Wrap Text
Preliminary summarised audited results for the year ended 30 June 2016
Imperial Holdings limited
Incorporated in the Republic of South Africa
Registration number: 1946/021048/06
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN: ZAE000088076
(‘Imperial’ or ‘Company’ or ‘Group’)
Preliminary summarised audited results for the year ended 30 June 2016
Imperial Holdings is a JSE listed, South African-based international Group of companies, active in two chosen areas of mobility:
- Logistics: consumer and industrial logistics which make up 40% and 42% of Group* revenue and operating profit respectively, with 71% of the operating
profit generated internationally; and
- Vehicles: vehicle import, distribution, dealerships, rental, aftermarket parts, and vehicle-related financial services, which make up 60% and 58% of Group*
revenue and operating profit respectively, with 11% of the operating profit generated internationally.
* Excluding Regent, head Office and eliminations
Imperial employs over 51 000 people who generate annual revenues in excess of R118 billion mainly in Africa and Europe.
Our performance
Group financial highlights
Revenue up 8% to R118,8 billion (42% foreign)
Operating profit up 3% to R6,4 billion (36% foreign)
Foreign revenue increased 23% to R49,7 billion (42% of group* revenue)
Foreign operating profit increased 18% to R2,2 billion (36% of group* operating profit)
EPS and core EPS unchanged at 1581 and 1747 cents per share respectively
HEPS down 3% to 1579 cents per share
Return on equity 15,6%
Full year dividend unchanged at 795 cents per share
Non-vehicle revenue increased 8% to R47,9 billion (40% of group* revenue)
Non-vehicle operating profit remained flat at R2,5 billion (42% of group* operating profit)
Return on invested capital 12,4%
Weighted average cost of capital 10,2%
Cash generated by operations of R9,0 billion
Net working capital increased by 7% to R9,9 billion
* Excluding Regent, head office and eliminations. Motor Related Financial Services now included in Vehicles.
Results overview
- Total revenue and operating profit for the Imperial Group grew 8% to R118,8 billion and 3% to R6,4 billion respectively, supported by the inclusion of the
Imres and S&B Commercials acquisitions for the full year, and strong performances from the Vehicle Import, Distribution and Dealerships division and the
Logistics Rest of Africa sub-division.
- Revenue and operating profit from continuing operations, excluding Regent, was up 8% to R115,7 billion and 4% to R5,9 billion respectively.
- The Group's operating margin from continuing operations remained stable at 5,1%.
- Foreign revenue increased 23% to R49,7 billion (42% of Group* revenue) and foreign operating profit increased 18% to R2,2 billion (36% of Group*
operating profit).
- Non-vehicle revenue increased 8% to R47,9 billion (40% of Group* revenue) and operating profit remained flat at R2,5 billion (42% of Group*
operating profit).
- A full reconciliation from earnings to headline earnings and core earnings is provided in the Group Financial Performance section.
- Cash flow from operating activities before capital expenditure on rental assets was R4,8 billion from R6,6 billion in the prior year.
- Net working capital from continuing operations increased 7% to R9,9 billion compared to the prior year, despite an 8% increase in turnover and the
higher increase in the Rand cost of imported vehicles, which increased the carrying value of inventory.
- The net debt to equity ratio (including preference shares as equity) increased from 66% in June 2015 to 73% at year-end (76% at December 2015).
* Excluding Regent, head office and eliminations. Motor Related Financial Services now included in Vehicles.
Environment
In April 2016 the IMF lowered its global growth forecasts for 2016 to 3,2% and 3,5% for 2017. With a footprint in more than 30 countries on 5 continents,
Imperial is affected by global and local economic conditions.
South Africa
The economy has tightened and the trading environment remains challenging in South Africa, where R66 billion or 58% of Group revenue and R3,7 billion
or 64% of Group operating profit was generated in the 12 months to June 2016. National GDP growth forecasts have been lowered to 0,1% in 2016 and
1,0% for 2017.
Specific factors that affected Imperial during the financial year were: a 27% decline in the average R/$ exchange rate; an 8% decline in national new
vehicle sales; a sharp decline in commodity, chemical and fuel volumes; declining consumer confidence and rising interest rates that depressed personal
consumption expenditure and consumer goods volumes.
Rest of Africa
Falling commodity demand, lower oil prices and the consequent impact on currencies and private consumption have reduced the growth rate in the Rest of
Africa, where R13,3 billion or 11% of Group revenue and R853 million or 14% of Group operating profit was generated in 2016. The weakness of the Rand
also assisted results.
Specific factors that affected Imperial during the financial year were: slowing growth rates, and currency volatility and devaluation.
Against this background we provide shareholders with current information on the Group's strategy and performance.
Eurozone and United Kingdom (UK)
A slow economic recovery continued and trading conditions were satisfactory in the Eurozone, where R36,4 billion or 31% of Group revenue and R1,3 billion
or 22% of Group operating profit was generated in 2016.
Specific factors that affected Imperial during the financial year were: low water levels that depressed the profitability of inland shipping in the first half; solid
UK economic growth; and the weakening of the Rand against the Pound and Euro, which assisted Rand denominated results for the UK and Eurozone
businesses.
Delivering on our investment case
Imperial strives to create long term value for stakeholders through strategic clarity, financial discipline, operational excellence and strictly defined capital
allocation principles.
Notwithstanding current environmental challenges, Imperial's investment thesis remains unchanged and steady progress as detailed below is being
registered with each of the following five capital allocation objectives:
1. To release capital and sharpen executive focus, by disposing non-core, strategically misaligned, underperforming or low return on effort assets.
- Although certain transactions are still subject to regulatory approval, businesses and assets to the value of R5,2 billion have been disposed.
R2,4 billion cash had been received by year end.
- Over the next twelve to eighteen months the Group intends disposing of mainly non-strategic properties (sale or sale and leaseback) in a number of
unrelated transactions in various jurisdictions amounting to R2,6 billion.
2. We will invest capital in South Africa to maintain the quality of assets and market leadership in our logistics and motor vehicle businesses.
- Various acquisitions have been made, the most notable being the 10% minority in AMH for R750 million, and a further 14% minority in Midas
for R112,5 million.
- In addition, R2,6 billion of capital was invested in South Africa in continuing operations.
3. We will invest capital in the Rest of Africa primarily to achieve our 2020 objective for the revenue and profits generated in that region to equal that of
our South African logistics business, and secondarily to expand our vehicle businesses in the region.
- Two small companies were acquired for R37 million.
- Vehicle distribution agreements were concluded in 6 African countries.
- Capital of R416 million was invested to sustain the high organic growth rate.
4. We will invest the cash generated from operations and divestments to grow our businesses beyond the continent, but with an emphasis on logistics.
- Logistics acquisitions included Van den Anker in Netherlands, a further 10% investment in Imres (Netherlands-based) in which we now own 80% and
post year-end we acquired 95% of Palletways for £155,1 million (R3,0 billion).
- Humberside Tail Lifts was acquired by our UK commercial vehicle business.
- Capital of R1,1 billion was invested outside of Africa, mainly in logistics in Europe and South America.
5. The development and sustainability of Imperial will be underpinned by investment in human capital and information systems.
- Group wide investments in human capital development and information systems amounted to R500 million.
Divisional performance
Logistics Africa
% change % change
HY1 on HY1 HY2 on HY2 % change
2016 2015 2016 2015 2016 2015 on 2015
Revenue (Rm) 13 714 3 13,405 11 27 119 25 347 7
Operating profit (Rm) 802 728 (8) 1 530 1 587 (4)
Operating margin (%) 5,9 5,5 5,6 6,3
Return on Invested Capital (%) 11,3 13,3*
Weighted average cost of capital (%) 10,0 8,3*
* restated to new calculation method. See glossary of terms.
In South Africa, challenging trading conditions continued to put pressure on the division's revenue and profitability due to soft volumes particularly in the
manufacturing, commodities, fuel and chemicals sectors. This was partially offset by new contract gains and pleasing performances from Resolve, Imperial
Managed Solutions and Imperial Health Sciences. While revenue was up 7%, operating profit declined 4%.
The industrial logistics businesses servicing the manufacturing, commodities, chemicals, fuel and construction industries continued to experience declining
volumes, which depressed revenue growth and operating profits.
The consumer logistics businesses recorded revenue growth but operating profit was depressed. This was due mainly to a new systems implementation, a
competitive environment and the underperformance of the Cold Logistics business resulting from under-utilisation of its facilities as customers experienced
lower demand.
Despite the challenging market conditions in South Africa, the business will continue to invest in people, capabilities and assets that will help deliver the
required returns for the group's shareholders. With a more asset-light strategy and a renewed focus on customers' needs and relationship development, the
business will add further impetus to its drive to develop customised solutions to better service clients and improve their efficiencies.
The division's operations in the Rest of Africa continued to perform strongly, with revenue and operating profit growing by 19% and 23% respectively,
despite challenging trading conditions that worsened in the second half of the year. Operating profit at R780 million exceeded that of the South African
logistics business for the first time. This performance was supported by volume growth, the contribution of our businesses in the pharmaceuticals sector, and
the inclusion of Imres for the full 12 months. The sub-division continues to expand in sub-Saharan Africa by leveraging its asset-light managed logistics
capabilities and extending its focus from traditional road transport to include cross-border and international logistics services and warehousing operations.
