction contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the
Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC-31 Revenue - Barter Transactions Involving Advertising Services. The
standard becomes effective 1 January 2018.
The Group is in the process of assessing the impact of these standards on its consolidated financial statements.
4. Presentation of statement of profit or loss
To improve the content and format of the statement of profit or loss, certain items that are not operational in nature have been shown in total with
the details given in the note 6.
2015 2014
5. Foreign exchange rates
The following major rates of exchange were used in the translation of the Group's foreign operations:
SA Rand : Euro
- closing 13,55 14,51
- average 13,73 14,07
SA Rand : US Dollar
- closing 12,15 10,62
- average 11,44 10,38
2015 2014
Rm Rm
6. Other non-operating items
Remeasurement of financial instruments not held-for-trading (15) (28)
Foreign exchange gains (losses) on foreign currency monetary items 75 (31)
Charge for remeasurement of put option liabilities (49) (16)
Gains on remeasurement of contingent consideration liabilities 2 18
Reclassification of (loss) gain on disposal of available-for-sale investment (43) 1
Capital items (65) 13
Impairment of goodwill (66) (38)
Profit (loss) on disposal of investments in associates and joint ventures 2 (8)
Profit on disposal of subsidiaries and businesses 15 81
Business acquisition costs (16) (22)
Other items (134)
Net cost of meeting obligations under onerous contract (64)
Charge for amending the conversion profile of the deferred ordinary shares (70)
(80) (149)
2015 2014
Rm Rm
7. Net finance costs
Net interest paid (1 180) (926)
Fair value loss on interest-rate swap instruments (14)
(1 194) (926)
8. Goodwill and intangible assets
Goodwill
Cost 5 944 5 596
Accumulated impairments (926) (859)
5 018 4 737
Net carrying value at beginning of year 4 737 3 926
Net acquisition of subsidiaries and businesses 463 579
Impairment charge (67) (38)
Reclassifications to assets classified as held for sale (13)
Currency adjustments (102) 270
Net carrying value at end of year 5 018 4 737
Intangible assets 2 175 2 029
Goodwill and intangible assets 7 193 6 766
9. Cash and cash equivalents
Cash resources 2 271 3 103
Cash resources included in assets classified as held for sale 845
Short-term loans and overdrafts (Included in interest-bearing borrowings) (3 685) (2 205)
(569) 898
10. Fair value of financial instruments
10.1 Fair values of financial assets and liabilities carried at amortised cost
The following table sets out instances where the carrying amount of financial liabilities, as recognised on the statement of financial position, differ
from their fair values.
Carrying Fair
value value*
30 June 2015 Rm Rm
Listed corporate bonds (included in interest-bearing borrowings) 5 841 5 808
Listed non-redeemable, non-participating preference shares 441 345
* Level 1 financial instrument.
The fair values of the remainder of the Group's financial assets and financial liabilities approximate their carrying values.
10.2 Fair value hierarchy
The Group's financial instruments carried at fair value are classified in three categories defined as follows:
Level 1 financial instruments are those that are valued using unadjusted quoted prices in active markets for identical financial instruments.
Level 2 financial instruments are those valued using techniques based primarily on observable market data. Instruments in this category are valued
using quoted prices for similar instruments or identical instruments in markets which are not considered to be active; or valuation techniques where
all the inputs that have a significant effect on the valuation are directly or indirectly based on observable market data.
Level 3 financial instruments are those valued using techniques that incorporate information other than observable market data. Instruments in this
category have been valued using a valuation technique where at least one input, which could have a significant effect on the instrument's valuation,
is not based on observable market data.
The following table presents the valuation categories used in determining the fair values of financial instruments carried at fair value. For assets and
liabilities classified as held for sale refer above.
Total Level 2 Level 3
30 June 2015 Rm Rm Rm
Financial assets carried at fair value
Cross currency swap instrument (Included in Other financial assets) 36 36
Foreign exchange contracts (Included in Trade and other receivables) 85 85
Financial liabilities carried at fair value
Put option liabilities (Included in Other financial liabilities) 1 640 1 640
Contingent consideration liabilities (Included in Other financial liabilities) 31 31
Swap instruments (Included in Other financial liabilities) 233 233
Foreign exchange contracts (Included in Trade and other payables) 70 70
Transfers between hierarchy levels
The Group recognises transfers between levels of the fair value hierarchy as at the end of the reporting period during which the change has occurred.
