Wrap Text
Unaudited interim results for the six months ended 31 December 2016
IMPERIAL HOLDINGS LIMITED
Registration number: 1946/021048/06
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN: ZAE000088076
Unaudited interim results for the six months ended 31 December 2016
Imperial Holdings is a JSE listed South African-based international group of companies operating in the logistics and vehicle sectors as:
- Imperial Logistics: consumer and industrial logistics which make up 42% and 46% of Group* revenue and operating profit respectively, with 63% of the
operating profit generated internationally;and
- Motus: vehicle import, distribution, dealerships, rental, aftermarket parts, and vehicle-related financial services, which make up 58% and 54% of Group*
revenue and operating profit respectively, with 13% of the operating profit generated internationally.
* Excluding discontinued operations, businesses held for sale, head office and eliminations.
Imperial employs over 51 000 people who generate annual revenues in excess of R120 billion mainly in Africa and Europe.
Our performance
Group financial highlights
Revenue up 2% to R61,3 billion (42% foreign)
Operating profit up 4% to R3,2 billion (36% foreign)
Core eps down 8% to 795 cents per share
Heps down 15% to 682 cents per share
Eps down 23% to 679 cents per share
Interim cash dividend down 14% to 320 cents per share
Return on equity 13,2%
Return on invested capital 12,2%
Weighted average cost of capital 10,0%
Cash generated by operations of R4,3 billion
Results overview
These results reflect continued progress with Imperial's strategic, capital, operational, organisational and managerial restructuring, which commenced
in late 2014.
- Total revenue and operating profit grew 2% to R61,3 billion and 4% to R3,2 billion respectively, supported by the inclusion of the Palletways acquisition
for the six months, and solid results from the Logistics South Africa and Motor-Related Financial Services sub-divisions. Excluding current year acquisitions,
total revenue and operating profit declined 3%.
- Revenue and operating profit from continuing operations, excluding Regent, were both up 3% to R59,7 billion and R2,9 billion respectively.
- The Group's operating margin from continuing operations at 4,8% was maintained at the same level as the prior period.
- Foreign revenue increased by 12% to R25,0 billion (42% of Group* revenue) and foreign operating profit increased 9% to R1,0 billion (36% of Group*
operating profit).
- Non-vehicle revenue increased 16% to R25,3 billion (42% of Group* revenue) and operating profit increased 12% to R1,3 billion (46% 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 reduced to R468 million from R1,7 billion in the prior period.
- Net working capital from continuing operations increased to R11,2 billion from R9,9 billion at June 2016, but reduced from R11,5 billion
at December 2015.
- The net debt to equity ratio (including preference shares as equity) increased to 98% from 76% in December 2015 (73% at June 2016) mainly due to the
Palletways acquisition.
- Strategic disposals during 2017 to generate proceeds of approximately R4,6 billion. R1,4 billion has been received to date.
* Excluding discontinued operations, head office and eliminations.
Environment
With a footprint in more than 30 countries on six continents, Imperial is affected by the well-publicised geopolitical and economic developments that have
created a general climate of uncertainty affecting business conditions and the volatility of currencies.
South Africa
The trading environment remains challenging in South Africa, where R35,2 billion or 59% of Group* revenue and R1,9 billion or 64% of Group* operating
profit was generated in the six months to December 2016.
Specific factors that affected Imperial during the period were: the strengthening of the Rand which created foreign exchange hedging losses, and made
inventory and placed orders uncompetitive price-wise; a 13% decline in national new vehicle sales; declining business confidence; fragile consumer health
and higher inflation that depressed personal consumption expenditure.
Eurozone, United Kingdom (UK) and Australia
Slow economic recovery continues and trading conditions remain satisfactory in the Eurozone and Australia, where R19,3 billion or 32% of Group* revenue
and R588 million or 20% of Group* operating profit was generated for the six months to December 2016.
Specific factors that affected Imperial during the period were: pro-longed low water levels on the River Rhine that continues to depress the profitability of
inland shipping; lower demand and pricing pressures from the steel, energy, commodities and construction industries; steady UK economic growth; and the
strengthening of the Rand against the Pound by an average of 15% which depressed the Rand denominated results of the UK businesses. The Rand
weakened against the Euro and the Australian Dollar by an average of 2% and 7% respectively which improved the Rand denominated results in these
regions.
* Excluding discontinued operations, head office and eliminations.
African Regions
Falling commodity demand, low oil prices and the consequent impact on currencies and private consumption has negatively impacted the growth rate in the
African Regions, where R5,7 billion or 9% of Group* revenue and R461 million or 16% of Group* operating profit was generated during the period.
Specific factors that affected Imperial during the financial year were: slowing GDP growth rates; rising inflation and interest costs; lower consumer demand;
currency volatility; and devaluation.
Against this background, we provide shareholders with current information on the Group's strategy and performance.
Strategy and structure
Significant progress was registered to consolidate and integrate Imperial's activities within two large, increasingly self-sufficient divisions. In many instances
progress is ahead of original plans.
Since 1st July 2016, Imperial's entire logistics interests are being led by one CEO and board as one division named Imperial Logistics, and managed and
reported on as three sub-divisions: South Africa; African Regions; and International.
Concurrently, work commenced on the consolidation and integration of Imperial's entire vehicle interests which from 1st January 2017 are being led by one
CEO and board as one division named Motus Corporation, and managed and reported on as four sub-divisions: Import and Distribution; Retail and Rental;
Aftermarket Parts; and Motor Related Financial Services.
As previously stated, the objective of this restructuring is to create value through intra-divisional efficiencies and collaboration, and to deeper penetrate the
supply chains in both sectors through better co-ordinated and competitive value propositions to clients.
This financial report is based on the new divisional structure with increased detail reflecting our commitment to disclosure that enables shareholders to
analyse and fairly value their investment.
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 external challenges, Imperial's investment thesis remains unchanged and steady progress was made with each of the following five
capital allocation objectives:
1. To release capital and sharpen executive focus, by disposing of non-core, strategically misaligned, underperforming or low return on effort assets.
During the reporting period, we disposed of:
- non-strategic properties: R1,5 billion is expected to be realised in the 2017 calendar year and a further R700 million expected during 2018;
- minority stake in MixTelematics for R470 million with payment received on 30 August 2016;
- 51% (control) of 10 entities in the Vehicle Import, Distribution and Dealerships division to a related party for R55 million, concluded on 30 August 2016;
and the following smaller disposals amounting to approximately R8 million:
- a panelshop in Cape Town owned by the Vehicle Retail and Rental sub division of Motus;
- 75% interest in Bronchem Laboratories BV, a subsidiary of Lehnkering Logistics Group;
- 51% interest in Virtual Logistics, a subsidiary of Pharmed Pharmaceuticals;
- 50,1% interest in Commerce Edge, a subsidiary of Resolve Solutions; and
- 51% interest in MiFone, a subsidiary of Logistics African Regions.
- Disposals concluded after the reporting period included the following:
- The Regent Group's non-South African operations for an upfront payment of R697 million, with payment received at the end of January 2017.
The sale of the South African business is still subject to regulatory approvals.
- LTS Kenzam was sold for R10 million cash in January 2017.
- Jurgens and Prestige Safari were sold for R233 million in February 2017.
Since 2015: 42 businesses with total revenue of R11,9 billion and operating profit of R937 million have been or are in the process of being disposed
of for approximately R4,1 billion including Regent. In addition, 82 properties have been or are in the process of being sold for approximately R2,1 billion.
The total capital employed in these businesses and properties totalled R5,1 billion.
Although the bulk of identified disposals have been concluded, continual analysis of the strategic and financial performance of businesses will result
in refinements to the portfolio of both divisions over the medium term.
* Excluding discontinued operations, head office and eliminations.
2. We will invest capital in South Africa to maintain the quality of assets and market leadership in our logistics and motor vehicle businesses.
Acquisitions during the period include:
- a 70% stake in Sasfin Premier Logistics for R38 million in July 2016;
- 55% of Itumele Bus Lines for R147 million in November 2016
- and the remaining 10% minority stake in Midas for R87,5 million.
In addition, R1,9 billion of capital expenditure was invested in South Africa in continuing operations.
3. We will invest capital in the African Regions 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.
- The acquisition of 70% of Surgipharm Limited in Kenya for a consideration of USD35 million (ZAR470 million) was announced on 15 February 2017,
subject to regulatory approvals.
- The capital light Imperial Managed Logistics business was expanded in Nigeria and Ghana.
4. We will invest the cash generated from operations and divestments to grow our businesses beyond the continent, but with an emphasis on logistics.