Expansion into new markets and partnerships with new principals during 2016 continued to deliver favourable results. The strategy to be a significant
provider of consumer goods and pharmaceutical products routes-to-market in Southern, East and West Africa is on track with acquisitions performing in line
with or ahead of expectations.
Net capital expenditure of R880 million was incurred (2015: R1,0 billion) in the Logistics Africa division, mainly attributable to the transport fleet and
property investments.
Logistics International
% change % change
HY1 on HY1 HY2 on HY2 % change
2016 2015 2016 2015 2016 2015 on 2015
Revenue (Rm) 10 306 7 10 487 11 20 793 19 071 9
Operating profit (Rm) 397 3 616 8 1 013 958 6
Operating margin (%) 3,9 5,9 4,9 5,0
Return on Invested Capital (%) 9,8 10,7*
Weighted average cost of capital (%) 6,7 6,4*
Revenue (Euro million) 688 2 610 (15) 1 298 1 391 (7)
Operating profit (Euro million) 27 36 (16) 63 70 (10)
Operating margin (%) 3,9 5,9 4,9 5,0
* Restated to new calculation method. See glossary of terms.
On the 1st July 2015 the business was restructured into two divisions focussing its service offerings: Imperial Transport Solutions and Imperial Supply Chain
Solutions. This has improved visibility and clarity for its client base, and together with a centralised sales capability, has already resulted in contract gains,
with opportunities for simplification and cost reduction being exploited.
Logistics International's revenue and operating profit in Euros declined 7% and 10% respectively, due mainly to strategic disposals (largely Neska and
Rijnaarde). However, adjusted for disposals and acquisitions, the division's Euro revenues and operating profit both increased by 4%. Other factors impacting
the results were slow economic growth which suppressed volumes, increased labour costs in certain of the automotive sites we serve and an unusually long
period of low water levels on European waterways in the first half. This was offset by contract gains and a growing contribution from the South American
inland shipping business. The weakening of the Rand against the Euro assisted the Rand-denominated results.
Net capital expenditure of R1,0 billion (2015: R1,2 billion) was incurred on additional capacity for the chemical manufacturing business and two additional
convoys commissioned during the year to meet the growing demand for inland waterway transport on the Rio Parana in South America. This business now
utilises five push boats with 60 barges, some redeployed from Europe, with two additional push boats with 24 barges expected to be commissioned later
this year. The success of this business is evidence of the division's ability to transfer core capabilities to new markets.
Vehicle Import, Distribution and Dealerships
% change % change
HY1 on HY1 HY2 on HY2 % change
2016 2015 2016 2015 2016 2015 on 2015
Revenue (Rm) 14 590 2 13 883 6 28 473 27 437 4
Operating profit (Rm) 532 15 617 24 1 149 960 20
Operating margin (%) 3,6 4,4 4,0 3,5
Return on Invested Capital (%) 7,2 6,4*
Weighted average cost of capital (%) 10,0 9,1*
* Restated to new calculation method. See glossary of terms.
Notwithstanding extremely challenging trading conditions and lower vehicle sales volumes during the year, revenue and operating profit increased by 4%
and 20% respectively, resulting in an improved operating margin of 4,0%.
The improved performance was seen in all three of our major exclusive imported brands (Hyundai, Kia and Renault). This was attributable to an expeditious
trade off of volume and margin, with the latter enhanced by assistance from OEM's, price increases and prudent currency hedging strategies.
Although the Rand was weaker against the Euro and more so against the US Dollar, the division achieved increased profitability on Euro-based products in
the first half. Forward cover on the US Dollar and Euro imports currently extends to April 2017.
In South Africa, the division retailed 81 930 (2015: 89 925) new and 38 418 (2015: 36 614) pre-owned vehicles during the year. The division's South African
new vehicle registrations as reported to NAAMSA were 9% lower than the previous year.
Annuity revenue streams generated from after-sales parts and service contributed positively with revenue up 4%. The growing vehicle parc of the imported
brands (over 1 million) is delivering good levels of after-market activity for the dealerships.
The newly established African operations contributed positively.
The Australian operations returned a strong performance off a low base, driven by increased unit sales due to the introduction of new brands and the
establishment of the multi-franchise model.
Net capital expenditure amounted to R1,3 billion (2015: R1,2 billion) as a result of additional vehicles leased to car rental companies and increased
investment in IT infrastructure.
Vehicle Retail, Rental and Aftermarket Parts
% change % change
HY1 on HY1 HY2 on HY2 % change
2016 2015 2016 2015 2016 2015 on 2015
Revenue (Rm) 20 790 11 20 255 8 41 045 37 547 9
Operating profit (Rm) 801 876 8 1 677 1 677
Operating margin (%) 3,9 4,3 4,1 4,5
Return on Invested Capital (%) 14,7 15,2*
Weighted average cost of capital (%) 11,0 9,6*
* Restated to new calculation method. See glossary of terms.
The division delivered a pleasing result with 9% revenue growth, while maintaining operating profit in challenging trading conditions.
In South Africa, the passenger and commercial vehicle divisions retailed 26 624 (2015: 30 641) new and 32 356 (2015: 31 484) pre-owned vehicles during
the year. The division's pre-owned to new vehicle ratio continues to increase, consistent with the tightening economy and in line with the broader market.
South Africa's passenger, medium commercial, heavy commercial and extra heavy vehicle markets experienced a reduction in new retail unit sales in line
with the market. As a result, both revenue and operating profit in this business declined, exacerbated by the sale of two commercial dealerships to Lereko
Motors, an associate BEE company. After sales parts and services increased operating profit by 4% from both price and volume increases as a result of the
strong new vehicle sales in the past three years.
The United Kingdom commercial vehicle market continued to grow strongly with the truck market up 11% and the light commercial vehicle market up 3%.
Results were supported by this market growth, the inclusion of S&B Commercials for 12 months and the recent acquisition of Humberside Tail Lifts which is
included for 8 months. A weaker Rand enhanced the growth in Rands.
During the year car rental, Auto Pedigree (pre-owned vehicle dealerships) and panel shops were placed under a single management team to facilitate
integration throughout the car rental, accident repair and resale value chain. Car rental increased its revenue and market share, supported by contract gains,
despite a challenging and competitive operating environment. Operating profit was adversely impacted by higher accident costs and lower profit on disposal
of the fleet compared to the prior year. Pre-owned unit sales grew by 4% despite higher interest rates and fragile consumer sentiment. Panel shops
profitability was positively impacted by the disposal of two loss-making outlets and higher car rental repair volumes.
The Aftermarket Parts business performed to expectation through improved revenue and flat operating profit. The Leisure business' performance was
hampered by a fire in the factory early in the financial year, although adequately insured.
Net capital expenditure of R779 million was incurred (2015: R844 million) largely on vehicles for hire and property development.
Financial Services
% change % change %
HY1 on HY1 HY2 on HY2 change
2016 2015 2016 2015 2016 2015 2015
Motor Related Financial Services
Revenue (Rm) 801 22 833 8 1 634 1 429 14
Operating profit (Rm) 336 9 333 (5) 669 620 8
Operating margin (%) 42,0 40,0 40,9 43,4
Insurance (discontinued operations)
Revenue(Rm) 1 565 6 1 546 3 3 111 3 034 3
Operating profit (Rm) 274 52 255 (30) 529 564 (6)
Adjusted investment income (Rm) 120 38 71 (41) 191 208 (8)
Adjusted underwriting result (Rm) 244 47 258 (18) 502 479 5
Reversal of depreciation from being held for sale
(Rm) - 44 44 - 100
Intergroup eliminations (Rm) (90) 23 (118) 110 (208) (123) 41
Operating margin (%) 17,5 16,5 17,0 18,6
Underwriting margin (%) 15,6 16,1 15,8
Despite lower vehicle sales, the Motor Related Financial Services business grew revenue and operating profit by 14% and 8% respectively. Innovative new
products and channels have improved retention and penetration rates. During the year, funds and policies held under service, maintenance, roadside
assistance and warranty plans were maintained. The book growth and returns from the alliances with financial institutions was tempered due to increased
impairment provisions and challenging economic conditions.
Regent is currently held for sale, subject to regulatory approvals. During the year Regent's underwriting result increased by 5% due mainly to the group
administration fees no longer being charged from the date of Regent's reclassification as a discontinued operation. Investment income decreased by 8% due
to a decline in equity markets.
On consolidation, the intergroup eliminations have increased due to the reversal of a higher profit participation in the cell captives by the group and, as no
administration fees were charged, there is no requirement to reverse administration fees in the current year.
The underwriting performance in Regent's short term business continued to benefit from more effective risk management resulting in improved loss ratios
in the heavy commercial vehicle business. New business penetration of motor related value added products remained under pressure due to declining
vehicle sales. Regent Life grew new business volumes. Regional business beyond South Africa remained a meaningful contributor to the division.