There were no transfers between the fair value hierarchies during the year.
10.3 Movements in level 3 financial instruments measured at fair value
The following tables shows a reconciliation of the opening and closing balances of level 3 financial liabilities carried at fair value.
Contingent
Put option consideration
liabilities liabilities Total
Financial liabilities Rm Rm Rm
Carrying value at beginning of year 990 82 1 072
Initial recognition in equity for new acquisitions 473 473
Arising on acquisition of businesses 17 17
Fair valued through profit or loss 49 (2) 47
Settlements (64) (64)
Currency adjustments 128 (2) 126
Carrying value at the end of the year 1 640 31 1 671
Level 3 sensitivity information
The fair values of the level 3 financial liabilities of R1 671 million were estimated by applying an income approach valuation method including a
present value discount technique. The fair value measurement is based on significant inputs that are not observable in the market. Key assumptions
used in the valuations includes the assumed probability of achieving profit targets and the discount rates applied. The assumed profitabilities were
based on historical performances but adjusted for expected growth.
The following table shows how the fair value of the level 3 financial liabilities as at 30 June 2015 would change if the significant assumptions were
to be replaced by a reasonable possible alternative.
Increase in Decrease in
Valuation Carrying value liabilities liabilities
Financial instruments technique Key assumption Rm Rm Rm
Put option liabilities Income approach Earnings growth 1 640 21 (114)
Contingent consideration liabilities Income approach Assumed profits 31 (2)
2015 2014
Rm Rm
11. Contingencies and commitments
Capital commitments 2 289 2 285
Contingent liabilities 405 317
12. Disposals and acquisitions during the year
There were no material disposals during the year. For acquisitions during the year refer to business combinations below.
13. Events after the reporting period
Dividend declaration
Shareholders are advised that a preference and an ordinary dividend has been declared by the board of Imperial on 24 August 2015. For more details
please refer to the dividend declaration.
Business combinations during the year
Interest Purchase
Businesses acquired consideration
acquired Nature of business Operating segment Date acquired (%) Rm
Pharmed Pharmaceutical Wholesale supply and distribution Logistics Africa July 2014 62,5 148
(Pty) Limited of healthcare related products
Imres BV* Wholesaler of pharmaceutical and Logistics Africa September 2014 75 691
medical supplies to mainly African
and emerging markets
S&B Commercials plc Mercedes Benz commercial Vehicle Retail, Rental and September 2014 100 167
franchise business After Market Parts
Individually immaterial 70
acquisitions
1 076
* The Group subsequently decreased its interest in Imres BV to 70%.
Individually
S&B immaterial
Fair value of assets acquired and liabilities assumed at date of Pharmed Imres Commercials acquisitions Total
acquisition: Rm Rm Rm Rm Rm
Assets
Intangible assets 1 308 36 10 355
Property, plant and equipment 60 8 53 5 126
Transport fleet 5 14 19
Investments and loans 2 2
Inventories 194 126 434 7 761
Trade and other receivables 312 207 129 31 679
Cash resources 12 63 9 84
572 661 715 78 2 026
Liabilities
Retirement benefit obligations 1 1
Deferred tax liabilities 1 55 7 63
Interest-bearing borrowings 17 82 329 4 432
Trade and other payables and provisions 307 136 269 36 748
Current tax liabilities 9 9 1 1 20
334 282 606 42 1 264
Acquirees' carrying amount at acquisition 238 379 109 36 762
Non-controlling interests (101) (95) (3) (199)
Net assets acquired 137 284 109 33 563
Purchase consideration transferred 148 691 167 70 1 076
Cash paid 148 691 167 53 1 059
Contingent consideration 17 17
Excess of purchase price over net assets acquired 11 407 58 37 513
Reasons for the acquisitions
The Group acquired a 62,5% shareholding in Pharmed Pharmaceuticals (Pty) Limited. This acquisition is in line with the Group's strategy to integrate
pharmaceutical wholesaling and distribution into its service offering. Pharmed specialises in the wholesale supply and distribution of healthcare related
products, including ethical, generic, patent and homeopathic medicines; surgical, dental and veterinary products; and medical equipment.