- The most notable acquisition during the period was a 95% stake in Palletways for £155,1 million (R3,0 billion which includes the purchase of debt at
acquisition date), concluded on 5 July 2016.
- Palletways acquired 100% of Topco in Italy for R14 million.
- Capital expenditure of R390 million was invested 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 R538 million.
Divisional performance
Imperial Logistics
% CHANGE
HY1 HY1 % HY2 ON HY2
2016 2017 CHANGE 2016 2016
Revenue (Rm)* 21 806 25 259 16 23 170 9
Operating profit (Rm)* 1 195 1 342 12 1 405 (4)
Operating margin (%)* 5.5 5.3 6,1
Return on Invested Capital (%) 11,5 10,4
Weighted average cost of capital (%) 8,0 8,4
* Excludes businesses held for sale.
Imperial Logistics recorded 16% growth in revenue and 12% growth in operating profit, supported mainly by the Palletways acquisition in Logistics International
and a solid performance from Logistics South Africa despite challenging trading conditions and lower demand in certain key markets. Excluding Palletways,
operating profit was down 2%.
Net capital expenditure of R500 million was incurred (2016: R1,1 billion) in the Imperial Logistics division, attributable mainly to the transport fleet and an
increase in plant, equipment and intangible assets in South Africa; and additional capacity for the chemical manufacturing business and part payment for two additional
convoys in South America.
Imperial Logistics remains focused on expanding and leveraging its footprint in selected African and European countries, with a bias towards less capital
intensive businesses that enhance revenue growth and returns. Integrated logistics capabilities are also being strengthened to enable deeper penetration of
clients' supply chains.
Logistics South Africa
% CHANGE
HY1 HY1 % HY2 ON HY2
2016* 2017 CHANGE 2016 2016
Revenue (Rm) 7 440 8 217 10 7 533 9
Operating profit (Rm) 416 498 20 340 46
Operating margin (%) 5,6 6,1 4,5
* Restated to exclude businesses held for sale.
Logistics South Africa performed strongly, increasing revenue and operating profit by 10% and 20% respectively. The significant contributors to this were
increased volumes in the commodities, fuel and gas operations, and strong performances from Managed Logistics and Resolve.
The bulk commodities business delivered strong performance, recording revenue and operating profit growth compared to a break-even result in the prior
period. This was driven by a higher demand for Iron Ore and Manganese. The acquisition of Itumele Bus Lines also contributed positively to the business,
although only included for two months.
The consumer logistics businesses recorded revenue and operating profit growth supported by an improvement from Imperial Cold Logistics, which reduced
its losses from the prior period although capacity remains underutilized. Volumes in the other retail facing businesses were lower due to subdued trading
conditions.
With 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.
Logistics African Regions
% CHANGE
HY1 HY1 % HY2 ON HY2
2016* 2017 CHANGE 2016 2016
Revenue (Rm) 5 341 4 874 (9) 5 872 (17)
Operating profit (Rm) 395 397 - 388 2
Operating margin (%) 7,4 8,1 6,6
* Restated to exclude businesses held for sale.
Logistics African Regions' performance was undermined by slowing growth rates and rising inflation and interest rates, which resulted in lower consumer
demand in many of its African markets. Revenue declined by 9% mainly due to the weakening of the Naira and the Metical by 37% on a combined
average; subdued demand from Imres' key markets; and a weak performance from CIC due to lower consumer demand in Botswana and downsizing of the
business in Mozambique. Despite these factors, operating profit for the period was maintained due to a strong performance from EcoHealth, Nigeria's
leading distributor of ethical pharmaceuticals.
The strategy to be a significant route-to-market partner of multi-national consumer goods and pharmaceutical companies in Southern, East and West Africa
is on track. 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.
Logistics International
% CHANGE
HY1 HY1 % HY2 ON HY2
2016* 2017 CHANGE 2016 2016
Revenue (Rm) 9 025 12 168 35 10 487 16
Operating profit (Rm) 384 447 16 616 (27)
Operating margin (%) 4,3 3,7 5,9
Revenue (Euro million) 602 795 32 610 30
Operating profit (Euro million) 25,7 29,3 14 36 (19)
Operating margin (%) 4,3 3,7 5,9
* Restated to exclude Neska.
Logistics International's revenue and operating profit in Euros increased 32% and 14% respectively, boosted by the acquisition of Palletways, but excluding
Neska, which was sold in December 2015. The performance in Rand terms was enhanced by a weaker average Rand/Euro exchange rate. The remaining
international operations performed well below expectations and the prior period.
The Transport Solutions business was negatively affected by lower shipping volumes in South America resulting from a poor corn harvest in Brazil and lower
iron ore volumes. In Germany, bulk-shipping volumes declined due to low water levels on the River Rhine, and lower demand and pricing pressures from
the steel, energy, commodities and construction industries. The South American business is utilising five push boats with 60 barges, some redeployed from
Europe. Two additional push boats with 24 barges will be commissioned in March 2017.
The Supply Chain Solutions business performed well with a strong performance from the automotive and industrial operations more than offsetting lower
volumes from key customers in the retail and contract chemical operations.
Despite the uncertainty of Brexit, the weakening of the Pound and budgeted losses from the start-up operations in Germany, Palletways performed well
during the period and in line with expectations. The franchise network of Palletways in the UK has continued to expand and gain new business. The
expansion of the network in European markets remains on track, with the service offering extending to Poland.
Motus
% CHANGE
HY1 HY1 % HY2 ON HY2
2016 2017 CHANGE 2016 2016
Revenue (Rm)* 34 105 35 015 3 33 854 3
Operating profit (Rm)* 1 481 1 568 6 1 758 (11)
Operating margin (%)* 4,3 4,5 5,2
Return on Invested Capital (%) 12,6 12,9
Weighted average cost of capital (%) 10,3 11,0
*Restated for the new segment format and excludes businesses held for sale.
Revenue and operating profit for Motus increased by 3% and 6% respectively during the period, impacted by the low growth of consumer durable expenditure in South Africa and
significant increases in vehicle prices resulting in contraction of the vehicle market. These factors were reflected in national vehicle sales as reported by
NAAMSA, which contracted 13% over the reporting period. The strengthening of the Rand against the Pound reduced the Rand denominated results of the
UK business. The weakening of the Rand against the Australian Dollar improved the Rand results of the Australian operations.
The passenger and light commercial vehicle businesses, including the UK and Australia, retailed 54 707 (2016: 61 749) new and 38 748 (2016: 37 649)
pre-owned vehicles during the period.
Net capital expenditure of R1,8 billion was incurred (2016: R1,9 billion) largely on vehicles for hire.
The formation and structuring of Motus, under one collaborative leadership team, will in the medium term enhance returns by reducing duplication,
complexity, costs and capital employed, unlocking intra-divisional efficiencies and more deeply penetrating the vehicle supply chain, while maintaining
market share in challenging environments in the markets in which we operate.
Vehicle Import and Distribution
Exclusive importer and distributor of 16 automotive brands; the major exclusive imported brands being Hyundai, Kia and Renault; and distributorships in six
African countries.
Note: Retail dealerships that were previously part of the Vehicle Import, Distribution and Dealerships division are now included in the Vehicle Retail and Rental
sub-division.
HY1 HY1 %
2016 2017 CHANGE
Revenue (Rm) 9 000 8 903 (1)
Operating profit (Rm) 384 390 2
Operating margin (%) 4,3 4,4
Importer unit sales of passenger and light commercial vehicles, as defined by NAAMSA, decreased by 11% to 39 791 units from 44 506 units on the prior
period due to the decrease in sales through the dealer network.
Notwithstanding the challenging trading environment in South Africa, revenue from this sub-division declined marginally by 1% arising from lower volumes
and delays in new vehicle launches, partially offset by price increases. Operating profit improved by 2% supported by solid performances from Hyundai and
Kia, enhanced by manufacturer assistance, a change in the vehicle mix and price increases. This was offset by a weak performance from Renault where
competitiveness and volumes were depressed.
Our importer segment market share of 15% increased 1% from the prior period due mainly to a strong unit volume performance by Hyundai.
Forward cover on the US Dollar and Euro imports currently extends to August 2017, at an average of R15,02 to the US Dollar and R16,47 to the Euro.
Vehicle Retail and Rental
In South Africa retail and rental through:
- 268 passenger vehicle dealerships representing 22 OEMs, which includes 63 dedicated pre-owned retail outlets (Auto Pedigree).