We continue to focus on growing the leasing business via Imperial Fleet Management and Ariva (Private leasing alliance) and building synergies within the
retail motor divisions to leverage scale for our customers.
Net capital expenditure of R228 million was incurred in the Motor Related Financial Services division (2015: R649 million), due mainly to vehicles for hire.
Disposals
Our strategy to dispose of non-core, strategically misaligned, underperforming or low return on effort assets gained momentum during the financial year.
The disposals described below, some still subject to regulatory approval, will generate proceeds of approximately R5,2 billion, which will reduce debt until
redeployed in accordance with our strategic and investment criteria. R2,4 billion has been received to date.
Regent
On 29th September 2015 we announced the disposal of Imperial's 100% interest in the Regent Group. Imperial accepted an offer from the Hollard Insurance
Group and Yellowwoods Group (the umbrella holding company of Hollard), to acquire the Regent Group, Regent Botswana and Regent Lesotho for a
purchase consideration of R2,2 billion.
The transaction has been approved by the Botswana competitions authorities. Conclusion of the transaction is now subject to regulatory approval from the
South African and Lesotho authorities.
Neska
The disposal of the 65% interest in Neska to Hafen und Guterverkehr Koln ('HGK'), the Port Authority in Cologne, Germany, for a total consideration of EUR
75 million (R1,3 billion) including loan repayments, was finalised on 11th December 2015.
Neska, a leading player in inland port operations in Europe, was facing growing competition and disintermediation from landlords (port owners). As a result,
Neska's growth prospects under Imperial's ownership were limited.
Goscor group
The disposal of the Group's 67,5% share of the Goscor group to management for a total consideration of R1,03 billion including loan repayments was
finalised on 5th February 2016.
Goscor, a former subsidiary of our Vehicle Import, Distribution and Dealership division, is an importer and distributor of industrial equipment, which we
regard as non-core to Imperial's logistics and vehicles businesses.
Other
During the year, the Vehicle Retail, Rental and Aftermarket Parts division disposed of two panel shop outlets and two commercial dealerships were sold to
Lereko Motors, an associate BEE company. The division also sold 6 dealerships: Honda Zambezi, Lindsay Saker Hyde Park, Rivonia and Krugersdorp, Mitsubishi
Bryanston and Mitsubishi/Hyundai in Kimberley.
Imperial Logistics International sold its 75% stake in ALS, a small shipping company, to the minority founder manager shareholders for EUR6 million (R84
million). The transaction was finalised on 27th January 2016.
In May 2016, the disposal of Imperial's minority stake in MixTelematics for R470 million was announced by MixTelematics, the proceeds from which are due
to be received by 30th August 2016.
Properties
Over the next twelve to eighteen months the Group intends disposing of mainly non-strategic properties (sale or sale and leaseback) in a number of
unrelated transactions in various jurisdictions amounting to R2,6 billion.
Acquisitions
During the 2016 financial year, various acquisitions were made, the most notable of which are listed below.
AMH
Imperial acquired the 10% minority in the AMH Group for R750 million, which was settled through an issue of Imperial shares and cash.
Midas
Imperial acquired a further 14% in Midas in its Vehicle Retail, Rental and Aftermarket Parts division during the year for R112,5 million.
Other acquisitions
- 100% of Teamcar, Maxifren, Fairdeal by Midas in South Africa
- 100% of Axnosis by Resolve in South Africa
- 70% of Imperilog Botswana
- 100% of Van den Anker by Logistics International (Netherlands)
- 100% of Humberside Tail Lifts by Vehicle Retail, Rental and Aftermarket Parts division (UK Commercial vehicles)
- A further 10% of Imres was acquired by Logistics Africa (now 80% owned)
Post year end acquisitions
Palletways
Imperial Mobility International B.V., a wholly-owned subsidiary of Imperial, acquired 95% of Palletways Group Limited, a leading European operator in the
express small consignment palletised freight market, for R3,0 billion (£155,1 million) which was settled through existing unutilised foreign credit facilities.
The loan portion is hedged in Pound Sterling. The transaction became effective on 5th July 2016.
Sasfin Premier Logistics
Logistics Africa acquired a 70% stake in Sasfin Premier Logistics. The deal was finalised on 6th July 2016.
Remaining 10% in Midas
A further 10% was acquired in Midas post year end. The group now owns 100% of Midas.
Post year end disposals
Disposal of small entities in AMH
The Group disposed of 51% (control) in 10 entities in the AMH Group to a related party for R75 million, subject to regulatory approval. The balance of the
shares in these entities will be sold in the next calendar year.
Group financial performance
Group profit and loss (extracts)
Total Continuing Discontinued Total Continuing Discontinued Total Continuing
R million 2016 2016 2016 2015 2015 2015 % Change % Change
Revenue 118 849 115 738 3 111 110 487 107 453 3 034 8 8
Operating profit 6 422 5 893 529 6 235 5 671 564 3 4
Operating margin (%) 5,4 5,1 17,0 5,6 5,3 18,6
Net finance costs (1 440) (1 440) (1 194) (1 194) 21 21
Income from
associates 133 133 32 33 (1) 316 303
Profit before tax 4 437 3 924 513 4 599 4 044 555 (4) (3)
Tax (1 229) (1 049) (180) (1 213) (1 035) (178) 1 1
Net profit after tax 3 208 2 875 333 3 386 3 009 377 (5) (5)
Attributable to
non-controlling
interests (159) (128) (31) (332) (274) (58) (52) (53)
Attributable to
shareholders of
Imperial 3 049 2 747 302 3 054 2 735 319 - -
Return on Invested
Capital (%) 12,4 13,1*
Weighted average cost
of capital (%) 10,2 9,0*
* Restated to new calculation method. See glossary of terms.
Total revenue increased by 8% to R118,8 billion (6% up excluding acquisitions) and for continuing operations (excluding Regent) by 8% to R115,7 billion.
Total operating profit increased 3% to R6,4 billion (1% up excluding acquisitions) and for continuing operations (excluding Regent) up by 4% to R5,9 billion.
The increase in operating profit was due mainly to solid performances from the Vehicle Import, Distribution and Dealerships division and the Logistics Rest of
Africa sub-division, which was assisted by the inclusion of Imres for a full year. S&B Commercials in the Vehicle Retail, Rental and Aftermarket Parts division
was also included for a full year.
Group operating margin, including discontinued operations, was slightly down at 5,4% (2015: 5,6%).
Net finance costs increased by 21% compared to the prior year on the back of increased debt levels and higher interest rates.
Income from associates and joint ventures for continuing operations increased by R100 million on the prior year. This increase is as a result of a loss of
R84 million recognised in respect of Ukhamba in the prior year.
The effective tax rate of 27,7% for continuing operations increased from 25,8% in 2015 due mainly to the increase in goodwill impairments which are not
tax deductible.
The Group's net profit attributable to non-controlling shareholders for continuing operations reduced by R146 million due to their share of impairment of
intangibles, reduced minority participation in Associated Motor Holdings and the sale of businesses in which the minorities participated.
Reconciliation from Earnings to Headline and Core Earnings:
R million 2016 2015 % change
Net profit attributable to Imperial shareholders (earnings) 3 049 3 054
Profit on disposal of assets (98) (85)
Impairments of goodwill and other assets 526 95
Profit on sale of businesses (520) (17)
Impairment losses on assets of disposal group 90
Other 2 84
Tax and non-controlling interests (3) 4
Headline earnings 3 046 3 135 (3)
Amortisation of intangibles 437 415
Foreign exchange gain on intergroup monetary items (92) (104)
Re-measurement of contingent consideration, put option liabilities and business
acquisition costs 117 69
Tax and non-controlling interests (139) (128)
Core earnings 3 369 3 387
Earnings, Headline Earnings and Core Earnings per Share
Group Group
Total Continuing Total Continuing Total Continuing
Cents 2016 2016 2015 2015 % Change % Change
Basic EPS 1 581 1 425 1 582 1 416 1
Basic HEPS 1 579 1 423 1 624 1 458 (3) (2)
Basic Core EPS 1 747 1 589 1 754 1 586
Financial position
R million 2016 2015 % change
Goodwill and intangible assets 7 501 7 193 4
Property, plant and equipment 11 465 10 967 5
Investment in associates and joint ventures 986 1 351 (27)
Transport fleet 5 953 5 610 6
Vehicles for hire 3 469 3 603 (4)
Investments and loans 291 357 (18)
Net working capital 9 936 9 267* 7
Other assets 1 867 1 428 31
Assets classified as held for sale 6 552 4 618 42
Net debt (16 079) (13 886)* 16
Non-redeemable non-participating preference shares (441) (441)
Other liabilities (8 584) (8 121) 6
Liabilities directly associated with assets classified as held for sale (3 114) (2 713) 15
Total shareholders' equity 19 802 19 233 3
Total assets 69 830 65 712 6
Total liabilities (50 028) (46 479) 8
* Restated to reclassify interest-bearing supplier liabilities as accounts payable of R607 million.
Goodwill and intangible assets rose by 4% to R7,5 billion as a result of Rand weakness and small acquisitions.
Property plant and equipment increased by R498 million to R11,5 billion due mainly to investments in properties during the year.