The acquisition of 75% shareholding in Imres (5% of which was subsequently sold), is in line with the Group's strategy to expand its participation in the
distribution of fast moving consumer goods and pharmaceutical products in Africa. It also complements Imperial's acquisitions of Imperial Health Sciences,
Eco Health, Pharmed and the 49% equity interest in MDS Logistics. Imres adds sourcing and procurement capabilities to Imperial's service offering and it can
leverage off Imperial's existing network and capabilities on the African continent.
The Group acquired a 100% shareholding in S&B Commercials, a Mercedes Benz commercial vehicle dealership with 4 main sites that covers North London,
Essex and Hertfordshire and operates five dedicated customer workshops. The acquisition provided further diversification of our UK commercial vehicle
franchise portfolio into the Mercedes brand which continues to grow its share in the UK market in both heavy and light commercial vehicles.
The other businesses were acquired to complement and expand our distribution of motor vehicles parts, pharmaceuticals, transport and business solutions
and cleaning and hygiene services in South Africa, Africa and Europe.
Details of contingent consideration
The contingent consideration requires the Group to pay the vendors an additional total amount of R17 million over three years if the entities' net profit after
tax exceeds certain profit targets.
Acquisition costs
Acquisition costs for business acquisitions concluded during the year amounted to R14 million and have been recognised as an expense in the statement of
profit or loss in the 'Other non-operating items' line.
Impact of the acquisition on the results of the Group
From the dates of acquisition the businesses acquired during the year contributed revenue of R3 309 million, operating profit of R280 million and after tax
profit of R163 million. The after tax profit of R163 million includes the after tax impact of the funding cost of R27 million calculated on the cash
consideration paid on acquisitions, the fair value loss on the remeasurement of the put option liability of R13 million and the amortisation of intangible
assets arising out of the business combinations of R35 million.
Had all the acquisitions been consolidated from 1 July 2014, they would have contributed revenue of R3 700 million, operating profit of R320 million and
after tax profit of R192 million. The Group's continuing revenue for the year would have increased to R107 844 million, operating profit would have
increased to R5 711 million and after tax profit would have increased to R3 038 million. The after tax profit of R192 million includes the after tax impact of
the funding cost of R32 million calculated on the cash consideration paid on acquisitions, the fair value loss on the remeasurement of the put option liability
of R16 million and the amortisation of intangible assets arising out of the business combinations of R42 million.
Separate identifiable intangible assets
As at the acquisition date the fair value of the separate identifiable intangible assets was R355 million. This fair value, which is classified as a level 3
financial instrument was determined using the Multi-period Excess Earnings Method (MEEM) valuation technique.
The significant unobservable valuation inputs were as follows:
S&B
Imres BV Commercials
% %
- Discount rates 11,0 8,0
- Terminal growth rates 1,0 2,0
The assumptions used in arriving at projected cash flows were based on past experience and adjusted for any expected changes.
Other details
Trade and other receivables had gross contractual amounts of R730 million of which R51 million was doubtful. Non-controlling interests have been
calculated based on their proportionate share in the acquiree's net assets. None of the goodwill is deductible for tax purposes.