- 193 franchised dealerships
- 19 commercial vehicle dealerships and workshops representing 12 brands in South Africa
- 110 car rental outlets (Europcar and Tempest)
- Panel shops
In the rest of the world retail and rental through:
- 38 commercial vehicle dealerships in the UK
- 5 dealerships in Australia
- 15 car rental outlets (Europcar and Tempest) in Southern Africa
Note: Retail dealerships that were previously part of the Vehicle Import, Distribution and Dealerships division are now included in this sub-division.
HY1 HY1 %
2016 2017 CHANGE
Revenue (Rm) 28 575 29 285 2
Operating profit (Rm) 681 694 2
Operating margin (%) 2,4 2,4
The Vehicle Retail and Rental operations recorded a 2% increase in revenue and operating profit impacted by lower volumes but assisted by price increases
and an increase in pre-owned vehicle sales. This was despite the disposal of eight dealerships over the past 12 months.
South Africa's passenger and light commercial vehicle businesses experienced a 14% decline in new vehicle sales to 50 718 units compared to 58 869 units
in the prior period. The commercial vehicle markets also experienced a reduction in new retail unit sales, reducing revenue and operating profit.
Revenue and operating profit in the UK Commercial business increased marginally but the strengthening of the Rand by 15% against the Pound over the
period reduced the Rand denominated results.
Car rental increased its revenue, operating profit and market share. Despite a challenging and competitive operating environment, all sectors, with the
exception of the government sector, performed well during the period. There has been a marked improvement in the utilization of vehicles, but accident
costs remain high. In addition to process optimization, automation of the vehicle inspection, claims and recovery processes, the business is on track to
implement technological solutions to improve efficiencies and customer service.
Total pre-owned retail unit sales increased by 3%, benefiting from the higher new vehicle prices, which are driving consumers to purchasing pre-owned
vehicles. Consequently, the sub-division's pre-owned to new vehicle ratio continues to increase, consistent with the tightening economy and in line with the
broader market.
Panel shops performed well, increasing revenue and operating profit.
The African Regions' operations, which increased revenue and operating profit during the period, continued to contribute positively.
The Australian operations returned a strong performance off a low base, driven by increased unit sales due to the introduction of new brands in the
multi-franchise dealerships and an increase in the Ford range.
Aftermarket Parts
Distributor, wholesaler and retailer of accessories, and parts for older vehicles, through 764 Midas (AAAS), Alert Engine Parts and Turbo Exchange owned and
franchised stores.
HY1 HY1 %
2016 2017 CHANGE
Revenue (Rm) 2 769 2 990 8
Operating profit (Rm) 157 173 10
Operating margin (%) 5,7 5,8
The Aftermarket Parts business improved revenue and operating profit by 8% and 10% respectively enhanced by parts sales and price increases, and
a change in the sales mix.
Financial Services
Developer and distributor of innovative vehicle-related financial products and services through dealer and vehicle finance channels, and a national
call centre; full maintenance leasing services.
HY1 HY1 %
2016 2017 CHANGE
Motor Related Financial Services
Revenue (Rm) 801 855 7
Operating profit (Rm) 335 388 16
Operating margin (%) 42 45
Insurance (discontinued operations)
Revenue(Rm) 1 565 1562 -
Operating profit (Rm) 274 302 10
Adjusted investment income (Rm) 120 124 3
Adjusted underwriting result (Rm) 244 269 10
Intergroup eliminations (Rm) (90) (91)
Operating margin (%) 17,5 19,3
Underwriting margin (%) 15,6 17,2
Despite lower vehicle sales, the Motor Related Financial Services business grew revenue and operating profit by 7% and 16% respectively. Higher
profitability was experienced in demo sales and rental income due to higher business volumes. Profitability of the maintenance funds increased as cost
increases did not materialize. The book growth and returns from the alliances with financial institutions was tempered by slowing vehicle sales.
We continue to focus on growing the leasing business via Imperial Fleet Management and building synergies within the retail motor divisions to leverage
scale for our customers.
Regent is currently held for sale, with the disposal subject to regulatory approvals by the South African authorities. The disposal of the Regent Group's
non-South African operations for an upfront consideration of R697 million was concluded in January 2017. During the year Regent's underwriting result
increased by 10% due to an improved performance in the life business and lower loss ratios in the short-term business. Investment income increased
by 3%.
The underwriting performance in Regent's short-term business benefited from the absence of a loss-making portfolio of business that was terminated
in the prior financial year. New business penetration of motor related value added products remained under pressure due to declining vehicle sales.
Group financial performance
Group profit and loss (extracts)
TOTAL CONTINUING DISCONTINUED TOTAL CONTINUING DISCONTINUED
H1 H1 H1 H1 H1 H1 TOTAL CONTINUING
R million 2017 2017 2017 2016 2016 2016 % CHANGE % CHANGE
Revenue 61 253 59 691 1 562 59 766 58 201 1 565 2 3
Operating profit 3 181 2 879 302 3 066 2 792 274 4 3
Operating margin (%) 5,2 4,8 19,3 5,1 4,8 17,5
Net finance costs (828) (828) - (651) (651) - 27 27
Income from associates 47 47 - 58 58 - (19) (19)
Profit before tax 1 938 1 641 297 2 475 2 230 245 (22) (26)
Tax (586) (482) (104) (692) (615) (77) (15) (22)
Net profit after tax 1 352 1 159 193 1 783 1 615 168 (24) (28)
Attributable to non-controlling interests (33) (21) (12) (84) (57) (27) (61) (63)
Attributable to shareholders of Imperial 1 319 1 138 181 1 699 1 558 141 (22) (27)
Effective tax rate 31,0 29,4 28,6 27,6 - -
Return on Invested Capital (%) 12,2 13,1*
Weighted average cost of capital (%) 10,0 9,5*
* Restated to new calculation method. See glossary of terms.
Total group revenue increased by 2% to R61,3 billion and operating profit increased by 4% to R3,2 billion. Excluding acquisitions, mainly Palletways, revenue
and operating profit decreased by 3%.
The group profit before tax declined by 22% mainly due to:
- Foreign exchange losses of R121 million compared to gains of R126 million in the prior period on various monetary items including working capital items,
inter-group loan funding and hedging instruments
- Higher finance costs due to higher costs of funding and higher debt levels resulting from the Palletways acquisition and delays in the receipt of proceeds from
assets and businesses held for sale;
- Higher amortisation of intangible assets of R263 million from R207 million in the prior period, arising from acquisitions; and
- The prior period benefited from the profit on sale of Neska of R447 million, partially offset by intangible impairments of R303 million.
Income from associates and joint ventures decreased by R11,0 million compared to the prior period largely as a result of the sale of Mix Telematics.
The effective tax rate for the group is 31,0%, up from 28,6% in the prior period mainly due to loss making operations where we have not recognised a tax
credit in the income statement, largely Renault and Imperial Cold Logistics.
The profits attributable to the non-controlling shareholders were down on the prior period. This is due to the purchase of the non-controlling shareholders'
interest in Associated Motor Holdings and AAAD (Midas), and in the second half of 2016 the sale of the Goscor group, which had a 32,5% non-controlling
shareholder.
Reconciliation from Earnings to Headline and Core Earnings
R million H1 2017 H1 2016 % CHANGE
Net profit attributable to Imperial shareholders (earnings) 1 319 1 699 (22)
Profit on disposal of assets (37) (41)
Impairments of goodwill and other assets - 303
Loss/(profit) on sale of businesses 40 (445)
Impairment (reversals)/ losses on assets of disposal group (8) 10
Other 10 85
Tax and non-controlling interests 1 (66)
Headline earnings 1 325 1 545 (14)
Amortisation of intangibles 263 207
Foreign exchange gain on intergroup monetary items - (92)
Re-measurement of contingent consideration, put option liabilities
and business acquisition costs 51 54
Tax (72) (35)
Non-controlling interests (23) (19)
Core earnings 1 544 1 660 (7)
Earnings, Headline Earnings and Core Earnings per Share
GROUP GROUP GROUP
TOTAL CONTINUING TOTAL CONTINUING TOTAL CONTINUING
Cents H1 2017 H1 2017 H1 2016 H1 2016 % CHANGE % CHANGE
Basic EPS 679 586 881 808 (23) (27)
Basic HEPS 682 587 801 728 (15) (19)
Basic Core EPS 795 699 861 781 (8) (11)
Financial position
DECEMBER JUNE % DECEMBER %
R million 2016 2016 CHANGE 2015 CHANGE
Goodwill and intangible assets 9 764 7 501 30 7 866 24
Property, plant and equipment 9 997 11 465 (13) 11 736 (15)
Investment in associates and joint ventures 915 986 (7) 1 618 (43)
Transport fleet 5 887 5 953 (1) 6 372 (8)
Vehicles for hire 4 320 3 469 25 3 841 12
Investments and loans 294 291 1 357 (18)
Net working capital 11 205 9 936 13 11 475 (2)
Other assets 2 109 1 867 13 1 597 32
Assets held for sale 7 312 6 552 12 6 530 12
Net debt (20 682) (16 079) 29 (17 709) 17
Non-redeemable, non-participating preference shares (441) (441) - (441) -
Other liabilities (8 425) (8 584) (2) (8 808) (4)
Liabilities directly associated with assets held for sale (2 985) (3 114) (4) (3 243) (8)
Total shareholders' equity 19 270 19 802 (3) 21 191 (9)
Total assets 73 331 69 830 5 74 863 (2)
Total liabilities (54 061) (50 028) 8 (53 672) (1)
Goodwill and intangible assets rose by 30% to R9,8 billion primarily due to the acquisition of the Palletways Group of R3,3 billion and Itumele Bus Lines of
R101 million. This was partially offset by the amortisation of intangibles and Rand strength.