Investment in associates and joint ventures decreased by R365 million, as a result of the reclassification of MixTelematics to "assets classified as held for
sale".
The transport fleet increased by 6% or R343 million due mainly to the net investment in trucks and barges of R727 million, currency adjustments of R509
million resulting from a weaker Rand, reduced by depreciation of R778 million.
Vehicles for hire reduced by R134 million impacted by the sale of Goscor and Bobcat's rental assets of R696 million and a reduction in fleet units, offset
partly by price increases in vehicles for hire.
Net working capital increased by only 7% despite a higher increase in the Rand cost of imported vehicles.
Assets held for sale includes Regent and other businesses identified during 2016 as being available for sale.
Total assets increased by 6% to R69,8 billion due mainly to acquisitions, capital expenditure and currency adjustments.
Net debt to equity (including preference shares as equity and including Regent's cash resources) at 73% improved from 76% at December 2015 but was
higher than the 66% at June 2015. The increase in debt is due to a weaker exchange rate for the translation of the foreign debt into Rand, capital
expenditure, working capital requirements and acquisitions. Net debt to equity (including preference shares as debt) is 77% (2015: 70%).
The net debt level is within the target gearing range of 60% to 80%. The net debt to total EBITDA ratio was 1,7 times (2015: 1,5 times).
Shareholders' equity was impacted by the following major items:
Movement in shareholders' equity
R million 2016
Net profit attributable to Imperial shareholders 3 049
Net profit attributable to non-controlling interests 159
Increase in the foreign currency translation reserve 623
Shares issued to acquire 10% of AMH 648
A reduction in the hedge accounting reserve (317)
Re-measurement of defined benefit obligations (159)
Dividends paid (1 909)
Shares repurchased, acquired to hedge share appreciation rights & deferred bonus plan obligations (558)
Purchase of non-controlling interests:
AMH (750)
Imres (including re-measurement of put option) 98
Midas (113)
Other (150)
Other movements (52)
Total change 569
Cash flow
R million 2016 2015 % change
Cash generated by operations before movements in working capital 8 952 9 049 (1)
Movements in net working capital (excludes currency movements
& net acquisitions) (828) 9*
Interest paid (1 461) (1 180)
Tax paid (1 910) (1 301)
Cash flows from operating activities before capital expenditure on rental assets 4 753 6 577 (28)
Net capital expenditure on rental assets (1 611) (1 531) 5
Cash flows from operating activities 3 142 5 046 (38)
Net proceeds from sale of businesses (net of acquisitions) 760 (938)
Net capital expenditure (2 527) (2 988)
Equities, investments and loans 41 (1 025)
Dividends paid (1 909) (1 724)
Other (1 164) (273)
Increase in net debt (excludes currency movements & net acquisitions) (1 657) (1 902)*
Free cash flow 2 517 4 573
* Restated for the reclassification of interest-bearing accounts payable to accounts payable.
Cash generated by operations after working capital movements, interest charge and tax payments was R4,8 billion (2015: R6,6 billion).
Net working capital increased due to higher inventory in the Vehicle Import, Distribution and Dealerships division.
The main contributors to the net R760 million proceeds from sale of businesses (net of acquisitions) were the disposal of Neska, Goscor, ALS, two
dealerships and two panel shop outlets.
Inflows from equities, investments and loans amounted to R41 million. The prior year included additional investments in long term deposits and equities.
Dividends amounting to R1,9 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 44% of
total debt and 79% is of a long term nature. The Group's international scale credit rating as determined by Moody's was unchanged at Baa3 with a stable
outlook.
Final dividend
A final cash dividend of 425 cents per ordinary share (2015: 445 cents per share) has been declared, bringing F 2016 dividends to 795 cents per ordinary
share, unchanged from the prior year.
Board and organisation changes
As announced on 25 August 2015, Mr Suresh Kana, recent past Chief Executive Officer of PwC, was appointed as independent non-executive director of
Imperial Holdings Limited from 1st September 2015 and as Chairman of the board from 3rd November 2015.
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, was appointed as an independent non-executive director and chairperson of the Audit Committee
from 1st September 2015.
On 3rd November 2015, Mr Roddy Sparks, who has served as a director since August 2006, was appointed Lead Independent Director.
As announced on 3rd June 2016, the following are the major organisation changes and the resulting appointments that affect the executive directorate.
- Effective 1st July 2016 Imperial's entire logistics interests (i.e. Imperial Logistics South Africa, Imperial Logistics Rest of Africa and Imperial Logistics
International) are managed as one division. Mr Marius Swanepoel, an executive director of Imperial, was appointed Chief Executive Officer of the new
Logistics division from the same date.
- Effective 1st July 2016 Imperial's entire vehicle interests (i.e. Vehicle Import Distribution and Dealerships; Vehicle Retail Rental and Aftermarket Parts; and
Motor related Financial Services) will be managed as one division. From 1st July 2016 until 31st December 2016, Imperial's Group Chief Executive Officer,
Mr Mark Lamberti will be Executive Chairman of the division, leading and prioritising the necessary integration initiatives. On 1st January 2017, Mr Osman
Arbee, currently Imperial's Group Chief Financial Officer, will be appointed Chief Executive Officer of the newly created Vehicles division.
- Starting from 1st January 2017, Mr Arbee will facilitate an orderly transition which will result in Mr Mohammed Akoojee, currently Chief Executive Officer
of Imperial Logistics Rest of Africa, being appointed Imperial Holdings Group Chief Financial Officer on 1st April 2017.
From F 2017, the newly created Logistics and Vehicles divisions will be reported on as single entities with due regard to the disclosures and transparency
necessary to facilitate understanding and insight for shareholders.
The Logistics division will report segmentally on three sub-divisions, namely:
- Logistics South Africa;
- Logistics Rest of Africa; and
- Logistics International
The Vehicles division will report segmentally on two sub-divisions, namely:
- Import, Retail, Car Rental and Aftermarket Parts; and
- Motor Related Financial Services
Prospects
Imperial's performance for the financial year 2016 has been pleasing and reflects sound management of controllable factors under challenging
circumstances.
There is no reason to anticipate an improvement in the trading conditions facing Imperial in the short term. We expect volume growth throughout our
logistics operations to be subdued, and national new vehicle sales in South Africa to continue to decline in response to declining private consumption
expenditure, rising interest rates and tightening credit. In addition, the volatility of the Rand and the currencies in the countries in which we operate, and
the Group's hedging policy to cover forward, will affect both our competitiveness and profitability.
These uncontrollable factors make forecasting challenging but the expected sub-divisional segmental performance is as follows:
Logistics:
South Africa: Growth of revenues and operating profit
Rest of Africa: Growth of revenues and a decline in operating profit
International: Growth of revenues and operating profit, substantially from the Palletways acquisition
Vehicles:
Import, Retail, Car Rental and Aftermarket Parts: Flat revenue and a decline in operating profit.
Motor Related Financial Services: Flat revenue and operating profit
Therefore, our current outlook for Imperial Holdings' financial year to June 2017, including the impact of recent disposals, acquisitions and restructuring,
indicates single digit revenue growth and a moderate decline in operating profit for continuing operations.
We will continue to execute on our espoused strategies.
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 final preference and ordinary dividends
for the year ended 30 June 2016
Preference shareholders
Notice is hereby given that a gross final preference dividend of 425.77911 cents per preference share has been declared by the Board of Imperial, payable
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 361.91224 cents per share.
Ordinary shareholders
Notice is hereby given that a gross final ordinary dividend in the amount of 425.00000 cents per ordinary share has been declared by the Board of Imperial,
payable 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 361.25000 cents per share.
The company has determined the following salient dates for the payment of the preference dividend and ordinary dividend:
2016
Last day for preference shares and ordinary shares respectively to trade cum-preference Tuesday, 20 September
dividend and cum ordinary dividend
Preference and ordinary shares commence trading ex-preference dividend and ex-ordinary Wednesday, 21 September
dividend respectively
Record date Friday, 23 September
Payment date Monday, 26 September
Share certificates may not be dematerialised/rematerialised between Wednesday, 21 September 2016 and Friday, 23 September 2016, both days inclusive.
On Monday, 26 September 2016, 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 26 September 2016 will be posted on or about
that date. Shareholders who have dematerialised their shares will also have their accounts, held at their CSDP or Broker, credited on Monday, 26 September
2016.
On behalf of the board
RA Venter
Group Company Secretary
22 August 2016
Auditor's report
These summarised consolidated financial statements for the year ended 30 June 2016 have been audited by Deloitte & Touche, who expressed an
unmodified opinion thereon. The auditor also expressed an unmodified opinion on the 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 consolidated financial statements are
available for inspection at the company's registered office, together with the financial statement 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.
Presenting continuing and discontinued operations
The results of the Insurance businesses, which is in the process of being disposed, are presented in the summarised consolidated statement of profit or loss
as discontinued operations. The assets and related liabilities of the Insurance business have been reclassified to 'Assets of discontinued operations' and
'Liabilities of discontinued operations' respectively on the summarised consolidated statement of financial position. The assets and related liabilities of the
disposal group have been reclassified to 'Assets of other disposal groups' and 'Liabilities of other disposal groups' respectively on the summarised
consolidated statement of financial position. These assets include various businesses in the Logistics Africa, Vehicle Import Distribution and Dealership
division and the Vehicle Retail Rental and Aftermarket Parts division and a listed associate. The businesses will be recovered through disposal rather than
through continuing use.