Segmental information
Vehicle Import, Vehicle Retail, Motor-related Head-Office
Logistics Logistics Distribution Rental and Financial Services and
Group Africa International and Dealerships After Market Parts and Products Eliminations
2015 2014^ 2015 2014 2015 2014 2015 2014^ 2015 2014^ 2015 2014^ 2015 2014^
Segment profit or loss - Continuing operations Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm
Revenue 107 453 100 662 25 347 22 090 19 071 19 249 27 437 27 100 37 547 34 014 1 429 1 166 (3 378) (2 957)
- South Africa 67 101 66 191 15 372 15 755 23 898 23 611 29 780 28 616 1 429 1 166 (3 378) (2 957)
- Rest of Africa 10 481 6 818 9 974 6 319 388 390 119 109
- International 29 871 27 653 1 16 19 071 19 249 3 151 3 099 7 648 5 289
Operating profit 5 671 5 731 1 587 1 270 958 971 960 1 518 1 677 1 569 620 587 (131) (184)
- South Africa 3 828 4 248 952 939 885 1 475 1 491 1 421 620 587 (120) (174)
- Rest of Africa 668 367 632 334 4 6 32 27
- International 1 175 1 116 3 (3) 958 971 71 37 154 121 (11) (10)
Depreciation, amortisation, impairments and
recoupments 2 878 2 490 924 773 739 765 546 401 662 566 117 63 (110) (78)
- South Africa 1 754 1 480 636 604 531 389 579 504 117 63 (109) (80)
- Rest of Africa 305 184 288 169 3 2 14 13
- International 819 826 739 765 12 10 69 49 (1) 2
Net finance costs 1 194 926 407 327 180 180 494 360 313 279 (200) (220)
- South Africa 825 652 281 265 473 341 271 255 (200) (209)
- Rest of Africa 135 70 126 62 3 3 6 5
- International 234 204 180 180 18 16 36 19 (11)
Pre-tax profits* 4 093 4 473 1 037 865 647 555 458 1 165 1 388 1 371 647 616 (84) (99)
- South Africa 2 893 3 593 661 677 399 1 135 1 260 1 256 647 616 (74) (91)
- Rest of Africa 404 219 373 191 5 6 26 22
- International 796 661 3 (3) 647 555 54 24 102 93 (10) (8)
Additional segment information - Continuing
operations
Analysis of revenue by type
- Sale of goods 63 966 57 497 8 216 4 964 23 441 23 475 32 308 29 057 1 1
- Rendering of services 43 487 43 165 17 008 17 005 19 070 19 222 2 295 2 218** 4 515 4 301 594 434 5 (15)
107 453 100 662 25 224 21 969 19 070 19 222 25 736 25 693 36 823 33 358 594 434 6 (14)
Inter-group revenue 123 121 1 27 1 701 1 407** 724 656 835 732 (3 384) (2 943)
107 453 100 662 25 347 22 090 19 071 19 249 27 437 27 100 37 547 34 014 1 429 1 166 (3 378) (2 957)
Analysis of depreciation, amortisation,
impairment and recoupments 2 878 2 490 924 773 739 765 546 401 662 566 117 63 (110) (78)
- Depreciation and amortisation 2 520 2 296 731 695 575 591 553 404 659 620 117 63 (115) (77)
- Recoupments and impairments (57) (142) (20) (46) (16) (19) (7) (3) (19) (73) 5 (1)
- Amortisation of intangible assets arising on
business combinations 415 336 213 124 180 193 22 19
Share of result of associates and joint ventures
included in pre-tax profits 33 78 34 40 25 31 (3) 9 33 26 27 29 (83) (57)
^ Restated as described in note 2.
* Defined in the glossary of terms.
** The 2014 revenue split has a misallocation between 'Rendering of services' and 'Inter-group revenue' of R140 million.
The revised figures are:
- Rendering of services - R2 078 million
- Inter-group revenue - R1 547 million
Vehicle Retail, Motor-related Head-Office
Logistics Logistics Vehicle Import, Distribution Rental and Financial Services and
Group Africa International and Dealerships After Market Parts and Products Eliminations Insurance
2015 2014 2015 2014 2015 2014 2015 2014^ 2015 2014^ 2015 2014^ 2015 2014^ 2015~ 2014
Segment financial position Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm Rm
Operating assets* 56 944 55 968 15 310 12 702 11 250 11 543 15 350 14 351 13 702 11 822 2 647 1 905 (1 315) (740) 4 385
- South Africa 34 312 35 081 9 034 8 225 13 885 12 809 10 113 9 797 2 647 1 905 (1 367) (873) 3 218
- Rest of Africa 6 557 5 903 6 275 4 476 201 198 81 62 1 167
- International 16 075 14 984 1 1 11 250 11 543 1 264 1 344 3 508 1 963 52 133
Fixed assets included in operating assets 20 180 18 736 5 308 5 060 4 682 4 358 5 103 4 476 4 982 4 961 997 469 (892) (724) 136
- Property, plant and equipment 10 967 10 469 2 096 1 739 2 244 2 319 3 346 3 210 3 313 3 348 9 9 (41) (292) 136
- Transport fleet 5 610 5 322 3 212 3 321 2 438 2 039 (40) (38)