Property, plant and equipment decreased by R1,5 billion to R10,0 billion primarily from disposal of properties and the reclassification of properties to "assets
held for sale" during the period.
Investment in associates and joint ventures decreased by R71 million, mainly as a result of the Rand strength.
The transport fleet decreased by 1% or R66 million. The net investment in trucks and barges of R293 million and acquisitions of R269 million was offset by
currency adjustments of R311 million resulting from a stronger Rand and depreciation of R344 million.
Vehicles for hire increased by R851 million due to an increase in the car rental fleet and higher sales to external car rental companies by the importers.
Assets held for sale now includes Regent, properties and other businesses identified during 2016 as being available for sale. These additional businesses
are: Logistics - Imperial Express, LTS Kenzam and Motus - Jurgens, Safari Centre.
Total assets increased by 5% to R73,3 billion due mainly to acquisitions and capital expenditure, partly reduced by currency adjustments as a result of the
strengthening Rand.
Total equity including non-controlling interest (minority) is R19,3 billion, down 3% (R532 million) from June 2016. Due to the Rand strengthening, the
foreign currency translation reserve decreased equity by R831 million and the hedge accounting reserve reduced equity by R337 million.
Movement in equity for the six months to December
R million 2016
Net profit attributable to Imperial shareholders 1 319
Net profit attributable to non-controlling interests 33
Decrease in the foreign currency translation reserve (831)
Reduction in the hedge accounting reserve (337)
Re-measurement of defined benefit obligations 62
Movement in share based reserve 63
Dividends paid (991)
Non-controlling interests:
Palletways (share issue) 150
Midas (NCI buy out) (61)
Itumele (new acquisition) 115
Other movements (54)
Total change (532)
Cash flow
R million H1 2017 H1 2016 % CHANGE
Cash generated by operations before movements in working capital 4 330 4 485 (3)
Movements in net working capital (excludes currency movements &
net acquisitions) (2 379) (1 194)
Cash generated after working capital movements 1 951 3 291 (41)
Interest paid (823) (696)
Tax paid (660) (945)
Cash generated by operations before capital expenditure on rental
assets 468 1 650 (72)
Capital expenditure on rental assets (1 399) (1 561)
Cash flows from operating activities (931) 89
Net acquisitions & disposals of subsidiaries and businesses (1 671) 726
Capital expenditure (non-rental assets) (1 017) (1 501)
Equities, investments and loans 433 (43)
Dividends paid (991) (1 030)
Other 58 (550)
Increase in net debt (excludes currency movements & debt from
acquisitions) (4,119) (2 309) (78)
Cash generated by operations of R4,3 billion and the increase in net debt of R4,1 billion funded the following: increase in working capital of R2,4 billion;
capital expenditure of R2,4 billion; dividend payments of R1,0 billion; tax payments of R660 million; interest payments of R823 million; acquisitions net of
disposals of R1,7 billion; and other inflows of R490 million, which mainly included the sale of Mix Telematics. The higher net working capital was mainly
due to higher cost of inventory and increased stock levels in the vehicle businesses, and an increase in trade receivables in Logistics International.
Liquidity
The group's liquidity position is strong with R12,5 billion of unutilised banking facilities, excluding asset backed finance facilities. 78% of the Group debt is
long-term in nature and 63% of the debt is at variable rates. The group's international scale credit rating by Moody's is unchanged at Baa3. The net debt to
equity ratio is currently at 98%.
Dividend
In recent years, although no formal dividend policy exists, the Imperial ordinary dividend was determined by reference to Core Earnings. In future the
dividend will be determined by reference to HEPS, which is the conventional metric on which dividend is based, and the board will determine the dividend
cover with due regard to the company's circumstances. An interim cash dividend of 320 cents per ordinary share (2016: 370 cents per share) being 47% of
HEPS has been declared.
Board changes
Effective 1 March 2017, Mr Mohammed Akoojee, currently Chief Executive Officer of Imperial Logistics African Regions, will become the Group Chief Financial
Officer. He will succeed Mr Osman Arbee who remains on the board in his new role as Chief Executive Officer of Motus Corporation, the recently created
Vehicles division.
Prospects
Since late 2014, in less than favourable conditions, Imperial has focussed on unlocking value through fundamental and far-reaching changes to the portfolio
focus, capital intensity, organisation structure, management profile and now, disclosure to shareholders. While continuous change is the hallmark of any
successful organisation, the changes to date have established a solid foundation for improved growth and returns in the medium term.
In the short term - the balance of F2017 - we face pressure on revenue and margins, most particularly in our logistics operations beyond South Africa and
our Vehicle Import and Distribution business where fully priced inventory and out of the money forward cover must work through the system.
The expected sub-divisional segmental performance for the year to June 2017 is as follows:
Imperial Logistics:
- South Africa: Growth of revenues and operating profit.
- African Regions: Decline in revenues and operating profit attributable primarily to the indirect impact of currency movements on volumes and translation
of profits into Rands.
- International: Growth of revenues and operating profit, attributable to the acquisition of Palletways, and a recovery in the German and South American
businesses, which are dependent on weather conditions and customer volumes.
Motus:
- Import and Distribution: Flat revenues and a decline in operating profit, impacted by challenging trading conditions and the high cost of foreign exchange
cover to August 2017.
- Retail and Rental: Decline in revenues and operating profit attributable to challenging trading conditions in South Africa.
- Aftermarket Parts: Increase in revenues and operating profit, enhanced by the sale of Jurgens.
- Motor Related Financial Services: Growth of revenues and operating profit.
Subject to stable currencies in the economies in which we operate, and South Africa retaining its investment grade, we expect the Imperial group to achieve
a single digit increase in revenues and unchanged operating profit for the year to June 2017. However, a significant increase in foreign exchange losses and
higher financing costs will negatively impact headline earnings for the year to June 2017.
We thank shareholders for their support and will continue to execute on our espoused strategies.
MARK J. LAMBERTI - Chief Executive Officer
OSMAN S. ARBEE - Chief Financial Officer
The results to and financial position at 31 December 2016 and forecast financial information herein has not been reviewed or reported on by Imperial's
auditors.
Declaration of preference and ordinary dividends
for the six months ended 31 December 2016
Preference shareholders
Notice is hereby given that a gross interim preference dividend of 434.31164 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 369.16489 cents per share.
Ordinary shareholders
Notice is hereby given that a gross interim ordinary dividend in the amount of 320.00000 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 272.00000 cents per share.
The company has determined the following salient dates for the payment of the preference dividend and ordinary dividend:
2017
Last day for preference shares and ordinary shares respectively to
trade cum-preference dividend and cum ordinary dividend Monday, 20 March
Preference shares and ordinary shares commence trading ex-
preference dividend and ex-ordinary dividend respectively Wednesday, 22 March
Record date Friday, 24 March
Payment date Monday, 27 March
The company's income tax number is 9825178719.
Share certificates may not be dematerialised/rematerialised between Wednesday, 22 March 2017 and Friday, 24 March 2017, both days inclusive.
On Monday, 27 March 2017, 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 Monday, 27 March 2017 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,
27 March 2017.
On behalf of the board
RA Venter
Group Company Secretary
20 February 2017
The results of the Insurance businesses, which are in the process of being disposed, are presented in the condensed consolidated statement of profit or loss as
discontinued operations. The assets and related liabilities of the Insurance businesses has been reclassified to 'Assets of discontinued operations' and 'Liabilities of
discontinued operations' respectively on the condensed consolidated statement of financial position. The assets and related liabilities of the disposal groups have
been reclassified to "Assets of other disposal groups" and "Liabilities of other disposal groups" respectively on the condensed consolidated statement of financial
position.