The following shows the combined result of the continuing and discontinued operations after eliminating inter-group transactions.
The results of the businesses to be disposed are included in continuing operations.
TOTAL CONTINUING DISCONTINUED TOTAL CONTINUING DISCONTINUED
OPERATIONS OPERATIONS OPERATIONS OPERATIONS OPERATIONS OPERATIONS
% 2016 2016 2016 2015 2015 2015
change Rm Rm Rm Rm Rm Rm
Revenue 8 118 849 115 738 3 111 110 487 107 453 3 034
Net operating expenses (109 868) (107 286) (2 582) (101 732) (99 290) (2 442)
Profit from operations before
depreciation and recoupments 8 981 8 452 529 8 755 8 163 592
Depreciation, amortisation,
impairments and recoupments (2 559) (2 559) (2 520) (2 492) (28)
Operating profit 3 6 422 5 893 529 6 235 5 671 564
Recoupments from sale of
properties, net of impairments 28 28 29 29
Amortisation of intangible assets
arising on business combinations (437) (437) (415) (415)
Impairment of intangible assets
arising on business combinations (151) (151)
Other non-operating items (118) (102) (16) (88) (80) (8)
Profit before net finance costs 5 744 5 231 513 5 761 5 205 556
Net finance costs 21 (1 440) (1 440) (1 194) (1 194)
Profit before share of result of
associates and joint ventures 4 304 3 791 513 4 567 4 011 556
Share of result of associates and
joint ventures 133 133 32 33 (1)
Profit before tax (4) 4 437 3 924 513 4 599 4 044 555
Income tax expense (1 229) (1 049) (180) (1 213) (1 035) (178)
Net profit for the year (5) 3 208 2 875 333 3 386 3 009 377
Net profit attributable to:
Owners of Imperial 3 049 2 747 302 3 054 2 735 319
Non-controlling interests (52) 159 128 31 332 274 58
3 208 2 875 333 3 386 3 009 377
Earnings per share (cents)
- Basic 1 581 1 425 156 1 582 1 416 166
- Diluted (2) 1 540 1 388 152 1 568 1 406 162
Headline earnings per share (cents)
- Basic (3) 1 579 1 423 156 1 624 1 458 166
- Diluted (4) 1 538 1 386 152 1 609 1 446 163
Core earnings per share (cents)
- Basic 1 747 1 589 158 1 754 1 586 168
- Diluted (2) 1 702 1 548 154 1 736 1 571 165
Discontinued operations
The major classes of assets and liabilities classified at 30 June 2016 as held for sale were as follows:
2016 2015
Rm Rm
Assets
Goodwill and intangible assets 204 122
Investment in associates and joint ventures 40 17
Property, plant and equipment 164 146
Income tax assets 24 20
Investments and other financial assets 3 197 3 250
Trade and other receivables 217 218
Cash resources 1 237 845
Assets of discontinued operations 5 083 4 618
Liabilities
Insurance and investment contracts 1 384 1 361
Income tax liabilities 214 197
Trade, other payables and provisions 1 140 1 155
Liabilities of discontinued operations 2 738 2 713
Investments and other financial assets consists of:
Listed investments at fair value (level 1) 2 481 2 288
Fixed and negotiable deposits at fair value (level 2) 589 733
Reinsurance debtors at amortised cost 127 229
Total investments and other financial assets 3 197 3 250
The cash flows from discontinued operations were as follows:
Cash flows from operating activities 390 391
Cash flows from investing activities (30) (1 103)
Cash flows from financing activities (1) (31)
Summarised consolidated statement of profit or loss
For the year ended 30 June 2016
% 2016 2015
NOTES change Rm Rm
CONTINUING OPERATIONS
Revenue 8 115 738 107 453
Net operating expenses (107 286) (99 290)
Profit from operations before depreciation and recoupments 8 452 8 163
Depreciation, amortisation, impairments and recoupments (2 559) (2 492)
Operating profit 4 5 893 5 671
Recoupments from sale of properties, net of impairments 28 29
Amortisation of intangible assets arising on business combinations (437) (415)
Impairment of intangible assets arising on business combinations (151)
Other non-operating items 6 (102) (80)
Profit before net finance costs 5 231 5 205
Net finance costs 7 21 (1 440) (1 194)
Profit before share of result of associates and joint ventures 3 791 4 011
Share of result of associates and joint ventures 133 33
Profit before tax (3) 3 924 4 044
Income tax expense (1 049) (1 035)
Profit from continuing operations (4) 2 875 3 009
DISCONTINUED OPERATIONS
Profit from discontinued operations 333 377
Net profit for the year (5) 3 208 3 386
Net profit attributable to:
Owners of Imperial 3 049 3 054
- Continuing operations 2 747 2 735
- Discontinued operations 302 319
Non-controlling interests 159 332
- Continuing operations 128 274
- Discontinued operations 31 58
Earnings per share (cents)
Continuing operations
- Basic 1 1 425 1 416
- Diluted (1) 1 388 1 406
Discontinued operations
- Basic (6) 156 166
- Diluted (6) 152 162
Total operations
- Basic 1 581 1 582
- Diluted (2) 1 540 1 568
Summarised consolidated statement of comprehensive income
For the year ended 30 June 2016
2016 2015
Rm Rm
Net profit for the year 3 208 3 386
Other comprehensive income (loss) 147 (268)
Items that may be reclassified subsequently to profit or loss 306 (172)
Exchange gains (losses) arising on translation of foreign operations 607 (312)
Share of associates' and joint ventures movement in foreign currency translation reserve 16 8
Movement in valuation reserve (87)
Reclassification of loss on disposal of available-for-sale investments 43
Movement in hedge accounting reserve (374) 175
Income tax relating to items that may be reclassified to profit or loss 57 1
Items that will not be reclassified to profit or loss (159) (96)
Remeasurement of defined benefit obligations (228) (137)
Income tax on remeasurement of defined benefit obligations 69 41
Total comprehensive income for the year 3 355 3 118
Total comprehensive income attributable to:
Owners of Imperial 3 190 2 762
Non-controlling interests 165 356
3 355 3 118
Earnings per share information
For the year ended 30 June 2016
% 2016 2015
change Rm Rm
Headline earnings reconciliation
Earnings - basic 3 049 3 054
Saving of finance costs by associate on potential sale of Imperial shares 44
Earnings - diluted 3 049 3 098
Recoupment for disposal of property, plant and equipment (IAS 16) (97) (85)
Recoupment for disposal of intangible assets (IAS 38) (1)
Impairment of property, plant and equipment (IAS 36) 12 28
Impairment of intangible assets (IAS 36) 167
Impairment of goodwill (IAS 36) 258 67
Impairment (profit on disposal) of investments in associates and joint ventures (IAS 28) 89 (2)
Profit on disposal of subsidiaries and businesses (IFRS 10) (520) (15)
Impairment losses on assets of disposal groups 90
Reclassification of loss on disposal of available-for-sale investment (IAS 39) 43
Remeasurements included in share of result of associates and joint ventures 2 41
Tax effects of remeasurements 60 13
Non-controlling interests share of remeasurements (63) (9)
Headline earnings - diluted 3 046 3 179
Saving of finance costs by associate on potential sale of Imperial shares (44)
Headline earnings - basic (3) 3 046 3 135
Headline earnings per share (cents)
Continuing operations
- Basic (2) 1 423 1 458
- Diluted (4) 1 386 1 446
Discontinued operations
- Basic (6) 156 166
- Diluted (7) 152 163
Total operations
- Basic (3) 1 579 1 624
- Diluted (4) 1 538 1 609
Core earnings reconciliation
Headline earnings - basic (3) 3 046 3 135
Saving of finance costs by associate on potential sale of Imperial shares 44
Headline earnings - diluted (4) 3 046 3 179
Amortisation of intangible assets arising on business combinations 437 415
Foreign exchange gain on inter-group monetary item (92) (104)
Business acquisition costs 63 16
Remeasurement of contingent consideration and put option liabilities 50 47
Change in economic assumptions on insurance funds 4 6
Tax effects of core earnings adjustments (98) (85)
Non-controlling interests share of core earnings adjustments (41) (43)
Core earnings - diluted (2) 3 369 3 431
Saving of finance costs by associate on potential sale of Imperial shares (44)
Core earnings - basic (1) 3 369 3 387
2016 2015
Rm Rm
Core earnings per share (cents)
Continuing operations
- Basic 1 589 1 586
- Diluted (1) 1 548 1 571
Discontinued operations
- Basic (6) 158 168
- Diluted (7) 154 165
Total operations
- Basic 1 747 1 754
- Diluted (2) 1 702 1 736
ADDITIONAL INFORMATION
Net asset value per share (cents) 6 10 287 9 696
Dividend per ordinary share (cents) 795 795
Number of ordinary shares in issue (million)
- total shares 208,1 202,8
- net of shares repurchased 196,6 194,6
- weighted average for basic 192,9 193,1
- weighted average for diluted 198,0 197,6
Number of other shares (million)
- Deferred ordinary shares to convert into ordinary shares 7,5 8,3
Summarised consolidated statement of financial position
At 30 june 2016
2016 2015* 2014*
NOTE Rm Rm Rm
ASSETS
Goodwill and intangible assets 8 7 501 7 193 6 766
Investment in associates and joint ventures 986 1 351 1 418
Property, plant and equipment 11 465 10 967 10 469
Transport fleet 5 953 5 610 5 322
Deferred tax assets 1 376 1 097 1 101
Investments and loans 291 357 2 468
Other financial assets 8 36 267
Vehicles for hire 3 469 3 603 2 945
Inventories 16 717 15 465 13 132
Tax in advance 483 295 148
Trade and other receivables 12 712 12 849 11 882
Cash resources 2 317 2 271 3 103
Assets of discontinued operations 5 083 4 618
Assets of disposal group** 1 469
Total assets 69 830 65 712 59 021
EQUITY AND LIABILITIES
Capital and reserves
Share capital and share premium 1 030 382 382
Shares repurchased (1 226) (668) (220)
Other reserves 1 003 1 089 1 149
Retained earnings 19 418 18 065 16 229
Attributable to owners of Imperial 20 225 18 868 17 540
Put arrangement over non-controlling interests (1 307) (1 473) (1 000)
Non-controlling interests 884 1 838 1 569
Total equity 19 802 19 233 18 109
Liabilities
Non-redeemable, non-participating preference shares 441 441 441
Retirement benefit obligations 1 531 1 157 1 083
Interest-bearing borrowings 18 396 16 157 14 340
Maintenance and warranty contracts 3 156 3 191 4 310
Deferred tax liabilities 881 1 193 1 355
Other financial liabilities 2 335 2 019 1 711
Trade, other payables and provisions 19 493 19 047 17 185
Current tax liabilities 681 561 487
Liabilities of discontinued operations 2 738 2 713
Liabilities of disposal group** 376
Total liabilities 50 028 46 479 40 912
Total equity and liabilities 69 830 65 712 59 021
* Restated for the application of the change in accounting policy (see note 2.1).