- Vehicles for hire 3 603 2 945 1 757 1 266 1 669 1 613 988 460 (811) (394)
Operating liabilities* 23 167 22 802 5 512 4 649 4 304 4 512 5 594 4 172 5 263 4 298 3 468 3 141 (974) (542) 2 572
- South Africa 14 794 14 636 3 682 3 307 5 358 3 917 3 338 3 224 3 468 3 141 (1 052) (743) 1 790
- Rest of Africa 1 896 2 212 1 824 1 342 62 74 10 14 782
- International 6 477 5 954 6 4 304 4 512 174 181 1 915 1 060 78 201
Net working capital* 9 874 8 033 1 183 527 416 271 4 294 5 319 2 707 2 156 565 447 709 242 (929)
- South Africa 7 253 6 516 336 74 3 834 4 843 1 924 1 828 565 447 594 95 (771)
- Rest of Africa 924 343 852 453 62 52 11 (1) (1) (3) (158)
- International 1 697 1 174 (5) 416 271 398 424 772 329 116 150
Net debt* 14 493 11 882 4 872 3 778 4 150 4 062 4 661 5 465 3 089 2 420 (1 738) (2 002) (541) (202) (1 639)
- South Africa 7 763 6 771 2 669 2 344 4 185 4 921 2 199 2 052 (1 738) (2 002) 448 614 (1 158)
- Rest of Africa 2 454 1 166 2 209 1 433 194 183 51 31 (481)
- International 4 276 3 945 (6) 1 4 150 4 062 282 361 839 337 (989) (816)
Net capital expenditure 4 519 3 599 1 046 887 1 173 1 119 1 199 998 844 633 649 224 (500) (316) 108 54
- South Africa 2 856 1 978 711 666 1 182 792 710 560 649 224 (501) (316) 105 52
- Rest of Africa 369 250 335 221 8 1 23 26 3 2
- International 1 294 1 371 1 173 1 119 9 205 111 47 1
^ Restated as described in note 2.
* Defined in the glossary of terms.
~ The assets and liabilities of the Insurance business are shown as held-for-sale at 30 June 2015.
Glossary of terms
Net asset value per share equity attributable to owners of Imperial divided by total ordinary shares in issue net of
share repurchased (the deferred ordinary shares only participate to the extent of their par
value of 0,04 cents).
Net debt is the aggregate of interest-bearing borrowings, non-redeemable, non-participating
preference shares less cash resources.
Net working capital consists of inventories, trade and other receivables, trade and other payables and
provisions.
Operating assets total assets less loans receivable, tax assets, assets classified as held for sale and cash
resources in respect of non-financial services segments.
Operating liabilities total liabilities less non-redeemable, non participating preference shares, interest-bearing
borrowings, tax liabilities, put option liabilities and liabilities directly associated with
assets classified as held for sale.
Operating margin (%) operating profit divided by revenue.
Pre-tax profits calculated as profit before tax, impairment of goodwill and profit or loss on sale of
investment in subsidiaries, associates and joint ventures and other businesses.
Return on invested capital (%) return divided by invested capital. Return is calculated using profit after tax and share of
non-controlling interests, increased by the after-tax effects of net finance costs and
exceptional items. Invested capital is a 12-month average of shareholders equity plus
preference shares plus debt (long term and short term interest-bearing borrowings less
long term loans receivable) less non-financial services cash resources.
Weighted average cost of capital (WACC) (%) calculated by multiplying the cost of each capital component by its proportional weight,
therefore: WACC = (after tax cost of debt % multiplied by average debt weighting) +
(cost of equity multiplied by average equity weighting).
Corporate information
Directors (as at 30 June 2015)
TS Gcabashe# (Chairman), A Tugendhaft##, (Deputy Chairman), MJ Lamberti (Chief Executive), M Akoojee, OS Arbee, MP de Canha, P Cooper#,
GW Dempster#, T Dingaan#, P Langeni#, MJ Leeming#, PB Michaux, MV Moosa##, RJA Sparks#, JJ Strydom, M Swanepoel, Y Waja#
#Independent non-executive ##Non-executive
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 (Proprietary) Limited, 70 Marshall Street, Johannesburg, 2001
Sponsor
Merrill Lynch SA (Pty) Limited, 138 West Street, Sandown Sandton, 2196
The results announcement is available on the Imperial website: www.imperial.co.za
25 August 2015
Date: 25/08/2015 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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