The following shows the combined result of the continued and discontinued operations after eliminating inter-group transactions. The results of other
disposal groups are included in continuing operations.
TOTAL CONTINUING DISCONTINUED TOTAL CONTINUING DISCONTINUED
OPERATIONS OPERATIONS OPERATIONS OPERATIONS OPERATIONS OPERATIONS
31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER
% 2016 2016 2016 2015 2015 2015
change Rm Rm Rm Rm Rm Rm
Revenue 2 61 253 59 691 1 562 59 766 58 201 1 565
Net operating expenses (56 804) (55 544) (1 260) (55 374) (54 083) (1 291)
Profit from operations before
depreciation and recoupments 4 449 4 147 302 4 392 4 118 274
Depreciation, amortisation,
impairments and recoupments (1 268) (1 268) (1 326) (1 326)
Operating profit 4 3 181 2 879 302 3 066 2 792 274
Recoupments from sale of
properties, net of impairments 7 7 6 6
Amortisation of intangible assets
arising on business combinations (263) (263) (207) (207)
Impairment of intangible assets
arising on business combinations (151) (151)
Other non-operating items (206) (201) (5) 354 383 (29)
Profit before net finance costs (11) 2 719 2 422 297 3 068 2 823 245
Net finance costs 27 (828) (828) (651) (651)
Profit before share of result of
associates and joint ventures 1 891 1 594 297 2 417 2 172 245
Share of result of associates and
joint ventures 47 47 58 58
Profit before tax (22) 1 938 1 641 297 2 475 2 230 245
Income tax expense (586) (482) (104) (692) (615) (77)
Profit for the period (24) 1 352 1 159 193 1 783 1 615 168
Tax rate (%) 31,0 28,6
Net profit attributable to:
Owners of Imperial (22) 1 319 1 138 181 1 699 1 558 141
Non-controlling interests (61) 33 21 12 84 57 27
1 352 1 159 193 1 783 1 615 168
Earnings per share (cents)
- Basic (23) 679 586 93 881 808 73
- Diluted (24) 664 573 91 869 798 71
Headline earnings per share (cents)
- Basic (15) 682 587 95 801 728 73
- Diluted (16) 667 574 93 791 720 71
Core earnings per share (cents)
- Basic (8) 795 699 96 861 781 80
- Diluted (8) 777 683 94 849 771 78
The major classes of assets and liabilities of discontinued operations classified at 31 December 2016 as held for sale were as follows:
The major classes of assets and liabilities of the disposal groups are disclosed in note 12.
31 DECEMBER 30 JUNE
2016 2016
Rm Rm
Assets
Goodwill and intangible assets 244 204
Investment in associates and joint ventures 39 40
Property, plant and equipment 104 164
Income tax assets 17 24
Investments and other financial assets 3 264 3 197
Trade and other receivables 235 217
Cash resources 1 346 1 237
Assets of discontinued operations 5 249 5 083
Liabilities
Insurance and investment contracts 1 359 1 384
Income tax liabilities 239 214
Trade, other payables and provisions 1 069 1 140
Liabilities of discontinued operations 2 667 2 738
Investments and other financial assets consists of:
Listed investments at fair value (level 1) 2 576 2 481
Fixed and negotiable deposits at fair value (level 2) 397 589
Reinsurance debtors and other financial assets at amortised cost 291 127
3 264 3 197
The cash flows from discontinued operations were as follows:
31 DECEMBER 31 DECEMBER 30 JUNE
2016 2015 2016
Rm Rm Rm
Cash flows from operating activities 198 159 390
Cash flows from investing activities 103 (30)
Cash flows from financing activities (5) (9) (1)
Condensed consolidated statement of profit or loss
for the six months ended 31 December 2016
UNAUDITED UNAUDITED AUDITED
SIX MONTHS SIX MONTHS FINANCIAL YEAR
ENDED ENDED ENDED
31 DECEMBER 31 DECEMBER 30 JUNE
% 2016 2015* 2016
Notes CHANGE RM RM RM
CONTINUING OPERATIONS
Revenue 3 59 691 58 201 115 738
Net operating expenses (55 544) (54 083) (107 286)
Profit from operations before depreciation and recoupments 4 147 4 118 8 452
Depreciation, amortisation, impairments and recoupments (1 268) (1 326) (2 559)
Operating profit 3 2 879 2 792 5 893
Recoupments from sale of properties, net of impairments 7 6 28
Amortisation of intangible assets arising on business combinations (263) (207) (437)
Impairment of intangible assets arising on business combinations (151) (151)
Other non-operating items 7 (201) 383 (102)
Profit before net finance costs (14) 2 422 2 823 5 231
Net finance costs 8 27 (828) (651) (1 440)
Profit before share of result of associates and joint ventures 1 594 2 172 3 791
Share of result of associates and joint ventures 47 58 133
Profit before tax (26) 1 641 2 230 3 924
Income tax expense (482) (615) (1 049)
Profit for the period from continuing operations (28) 1 159 1 615 2 875
DISCONTINUED OPERATIONS
Profit for the period from discontinued operations 193 168 333
Net profit for the period (24) 1 352 1 783 3 208
Net profit attributable to:
Owners of Imperial 1 319 1 699 3 049
- Continuing operations 1 138 1 558 2 747
- Discontinued operations 181 141 302
Non-controlling interests 33 84 159
- Continuing operations 21 57 128
- Discontinued operations 12 27 31
1 352 1 783 3 208
Earnings per share (cents)
Continuing operations
- Basic (27) 586 808 1 425
- Diluted (28) 573 798 1 388
Discontinued operations
- Basic 27 93 73 156
- Diluted 28 91 71 152
Total operations
- Basic (23) 679 881 1 581
- Diluted (24) 664 869 1 540
* The December 2015 profit and loss has been represented to disclose the impairment of intangible assets arising on business
combinations separate from the amortisation of intangible assets arising on business combinations.