** Assets and liabilities relating to other disposal groups. The results of the other disposal groups are included in the results of
continuing operations.
Summarised consolidated statement of cash flows
For the year ended 30 June 2016
% 2016 2015*
NOTE change Rm Rm
Cash flows from operating activities
Cash generated by operations before movements in net working capital 8 952 9 049
Movements in net working capital (828) 9
Cash generated by operations before interest and taxes paid (10) 8 124 9 058
Net finance costs paid (1 461) (1 180)
Tax paid (1 910) (1 301)
Cash generated by operations before capital expenditure on rental assets 4 753 6 577
Expansion capital expenditure - rental assets (772) (772)
Net replacement capital expenditure - rental assets (839) (759)
- Expenditure (3 539) (2 496)
- Proceeds 2 700 1 737
Cash generated by operations after capital expenditure on rental assets (38) 3 142 5 046
Cash flows from investing activities
Net disposals (acquisitions) of subsidiaries and businesses 760 (938)
Expansion capital expenditure - excluding rental assets (1 130) (1 743)
Net replacement capital expenditure - excluding rental assets (1 397) (1 245)
Net movement in associates and joint ventures 71 178
Net movement in investments, loans and other financial instruments (30) (1 203)
(1 726) (4 951)
Cash flows from financing activities
Hedge cost premium paid (193) (128)
Ordinary shares repurchased (558) (56)
Dividends paid (1 909) (1 724)
Change in non-controlling interests# (439) (90)
Capital raised from non-controlling interests 26 1
Net increase in other interest-bearing borrowings 2 193 831
(880) (1 166)
Net increase (decrease) in cash and cash equivalents 536 (1 071)
Effects of exchange rate changes on cash resources in foreign currencies 145 7
Cash and cash equivalents at beginning of year 38 1 102
Cash and cash equivalents at end of year 9 719 38
* Restated for the application of the change in accounting policy (see note 2.1).
# The 4 559 221 ordinary shares issued to acquire the remaining interest in Associated Motor Holdings (Pty) Limited and
Boundlesstrade 154 (Pty) Limited was treated as non-cash flow.
Summarised consolidated statement of changes in equity
For the year ended 30 June 2016
PUT
ARRANGEMENT
SHARE OVER
CAPITAL SHARES ATTRIBUTABLE NON- NON-
AND SHARE RE- OTHER RETAINED TO OWNERS CONTROLLING CONTROLLING TOTAL
PREMIUM PURCHASED RESERVES EARNINGS OF IMPERIAL INTERESTS INTERESTS EQUITY
Rm Rm Rm Rm Rm Rm Rm Rm
At 30 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 cost 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)
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
Initial recognition of put option written over non-controlling interest (473) (473)
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 interests share of dividends (253) (253)
At 30 June 2015 382 (668) 1 089 18 065 18 868 (1 473) 1 838 19 233
Total comprehensive income for the year 300 2 890 3 190 165 3 355
Net attributable profit for the year 3 049 3 049 159 3 208
Other comprehensive income 300 (159) 141 6 147
Movement in statutory reserves 20 (20)
Share-based cost charged to profit or loss 144 144 4 148
Share-based equity reserve transferred to retained earnings on vesting (55) 55
Share-based equity reserve hedge cost (183) (183) (183)
Ordinary dividend paid (1 572) (1 572) (1 572)
Repurchase of 3 387 507 shares from the open market at an average price of R164.78 per share,
plus transaction cost (558) (558) (558)
Share of changes in net assets of associates and joint ventures (5) (5) (5)
Realisation on disposal of subsidiaries 59 59 59
Non-controlling interests disposed, net of acquisitions and shares issued (71) (71)
Net decrease in non-controlling interests through buy-outs* 648 (366) 282 166 (715) (267)
Non-controlling interest share of dividends (337) (337)
At 30 June 2016 1 030 (1 226) 1 003 19 418 20 225 (1 307) 884 19 802
* Includes the issue of 4 559 221 ordinary shares at an average market price of R142 per share to the non-controlling shareholder of Associated Motor Holdings (Pty) Limited and Boundlesstrade 154
(Pty) Limited as consideration for its 10% shareholding.
Notes to the summarised consolidated financial statements
For the year ended 30 June 2016
1. Basis of preparation
The summarised consolidated financial statements have been prepared in accordance with the framework concepts and 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 2016 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 preliminary 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 of the full audited consolidated annual financial
statements.
These summarised consolidated financial statements and the full audited consolidated annual financial statements have been
prepared under the supervision of R Mumford, CA (SA) and were approved by the board of directors on 22 August 2016.
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 audited consolidated annual financial statements for
the year ended 30 June 2015, except for the change detailed below.
2.1 Change in accounting policy
Floorplans
During the year the Group reclassified its interest-bearing trade payables, due to vehicle suppliers, from interest-bearing
borrowings to trade and other payables. As the interest-bearing amounts are a short-term credit line received from vehicle
suppliers to acquire vehicles as inventory it is considered more appropriate to show them as trade payables.
The impact of the change in policy on the comparative amounts was as follows:
2014 2015
STATEMENT OF FINANCIAL POSITION Note Rm Rm
Decrease in interest-bearing borrowings (204) (607)
Increase in trade, other payables and provisions 204 607
Total liabilities
Statement of cash flows
Cash flows from operating activities
Increase in cash generated by operations before movements in working capital
Decrease in movements in net working capital 59
Increase in cash generated by operations before interest and taxes paid 59
Cash from operating activities 59
Cash flows from financing activities
Net increase in other interest-bearing borrowings 344
Cash flow from financing activities 344
Net increase in cash and cash equivalents 403
Increase in cash and cash equivalents at beginning of year 204
Increase in cash and cash equivalents at end of year 9 607
2.2 Restatement of the segmental information
The 2015 segmental information for the Vehicle retail, rental and after market parts division has been restated as follows:
OPERATING NET WORKING NET
LIABILITIES CAPITAL DEBT
Rm Rm Rm
Previously stated 5 263 2 707 3 089
Restated for floorplans 607 (607) (607)
As restated 5 870 2 100 2 482
3. New and revised International Financial Reporting Standards in issue but not yet effective
IFRS 16 Leases introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases
with a term longer than 12 months. A lessee is required to recognise a right-of-use asset representing its right to use the
underlying leased asset and a lease liability representing its obligation to make lease payments. Depreciation is recognised on
the right-of-use asset and interest on the lease liability. In terms of lessor accounting IFRS 16 substantially carries forward the
requirements in IAS 17 Leases and accordingly a lessor continues to account for its leases as operating leases or finance leases.
Issued in January 2016 this standard becomes effective for annual reporting periods beginning on or after 1 January 2019.
Other standards that will become applicable to the group in future reporting periods includes IFRS 9 Financial Instruments
(effective 1 January 2018) and IFRS 15 Revenue from Contracts with Customers (effective 1 January 2018). The details of these
standards is outlined in the 30 June 2016 audited consolidated annual financial statements.
The group is in the process of assessing the impact of these standards on its consolidated financial statements.
4. New headline earnings circular
Circular 2/2015 Headline Earnings which was issued by the South African Institute of Chartered Accountant (SAICA) in October
2015 replaces Circular 2/2013 Headline Earnings. The revisions contained in the new circular relate primarily to IFRS 9 Financial
Instruments and has had no impact on the way the Group computes headline earnings.
2016 2015
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 16,31 13,55
- average 16,10 13,73
SA Rand : US Dollar
- closing 14,70 12,15
- average 14,51 11,44
6. Other non-operating items
Remeasurement of financial instruments not held-for-trading (122) (15)
Foreign exchange (loss) gain on foreign currency monetary items (72) 75
Charge for remeasurement of put option liabilities (64) (49)
Gains on remeasurement of contingent consideration liabilities 14 2
Reclassification of loss on disposal of available-for-sale investments (43)
Capital items 20 (65)
Impairment of goodwill (258) (66)
(Impairment) profit on disposal of investments in associates and joint ventures (89) 2
Profit on disposal of subsidiaries and businesses 520 15
Impairment losses on assets of disposal group (90) -
Business acquisition costs (63) (16)
(102) (80)
7. Net finance costs
Net interest paid (1 462) (1 180)
Fair value gain (loss) on interest-rate swap instruments 22 (14)
(1 440) (1 194)
8. Goodwill and intangible assets
Goodwill
Cost 6 286 5 944
Accumulated impairments (862) (926)
5 424 5 018
Carrying value at beginning of year 5 018 4 737
Net (disposal) acquisition of subsidiaries and businesses (130) 463
Impairment charge (258) (67)
Reclassified to assets held for sale (28) (13)
Currency adjustment 822 (102)
Carrying value at end of year 5 424 5 018
Intangible assets 2 077 2 175
Goodwill and intangible assets 7 501 7 193
9. Cash and cash equivalents#
Cash resources 2 317 2 271
Cash resources included in assets of discontinued operations and of disposal groups 1 356 845
Short-term loans and overdrafts (Included in interest-bearing borrowings) (2 954) (3 078)
719 38
# Restated for the change in accounting policy (see note 2.1).
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
VALUE FAIR VALUE*
30 JUNE 2016 Rm Rm
Listed corporate bonds (included in interest-bearing borrowings) 5 348 5 278
Listed non-redeemable, non-participating preference shares 441 345
* Level 1 of the fair value hierarchy.
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 financial assets of discontinued operations refer above.
TOTAL LEVEL 2 LEVEL 3
30 JUNE 2016 Rm Rm Rm
Financial assets carried at fair value
Interest-rate swap instruments (Included in Other financial assets) 8 8
Foreign exchange contracts and other derivative instruments
(Included in Trade and other receivables) 44 44
Financial liabilities carried at fair value
Put option liabilities (Included in Other financial liabilities) 1 875 1 875
Contingent consideration liabilities (Included in Other financial liabilities) 19 19
Swap instruments (Included in Other financial liabilities) 267 267
Foreign exchange contracts (Included in Trade, other payables and provisions) 479 479
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 table shows a reconciliation of the opening and closing carrying values 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 1 640 31 1 671
Derecognition direct in equity (166) (166)
Arising on acquisition of subsidiaries and businesses 21 21
Fair valued through profit or loss 64 (14) 50
Settlements (23) (23)
Currency adjustments 337 4 341
Carrying value at the end of the year 1 875 19 1 894
Level 3 sensitivity information
The fair values of the level 3 financial liabilities of R1 894 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 include 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 2016 would change if the significant
assumptions were to be replaced by a reasonable possible alternative.
CARRYING INCREASE IN DECREASE IN
FINANCIAL VALUATION KEY VALUE LIABILITIES LIABILITIES
INSTRUMENTS TECHNIQUE ASSUMPTION Rm Rm Rm
Put option liabilities Income approach Earnings growth 1 875 13 (129)
Contingent consideration liabilities Income approach Assumed profits 19 (4)
2016 2015
Rm Rm
11. Contingencies and commitments
Capital commitments 1 309 2 289
Contingent liabilities 798 405
12. Acquisitions and disposals during the year
Disposals
The Group disposed of its 65% interest in Neska, a subsidiary of Imperial Logistics International BV.
Acquisitions
For acquisitions during the reporting period please refer to business combinations.
13. Events after the reporting period
Acquisition of Palletways Group Limited
The Group acquired a 95% interest in Palletways Group Limited in July 2016 for R3,0 billion (£155,1 million). Palletways provides
an express delivery solution for small consignments of palletised freight through more than 400 depots and 14 hubs across
Europe. As the initial accounting for the business combination was not complete at the time that the financial statements were
authorised for issue no further disclosures are made.
Dividend declaration
Shareholders are advised that a preference and an ordinary dividend has been declared by the board of Imperial on 22 August
2016. For more details please refer to the dividend declaration.
Business combinations during the year
A number of businesses were acquired during the year to complement existing businesses. These businesses are individually and collectively immaterial in
terms of size and value. The fair value of assets acquired and liabilities assumed at the acqusition date were as follows.
Individually
immaterial
R million acquisitions
Assets
Intangible assets 113
Property, plant and equipment 52
Transport fleet 14
Investments, loans and associates and joint ventures 46
Inventories 67
Trade and other receivables 160
Cash resources 89
541
Liabilities
Net income tax liabilities 31
Interest-bearing borrowings 46
Trade, other payables and provisions 164
241
Acquirees' carrying amount at acquisition 300
Non-controlling interests (27)
Net assets acquired 273
Purchase consideration transferred 352
Cash paid 331
Contingent consideration 21
Excess of purchase price over net assets acquired 79
Details of contingent consideration
The contingent consideration requires the Group to pay the vendors an additional amount of R21 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 R9 million and have been recognised as an expense in profit or loss in the
'Other non-operating items' line.
Impact of the acquisitions on the results of the group
From the dates of acquisition the businesses acquired during the year contributed revenue of R1 071 million, operating profit of R22 million. Had all the
acquisitions been consolidated from 1 July 2015, they would have contributed revenue of R1 588 million, operating profit of R3 million. The Group's
continuing revenue for the year would have been R116 255 million, operating profit would have been R5 874 million.
Other details
Trade and other receivables had gross contractual amounts of R167 million of which R7 million was doubtful. Non-controlling interests have been calculated
based on their proportionate share in the acquiree's net assets. None of the resulting goodwill is deductible for tax purposes.
Segmental information
GROUP VEHICLE IMPORT, VEHICLE RETAIL, MOTOR-RELATED
Segment profit or loss - CONTINUING LOGISTICS LOGISTICS TOTAL DISTRIBUTION AND RENTAL AND FINANCIAL SERVICES TOTAL HEAD-OFFICE AND
Continuing operations OPERATIONS AFRICA INTERNATIONAL LOGISTICS DEALERSHIPS AFTER MARKET PARTS AND PRODUCTS VEHICLES ELIMINATIONS
R million 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
Revenue 115 738 107 453 27 119 25 347 20 793 19 071 47 912 44 418 28 473 27 437 41 045 37 547 1 634 1 429 71 152 66 413 (3 326) (3 378)
- South Africa 66 010 67 101 15 266 15 372 15 266 15 372 22 975 23 898 29 461 29 780 1 634 1 429 54 070 55 107 (3 326) (3 378)
- Rest of Africa 13 288 10 481 11 853 9 974 11 853 9 974 1 306 388 129 119 1 435 507
- International 36 440 29 871 1 20 793 19 071 20 793 19 072 4 192 3 151 11 455 7 648 15 647 10 799
Operating profit 5 893 5 671 1 530 1 587 1 013 958 2 543 2 545 1 149 960 1 677 1 677 669 620 3 495 3 257 (145) (131)
- South Africa 3 724 3 828 750 952 750 952 1 033 885 1 403 1 491 669 620 3 105 2 996 (131) (120)
- Rest of Africa 853 668 780 632 780 632 37 4 36 32 73 36
- International 1 316 1 175 3 1 013 958 1 013 961 79 71 238 154 317 225 (14) (11)
Depreciation, amortisation,
impairments and recoupments 3 119 2 878 902 924 777 739 1 679 1 663 696 546 721 662 150 117 1 567 1 325 (127) (110)
- South Africa 1 924 1 754 604 636 604 636 670 531 626 579 150 117 1 446 1 227 (126) (109)
- Rest of Africa 326 305 298 288 298 288 8 3 21 14 29 17 (1)
- International 869 819 777 739 777 739 18 12 74 69 92 81 (1)
Net finance costs 1 440 1 194 533 407 207 180 740 587 495 494 346 313 (5) 836 807 (136) (200)
- South Africa 913 825 314 281 314 281 469 473 279 271 (5) 743 744 (144) (200)
- Rest of Africa 244 135 219 126 219 126 17 3 8 6 25 9
- International 283 234 207 180 207 180 9 18 59 36 68 54 8
Pre-tax profits* 3 841 4 093 777 1 037 585 647 1 362 1 684 433 458 1 317 1 388 712 647 2 462 2 493 17 (84)
- South Africa 2 663 2 893 424 661 424 661 357 399 1 123 1 260 712 647 2 192 2 306 47 (74)
- Rest of Africa 389 404 353 373 353 373 9 5 27 26 36 31
- International 789 796 3 585 647 585 650 67 54 167 102 234 156 (30) (10)
Additional segment information -
Continuing operations
Analysis of revenue by type
- Sale of goods 70 228 63 966 10 065 8 216 10 065 8 216 24 750 23 441 35 413 32 308 60 163 55 749 1
- Rendering of services 45 510 43 487 16 947 17 008 20 793 19 070 37 740 36 078 2 099 2 295 5 035 4 515 613 594 7 747 7 404 23 5
115 738 107 453 27 012 25 224 20 793 19 070 47 805 44 294 26 849 25 736 40 448 36 823 613 594 67 910 63 153 23 6
Inter-group revenue 107 123 1 107 124 1 624 1 701 597 724 1 021 835 3 242 3 260 (3 349) (3 384)
115 738 107 453 27 119 25 347 20 793 19 071 47 912 44 418 28 473 27 437 41 045 37 547 1 634 1 429 71 152 66 413 (3 326) (3 378)
Analysis of depreciation, amortisation,
impairment and recoupments 3 119 2 878 902 924 777 739 1 679 1 663 696 546 721 662 150 117 1 567 1 325 (127) (110)
- Depreciation and amortisation 2 601 2 520 717 731 619 575 1 336 1 306 581 553 653 659 144 117 1 378 1 329 (113) (115)
- Recoupments and impairments (70) (57) (35) (20) (35) (16) (70) (36) (7) (1) (19) 6 5 (26) (5) 5
- Amortisation and impairment of
intangible assets arising on
business combinations 588 415 220 213 193 180 413 393 115 69 22 184 22 (9)
Share of result of associates and joint
ventures included in pre-tax profits 133 33 33 34 25 25 58 59 (19) (3) 46 33 47 27 74 57 1 (83)
* Defined in the glossary of terms.