Condensed consolidated statement of comprehensive income
for the six months ended 31 December 2016
UNAUDITED UNAUDITED AUDITED
SIX MONTHS SIX MONTHS FINANCIAL YEAR
ENDED ENDED ENDED
31 DECEMBER 31 DECEMBER 30 JUNE
2016 2015 2016
RM RM RM
Net profit for the period 1 352 1 783 3 208
Other comprehensive income (1 191) 1 387 147
Items that may be reclassified subsequently to profit or loss (1 253) 1 387 306
Exchange (losses) gains arising on translation of foreign operations (836) 909 607
Share of associates' and joint ventures movement in foreign currency translation
reserve 18 16
Reclassification of gain on available-for-sale investment (8)
Movement in hedge accounting reserve (462) 463 (374)
Income tax relating to items that may be reclassified to profit or loss 53 (3) 57
Items that will not be reclassified to profit or loss 62 (159)
Remeasurement of defined benefit obligations 97 (228)
Income tax on remeasurement of defined benefit obligations (35) 69
Total comprehensive income for the period 161 3 170 3 355
Total comprehensive income attributable to:
Owners of Imperial 255 2 915 3 190
Non-controlling interests (94) 255 165
161 3 170 3 355
Earnings per share information
for the six months ended 31 December 2016
UNAUDITED UNAUDITED AUDITED
SIX MONTHS SIX MONTHS FINANCIAL YEAR
ENDED ENDED ENDED
31 DECEMBER 31 DECEMBER 30 JUNE
% 2016 2015 2016
CHANGE RM RM RM
Headline earnings reconciliation
Earnings - basic (22) 1 319 1 699 3 049
Saving of finance costs by associate on potential sale of Imperial shares 21
Earnings - diluted 1 319 1 720 3 049
Recoupment for disposal of property, plant and equipment (IAS 16) (39) (40) (97)
Loss (profit) on disposal of intangible assets (IAS 38) 2 (1) (1)
Impairment of property, plant and equipment (IAS 36) 12
Impairment of intangible assets (IAS 36) 151 167
Impairment of goodwill (IAS 36) 152 258
(Profit) loss on disposal of investments in associates and joint ventures (IAS 28) (6) 2 89
Loss (profit) on disposal of subsidiaries and businesses (IFRS 10) 46 (447) (520)
Impairment loss on assets of disposal groups 90
Reclassification of gain on disposal of available-for-sale investment (IAS 39) (8)
Remeasurements included in share of result of associates and joint ventures 10 2
Tax effects of remeasurements 10 85 60
Non-controlling interests share of remeasurements 1 (66) (63)
Headline earnings - diluted 1 325 1 566 3 046
Saving of finance costs by associate on potential sale of Imperial shares (21)
Headline earnings - basic (14) 1 325 1 545 3 046
Headline earnings per share (cents)
Continuing operations
- Basic (19) 587 728 1 423
- Diluted (20) 574 720 1 386
Discontinued operations
- Basic 30 95 73 156
- Diluted 31 93 71 152
Total operations
- Basic (15) 682 801 1 579
- Diluted (16) 667 791 1 538
Core earnings reconciliation
Headline earnings - basic (14) 1 325 1 545 3 046
Saving of finance costs by associate on potential sale of Imperial shares 21
Headline earnings - diluted (15) 1 325 1 566 3 046
Amortisation of intangible assets arising on business combinations 263 207 437
Foreign exchange gain on inter-group monetary item (92) (92)
Business acquisition costs 38 3 63
Remeasurement of contingent consideration and put option liabilities 10 33 50
Change in economic assumptions on insurance funds 3 18 4
Tax effects of core earnings adjustments (72) (35) (98)
Non-controlling interests share of core earnings adjustments (23) (19) (41)
Core earnings - diluted (8) 1 544 1 681 3 369
Saving of finance costs by associate on potential sale of Imperial shares (21)
Core earning - basic (7) 1 544 1 660 3 369
UNAUDITED UNAUDITED AUDITED
SIX MONTHS SIX MONTHS FINANCIAL YEAR
ENDED ENDED ENDED
31 DECEMBER 31 DECEMBER 30 JUNE
% 2016 2015 2016
CHANGE RM RM RM
Core earnings per share (cents)
Continuing operations
- Basic (10) 699 781 1 589
- Diluted (11) 683 771 1 548
Discontinued operations
- Basic 20 96 80 158
- Diluted 21 94 78 154
Total operations
- Basic (8) 795 861 1 747
- Diluted (8) 777 849 1 702
ADDITIONAL INFORMATION
Net asset value per share (cents) (6) 10 018 10 635 10 287
Dividend per ordinary share (cents) (14) 320 370 795
Number of ordinary shares in issue (million)
- total shares 200,3 202,8 208,1
- net of shares repurchased 196,6 194,2 196,6
- weighted average for basic 194,2 192,8 192,9
- weighted average for diluted 198,7 198,0 198,0
Number of other shares (million)
- Deferred ordinary shares to convert into ordinary shares 7,5 8,3 7,5
Condensed consolidated statement of financial position
at 31 December 2016
UNAUDITED UNAUDITED AUDITED
31 DECEMBER 31 DECEMBER 30 JUNE
2016 2015 2016
NOTES RM RM RM
ASSETS
Goodwill and intangible assets 9 9 764 7 866 7 501
Investment in associates and joint ventures 915 1 618 986
Property, plant and equipment 9 997 11 736 11 465
Transport fleet 5 887 6 372 5 953
Deferred tax assets 1 395 1 245 1 376
Investments and loans 294 357 291
Other financial assets 12 30 8
Vehicles for hire 4 320 3 841 3 469
Inventories 16 377 17 815 16 717
Tax in advance 702 322 483
Trade and other receivables 14 017 14 391 12 712
Cash resources 2 339 2 740 2 317
Assets of discontinued operations 5 249 4 863 5 083
Assets of disposal groups* 12 2 063 1 667 1 469
Total assets 73 331 74 863 69 830
EQUITY AND LIABILITIES
Capital and reserves
Share capital and share premium 1 030 382 1 030
Shares repurchased (613) (742) (1 226)
Other reserves (108) 2 036 1 003
Retained earnings 19 386 18 977 19 418
Attributable to owners of Imperial 19 695 20 653 20 225
Put arrangement over non-controlling interests (1 307) (1 188) (1 307)
Non-controlling interests 882 1 726 884
Total equity 19 270 21 191 19 802
Liabilities
Non-redeemable, non-participating preference shares 441 441 441
Retirement benefit obligations 1 274 1 369 1 531
Interest-bearing borrowings 23 021 20 449 18 396
Maintenance and warranty contracts 3 033 3 229 3 156
Deferred tax liabilities 1 264 1 069 881
Other financial liabilities 2 154 2 438 2 335
Trade, other payables and provisions 19 189 20 731 19 493
Current tax liabilities 700 703 681
Liabilities of discontinued operations 2 667 2 737 2 738
Liabilities of disposal groups* 12 318 506 376
Total liabilities 54 061 53 672 50 028
Total equity and liabilities 73 331 74 863 69 830
* Assets and liabilities relating to other disposal groups. The results of the other disposal groups are included in the results of
continuing operations.
Condensed consolidated statement of cash flows
For the six months ended 31 December 2016
UNAUDITED UNAUDITED AUDITED
SIX MONTHS SIX MONTHS FINANCIAL YEAR
ENDED ENDED ENDED
31 DECEMBER 31 DECEMBER 30 JUNE
% 2016 2015 2016
NOTE CHANGE RM RM RM
Cash flows from operating activities
Cash generated by operations before movements in net
working capital (3) 4 330 4 485 8 952
Movements in net working capital (2 379) (1 194) (828)
Cash generated by operations before interest
and taxes paid (41) 1 951 3 291 8 124
Net finance costs paid 18 (823) (696) (1 461)
Tax paid (660) (945) (1 910)
Cash generated by operations before capital expenditure on
rental assets 468 1 650 4 753
Expansion capital expenditure - rental assets (1 026) (504) (772)
Net replacement capital expenditure - rental assets (373) (1 057) (839)
- Expenditure (1 451) (2 330) (3 539)
- Proceeds 1 078 1 273 2 700
Cash generated by operations after capital expenditure
on rental assets (931) 89 3 142
Cash flows from investing activities
Net (acquisitions) disposals of subsidiaries and businesses (1 671) 726 760
Expansion capital expenditure - excluding rental assets (471) (917) (1 130)
Net replacement capital expenditure - excluding rental assets (546) (584) (1 397)
Net movement in associates and joint ventures 542 (114) 71
Net movement in investments, loans and other
financial instruments (109) 71 (30)
(2 255) (818) (1 726)
Cash flows from financing activities
Hedge cost premium paid (3) (145) (193)
Ordinary shares repurchased* (74) (558)
Dividends paid (991) (1 030) (1 909)
Change in non-controlling interests (89) (355) (439)
Capital raised from non-controlling interests 150 24 26
Net increase in interest-bearing borrowings 2 418 1 071 2 193
1 485 (509) (880)
Net (decrease) increase in cash and cash equivalents (1 701) (1 238) 536
Effects of exchange rate changes on cash resources
in foreign currencies (222) 314 145
Cash and cash equivalents at beginning of period 719 38 38
Cash and cash equivalents at end of period 10 36 (1 204) (886) 719
* The repurchase of the 7 864 456 ordinary shares during the period was an inter-group transaction with no impact on the Group's
cash flows.
Condensed consolidated statement of changes in equity
for the six months ended 31 December 2016
PUT
SHARE ARRANGEMENT
CAPITAL SHARES ATTRIBUTABLE OVER 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 2015 - Audited 382 (668) 1 089 18 065 18 868 (1 473) 1 838 19 233
Total comprehensive income for the period 1 216 1 699 2 915 255 3 170
Net attributable profit for the period 1 699 1 699 84 1 783
Other comprehensive income 1 216 1 216 171 1 387
Movement in statutory reserves 7 (7)
Share-based cost charged to profit or loss 71 71 2 73
Share-based equity reserve transferred to retained earnings on vesting (60) 60
Share-based equity reserve hedge cost (128) (128) (4) (132)
Ordinary dividend paid (840) (840) (840)
Repurchase of 438 300 ordinary shares from the open market at an average price of R169,48 per
share (74) (74) (74)
Realisation on disposal of subsidiaries 17 17 17
Non-controlling interests acquired, net of disposals and shares issued 4 4
Net decrease in non-controlling interests though buy-outs (176) (176) 285 (179) (70)
Non-controlling interests share of dividends (190) (190)
At 31 December 2015 - Unaudited 382 (742) 2 036 18 977 20 653 (1 188) 1 726 21 191
Total comprehensive income for the period (916) 1 191 275 (90) 185
Net attributable profit for the period 1 350 1 350 75 1 425
Other comprehensive income (916) (159) (1 075) (165) (1 240)
Movement in statutory reserves 13 (13)
Share-based cost charged to profit or loss 73 73 2 75
Share-based equity reserve transferred to retained earnings on vesting 5 (5)
Share-based equity reserve hedge cost (55) (55) 4 (51)
Ordinary dividend paid (732) (732) (732)
Repurchase of 2 949 207 ordinary shares from the open market at an average price of R164,11 per
share (484) (484) (484)
Share of changes in net assets of associates and joint ventures (5) (5) (5)
Realisation on disposal of subsidiaries 42 42 42
Non-controlling interests disposed, net of acquisitions and shares issued (75) (75)
Net decrease in non-controlling interests through buy-outs 648 (190) 458 (119) (536) (197)
Non-controlling interest share of dividends (147) (147)
At 30 June 2016 - Audited 1 030 (1 226) 1 003 19 418 20 225 (1 307) 884 19 802
Total comprehensive income for the period (1 127) 1 382 255 (94) 161
Net attributable profit for the period 1 319 1 319 33 1 352
Other comprehensive income (1 127) 63 (1 064) (127) (1 191)
Transfer of reserves on disposal of MiX Telematics Limited (109) 109
Movement in statutory reserves 11 (11)
Share-based cost charged to profit or loss 63 63 63
Share-based equity reserve transferred to retained earnings on vesting 68 (68)
Share-based equity reserve hedge refund 11 11 11
Ordinary dividend paid (831) (831) (831)
Cancellation of 7 864 456 ordinary shares 613 (613)
Realisation on disposal of subsidiaries 45 45 45
Non-controlling interests acquired, net of disposals and shares issued 268 268
Net decrease in non-controlling interests through buy-outs (73) (73) (16) (89)
Non-controlling interests share of dividends (160) (160)
At 31 December 2016 - Unaudited 1 030 (613) (108) 19 386 19 695 (1 307) 882 19 270
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the six months ended 31 December 2016
1. Basis of preparation
The condensed consolidated financial statements have been prepared in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS) and its Interpretations adopted by the International Accounting
Standards Board (IASB) in issue and effective for the Group at 31 December 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 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 condensed
consolidated financial statements do not include all the information required for full annual financial statements and should be
read in conjunction with the consolidated annual financial statements as at and for the year ended 30 June 2016.
These condensed consolidated financial statements have been prepared under the supervision of R Mumford, CA (SA) and were
approved by the board of directors on 20 February 2017.
2. Accounting policies
The accounting policies adopted and methods of computation used in the preparation of the condensed consolidated financial
statements are in accordance with IFRS and are consistent with those of the annual financial statements for the year ended 30
June 2016.
3. New and revised International Financial Reporting Standards in issue but not yet effective
International Financial Reporting Standards that will become applicable to the group in future reporting periods includes IFRS 9
Financial Instruments (effective 1 January 2018), IFRS 15 Revenue from Contracts with Customers (effective 1 January 2018) and
IFRS 16 Leases (effective 1 January 2019) . The details of these standards are outlined in the 30 June 2016 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.
5. Basis of segmentation
In line with the Group's organisational changes as announced on 3rd June 2016 the basis of segmentation for the 2017 financial
year has been revised as follows:
The Logistics division will report segmentally on three sub divisions namely:
- Logistics South Africa
- Logistics African Regions
- Logistics International
The Vehicles division will report segmentally on four sub divisions namely:
- Vehicle Import and Distribution
- Vehicle Retail and Rental
- After Market Parts
- Motor Related Financial Services
The revision resulted in the restatement of certain amounts that was previously disclosed in the segment reports.
31 DECEMBER 31 DECEMBER 30 JUNE
2016 2015 2016
6. Foreign exchange rates
SA Rand : Euro
- closing 14,40 16,79 16,31
- average 15,31 15,03 16,10
SA Rand : US Dollar
- closing 13,69 15,46 14,70
- average 13,96 13,62 14,51
SA Rand : Pound Sterling
- closing 16,89 22,79 19,58
- average 17,83 20,87 21,47
SA Rand : Australian Dollar
- closing 9,85 11,24 10,95
- average 10,52 9,84 10,56
UNAUDITED UNAUDITED AUDITED
SIX MONTHS SIX MONTHS FINANCIAL YEAR
ENDED ENDED ENDED
31 DECEMBER 31 DECEMBER 30 JUNE
2016 2015 2016
RM RM RM
7. Other non-operating items
Remeasurement of financial instruments not held-for-trading (123) 93 (122)
Foreign exchange (losses) gains on foreign currency monetary items (121) 126 (72)
Charge for remeasurement of put option liability (13) (32) (64)
Remeasurement of contingent consideration liabilities 3 (1) 14
Reclassification of gain on disposal of available-for-sale investments 8
Capital items (78) 290 20
Impairment of goodwill (152) (258)
Profit (loss) on disposal of investments in associates and joint ventures 6 (2) (89)
(Loss) profit on disposal of subsidiaries and businesses (46) 447 520
Impairment loss on assets of disposal group (90)
Business acquisition costs (38) (3) (63)
(201) 383 (102)
8. Net finance costs
Net interest paid (823) (696) (1 462)
Fair value (loss) gain on interest-rate swap instruments (5) 45 22
(828) (651) (1 440)
9. Goodwill and intangible assets
Goodwill
Cost 7 106 6 642 6 286
Accumulated impairments (409) (1 078) (862)
6 697 5 564 5 424
Carrying value at beginning of period 5 424 5 018 5 018
Net acquisition (disposal) of subsidiaries and businesses 1 987 (111) (130)
Impairment charge (152) (258)
Reclassified to assets held for sale (53) (28)
Currency adjustment (714) 862 822
Carrying value at end of period 6 697 5 564 5 424
Intangible assets 3 067 2 302 2 077
Goodwill and intangible assets 9 764 7 866 7 501
10. Cash and cash equivalents
Cash resources 2 339 2 740 2 317
Cash resources included in assets of discontinued operations and of disposal
groups 1 379 1 211 1 356
Short-term loans and overdrafts (Included in interest-bearing borrowings) (4 922) (4 837) (2 954)
(1 204) (886) 719
11. Fair value of financial instruments
11.1 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*
31 DECEMBER 2016 Rm Rm
Listed corporate bonds (included in interest-bearing borrowings) 5 342 5 287
Listed non-redeemable, non-participating preference shares 441 357
* 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.
11.2 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 discontinued operations refer above.
TOTAL LEVEL 2 LEVEL 3
31 DECEMBER 2016 Rm Rm Rm
Financial assets carried at fair value
Swap instruments (Included in Other financial assets) 12 12
Foreign exchange contracts and other derivative instruments
(Included in Trade and other receivables) 13 13
Financial liabilities carried at fair value
Put arrangement over non-controlling interests
(Included in Other financial liabilities) 1 738 1 738
Contingent consideration (Included in Other financial liabilities) 47 47
Swap instruments (Included in Other financial liabilities) 151 151
Foreign exchange contracts (Included in Trade, other payables and provisions) 395 395
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 period.
11.3 Movements in level 3 financial instruments measured at fair value
The following table shows a reconciliation of the opening and closing balances of level 3 financial liabilities carried at fair value.
PUT OPTION CONTINGENT
LIABILITIES CONSIDERATION TOTAL
FINANCIAL LIABILITIES Rm Rm Rm
Carrying value at beginning of period 1 875 19 1 894
Arising on acquisition of businesses 36 36
Fair valued through profit or loss 13 (3) 10
Settlements (4) (4)
Currency adjustments (150) (1) (151)
Carrying value at the end of the year 1 738 47 1 785
Level 3 sensitivity information
The fair values of the level 3 financial liabilities of R1 785 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 31 December 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 liability Income approach Earnings growth 1 738 8 (118)
Contingent consideration liability Income approach Assumed profits 47 (7)
12. Assets and liabilities of the disposal groups
The assets of the disposal groups includes businesses in Logistics South Africa, the Logistics African Regions, the Vehicle Retail
and Rental and the After Market Parts divisions as well as land and buildings that are held for sale. These assets will be
recovered through disposal rather than through continuing use.
UNAUDITED UNAUDITED AUDITED
31 DECEMBER 31 DECEMBER 30 JUNE
2016 2015 2016
RM RM RM
Assets
Goodwill and intangible assets 3 56 34
Investments in associates and joint ventures 36 476
Property, plant and equipment 1 414 96 114
Transport fleet 26 53
Income tax assets 57 19 65
Investments and other financial assets 16 8 17
Vehicles for hire 696
Inventories 350 346 340
Trade and other receivables 164 341 251
Cash resources 33 71 119
Assets of disposal groups 2 063 1 667 1 469
Liabilities
Interest-bearing borrowings 34 21
Income tax liabilities 1 64 3
Trade, other payables and provisions 283 421 373
Liabilities of disposal groups 318 506 376
UNAUDITED UNAUDITED AUDITED
31 DECEMBER 31 DECEMBER 30 JUNE
2016 2015 2016
RM RM RM
13. Contingencies and commitments
Capital commitments 860 1 213 1 309
Contingent liabilities 723 457 798
14. Acquisitions and disposals during the PERIOD
Acquisitions
Refer below for acquisitions during the period.