VEHICLE IMPORT,
DISTRIBUTION VEHICLE RETAIL, MOTOR-RELATED
LOGISTICS LOGISTICS TOTAL AND RENTAL AND AFTER FINANCIAL SERVICES TOTAL HEAD-OFFICE AND
Segment financial position GROUP AFRICA INTERNATIONAL LOGISTICS DEALERSHIPS MARKET PARTS AND PRODUCTS VEHICLES ELIMINATIONS INSURANCE
R million 2016 2015^ 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015^ 2016 2015 2016 2015 2016 2015 2016~ 2015~
Assets
Intangible assets 7 501 7 193 3 526 3 110 3 004 2 863 6 530 5 973 175 505 755 695 (6) 930 1 194 41 26
Property plant and equipment 11 465 10 967 2 518 2 096 2 245 2 244 4 763 4 340 3 477 3 346 3 236 3 313 10 9 6 723 6 668 (21) (41)
Transport fleet 5 953 5 610 2 715 3 212 3 278 2 438 5 993 5 650 (40) (40)
Vehicles for hire 3 469 3 603 1 534 1 757 1 723 1 669 1 071 988 4 328 4 414 (859) (811)
Investment in associates and joint
ventures 687 1 199 342 300 167 139 509 439 (39) (19) 154 100 55 600 170 681 8 79
Inventories 16 717 15 465 1 498 1 448 314 211 1 812 1 659 8 288 7 659 6 361 5 822 436 480 15 085 13 961 (180) (155)
Trade and other receivables 12 712 12 849 4 994 5 136 3 618 3 350 8 612 8 486 1 601 2 164 2 019 2 103 929 469 4 549 4 736 (449) (373)
Other financial assets 8 36 5 8 5 5 10 13 4 26 27 85 85 116 111 (118) (88)
Cash resources 13 22 13 22 13 22
Operating assets 58 525 56 944 15 598 15 310 12 631 11 250 28 229 26 560 15 040 15 438 14 275 13 702 2 599 2 647 31 914 31 787 (1 618) (1 403)
- South Africa 32 248 34 312 9 039 9 034 9 039 9 034 12 401 13 973 10 207 10 113 2 599 2 647 25 207 26 733 (1 998) (1 455)
- Rest of Africa 7 329 6 557 6 559 6 275 6 559 6 275 652 201 118 81 770 282
- International 18 948 16 075 1 12 631 11 250 12 631 11 251 1 987 1 264 3 950 3 508 5 937 4 772 380 52
Liabilities
Retirement benefit obligations 1 531 1 157 1 531 1 157 1 531 1 157
Maintenance and warranty contracts 3 156 3 191 102 17 3 040 3 083 3 142 3 100 14 91
Trade and other payables and
provisions 19 493 19 047 5 591 5 401 3 372 3 145 8 963 8 546 4 770 5 529 6 346 5 825 896 384 12 012 11 738 (1 482) (1 237)
Other financial liabilities 460 379 119 111 1 2 120 113 67 48 42 45 10 1 119 94 221 172
Operating liabilities 24 640 23 774 5 710 5 512 4 904 4 304 10 614 9 816 4 939 5 594 6 388 5 870 3 946 3 468 15 273 14 932 (1 247) (974)
- South Africa 13 949 14 794 3 609 3 682 3 609 3 682 4 160 5 358 3 565 3 338 3 946 3 468 11 671 12 164 (1 331) (1 052)
- Rest of Africa 2 539 1 896 2 101 1 824 2 101 1 824 425 62 13 10 438 72
- International 8 152 7 084 6 4 904 4 304 4 904 4 310 354 174 2 810 2 522 3 164 2 696 84 78
Net working capital* 9 936 9 267 901 1 183 560 416 1 461 1 599 5 119 4 294 2 034 2 100 469 565 7 622 6 959 853 709
- South Africa 7 345 7 253 235 336 235 336 4 178 3 834 1 701 1 924 469 565 6 348 6 323 762 594
- Rest of Africa 838 924 666 852 666 852 147 62 24 11 171 73 1 (1)
- International 1 753 1 090 (5) 560 416 560 411 794 398 309 165 1 103 563 90 116
Net debt* 16 520 14 327 5 249 4 872 3 955 4 150 9 204 9 022 5 822 4 661 2 000 2 482 (1 668) (1 738) 6 154 5 405 1 162 (100)
- South Africa 9 915 8 204 2 610 2 669 2 610 2 669 5 244 4 185 1 686 2 199 (1 668) (1 738) 5 262 4 646 2 043 889
- Rest of Africa 2 821 2 454 2 639 2 209 2 639 2 209 118 194 64 51 182 245
- International 3 784 3 669 (6) 3 955 4 150 3 955 4 144 460 282 250 232 710 514 (881) (989)
Net capital expenditure 4 138 4 519 880 1 046 1 027 1 173 1 907 2 219 1 288 1 199 779 844 228 649 2 295 2 692 (162) (500) 98 108
- South Africa 2 624 2 856 534 711 534 711 1 228 1 182 701 710 228 649 2 157 2 541 (163) (501) 96 105
- Rest of Africa 416 369 346 335 346 335 27 8 41 23 68 31 2 3
- International 1 098 1 294 1 027 1 173 1 027 1 173 33 9 37 111 70 120 1 1
^ Restated as described in note 2.1 and 2.2.
* Defined in the glossary of terms
~ The assets and liabilities of the Insurance business are shown as held-for-sale at 30 June 2016 and 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
shares repurchased (the deferred ordinary shares only participate to the extent of their par
value of 0,04 cents).
Net debt (segment report) - the aggregate of interest-bearing borrowings, non-redeemable, non-participating preference
shares less cash resources.
Operating margin (%) - operating profit divided by revenue.
Pre-tax profits - calculated as profit before tax, impairment of goodwill, profit or loss on sale of
investment in subsidiaries, associates and joint ventures and other businesses,
and impairment losses on assets of disposal groups.
Return on invested capital (%) - this is the return divided by the invested capital.
- the return is calculated by reducing the operating profit by a blended tax rate, which is an
average of the actual tax rates applicable in the various jurisdictions in which we operate,
increased by the income from associates.
- the invested capital is a 12 month average of shareholders equity plus non-controlling
interests (ignoring the put option debit) plus preference shares plus net interest bearing debt
(long term and short term less long term loans receivable less non financial services cash resources).
- this is different to the prior year which has been restated to the new basis.
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
SP Kana# (Chairman), A Tugendhaft## (Deputy Chairman), MJ Lamberti (Chief Executive), OS Arbee (Chief Financial Officer), MP de Canha, P Cooper#,
G Dempster#, T Dingaan#, RM Kgosana#, P Langeni#, P Michaux, MV Moosa##, RJA Sparks#, M Swanepoel, Y Waja#
# Independent non-executive ## Non-executive
Company Secretary
RA Venter
Group Investor Relations Manager
E Mansingh
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, The Place, 1 Sandton Drive, Sandton, 2196
The results announcement is available on the Imperial website: www.imperial.co.za
Date: 23/08/2016 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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