Disposals
The group disposed of its controlling interest in C2 Computers Proprietary Limited retaining a non-controlling interest of 49%.
15. Events after the reporting period
Acquisition of Surgipharm
The group has entered into an agreement to acquire a 70% interest in Surgipharm Limited, a leading pharmaceutical distributor
in Kenya, for a consideration of R470 million (USD35 million). This is subject to obtaining regulatory approval.
Disposal of Regent
The disposal of the Regent Group's non-South African operations (Regent Insurance Botswana, Regent Life Botswana, Regent
Zambia, Lesotho Life and Lesotho Insurance, collectively, "Regent Rest of Africa") to Hollard International Holdings for an upfront
consideration of R697 million has been declared unconditional on 31 January 2017 in accordance with its terms, which included
regulatory approvals from the Botswana and Lesotho authorities. The disposal of Regent Group, excluding Regent Rest of Africa,
remains subject to approval by the South African Regulatory Authorities.
Disposal of Jurgens Ci
The disposal of Jurgens was completed on 1 February 2017.
Dividend declaration
Shareholders are advised that a preference and an ordinary dividend has been declared by the board of Imperial on 20 February
2017. For more details please refer to the dividend declaration.
Business combinations during the period
INTEREST PURCHASE
OPERATING DATE ACQUIRED CONSIDERATION
BUSINESSES ACQUIRED NATURE OF BUSINESS SEGMENT ACQUIRED (%) RM
Palletways Group Limited* Express delivery solutions for Logistics July 2016
small consignments of palletised International
freight across Europe 95,2 1 683
Itumele Bus Lines Proprietary Consumer bus operations in the Logistics November
Limited Free State province of South African 2016
Africa Regions 55 147
Individually immaterial acquisitions 56
1 886
* The total purchase consideration of R3.0 billion disclosed in the June 2016 annual report included preference shares and subordinated loans acquired amounting
to R1,317 million, thereby arriving at the purchase consideration of R1,683 million above.
Fair value of assets acquired and liabilities assumed at date of acquisition:*
INDIVIDUALLY
ITUMELE IMMATERIAL
R MILLION PALLETWAYS BUS LINES ACQUISITIONS TOTAL
Assets
Intangible assets (excluding goodwill) 1 360 110 17 1 487
Property, plant and equipment 32 16 11 59
Transport fleet 269 269
Investments, loans, associates and joint ventures 12 7 19
Inventories 3 14 17
Trade and other receivables 617 54 56 727
Cash resources 141 82 3 226
2 153 557 94 2 804
Liabilities
Retirement benefit obligations 9 9
Deferred tax liabilities 264 70 1 335
Interest-bearing borrowings 1 350 141 1 491
Trade, other payables and provisions 773 78 65 916
Current tax liabilities 17 1 18
2 413 290 66 2 769
Acquirees' carrying amount at acquisition (260) 267 28 35
Non-controlling interests (8) (121) (7) (136)
Net assets acquired (268) 146 21 (101)
Purchase consideration transferred 1 683 147 56 1 886
Cash paid 1 683 142 25 1 850
Contingent consideration 5 31 36
Excess of purchase price over net assets acquired 1 951 1 35 1 987
* The initial accounting for the business combinations is incomplete and based on provisional figures.
Reasons for the acquisitions
The Group acquired a 95,2% shareholding in Palletways. This acquisition is in line with Imperial's strategic intent to expand its presence beyond South Africa
through the acquisition of asset light logistics businesses that benefit from Imperial's existing footprint and capabilities. Palletways provides an express
delivery solution for small consignments of palletised freight through more than 400 depots and 14 hubs, which collects and distribute 40 000 daily or 8
million pallets annually across 20 European countries where it currently handles one in every 4 pallets handled by palletised freight networks.
The acquisition of 55% shareholding in Itumele Bus Lines, is in line with the Group's strategy to diversify into other related industries and allows entry into
the commuter bus service market. Itumele's primary business is providing public transport services on behalf of the provincial government to commuters in
and around Bloemfontein. Founded in 1975, the operation comprises a fleet of 253 commuter busses and 32 luxury coaches. Itumele transports
approximately 50 000 passengers daily and its busses travel approximately 17 million kilometres a year.
The other businesses were acquired to complement and expand our transport and business solutions through the acquisition of a depot in Europe and an
import and export solutions business in South Africa.
Details of contingent consideration
The contingent consideration requires the Group to pay the vendors an additional total amount of R36 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 R27 million and have been recognised as an expense in 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 period contributed revenue of R3 152 million, operating profit of R180 million and after tax
profit of R34 million. The after tax profit of R34 million includes the after tax impact of the funding cost of R34 million calculated on the cash consideration
paid on acquisitions and the amortisation of intangible assets arising out of the business combinations of R85 million.
Had all the acquisitions been consolidated from 1 July 2016, they would have contributed revenue of R3 335 million, operating profit of R204 million and
after tax profit of R40 million. The Group's continuing revenue for the period would have been R59 874 million, operating profit would have been R2 903
million and after tax profit R1 165 million.
Separate identifiable intangible assets
As at the acquisition date the fair value of the separate identifiable intangible assets was R1 487 million. This fair value, which is classified as level 3 in the
fair value hierarchy, was determined using the Multi-period Excess Earnings Method (MEEM) valuation technique for contract based intangible assets and the
Relief-form-royalty method for the trademark.
The significant unobservable valuation inputs were as follows:
ITUMELE
PALLETWAYS BUS LINES
% %
Trademark
- Discount rates 9,1
- Royalty rate 1,0
Contract based intangible assets
- Weighted average discount rates 6.7 - 7.3 17,0
- Terminal growth rates 1.0 7,1
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 R773 million of which R45 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
LOGISTICS MOTUS
VEHICLE AFTER MOTOR RELATED HEAD OFFICE
IMPERIAL LOGISTICS LOGISTICS LOGISTICS BUSINESSES TOTAL IMPORT AND VEHICLE RETAIL MARKET FINANCIAL BUSINESSES TOTAL AND
Profit or loss - Continuing operations HOLDINGS SOUTH AFRICA AFRICAN REGIONS INTERNATIONAL HELD FOR SALE LOGISTICS DISTRIBUTION AND RENTAL PARTS SERVICES HELD FOR SALE ELIMINATIONS MOTUS ELIMINATIONS
R million 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
Revenue 59 691 58 201 8 217 7 440 4 874 5 341 12 168 9 025 603 2 214 25 862 24 020 8 903 9 000 29 285 28 575 2 990 2 769 855 801 427 1 989 (7 018) (7 041) 35 442 36 093 (1 613) (1 912)
- South Africa 34 063 33 744 8 217 7 440 118 293 8 335 7 733 8 600 8 965 21 292 20 545 2 974 2 767 855 801 324 1 889 (6 702) (7 041) 27 343 27 924 (1 614) (1 913)
- Rest of Africa 6 177 6 843 4 874 5 341 485 640 5 359 5 981 303 35 815 824 16 2 (316) 818 861 1
- International 19 451 17 614 12 168 9 025 1 281 12 168 10 306 7 178 7 208 103 100 7 281 7 308 2
Operating profit 2 879 2 792 498 416 397 395 447 384 (42) 4 1 300 1 199 390 384 694 681 173 157 388 336 (2) 113 (77) (76) 1 566 1 595 13 (1)
- South Africa 1 844 1 829 498 416 (37) (6) 461 410 387 384 491 494 174 159 388 336 (1) 118 (77) (76) 1 362 1 415 20 5
- Rest of Africa 455 446 397 395 (5) (3) 392 392 3 62 56 (1) (2) 64 54
- International 580 517 447 384 13 447 397 141 131 (1) (5) 140 126 (7) (6)
Depreciation, amortisation,
impairments and recoupments (1 524) (1 678) (262) (302) (141) (147) (427) (341) (47) (830) (837) (309) (330) (347) (354) (19) (17) (91) (81) (4) (132) 74 63 (696) (851) 2 10
- South Africa (908) (1 088) (265) (302) (7) (265) (309) (309) (330) (299) (293) (19) (17) (91) (81) (4) (131) 74 63 (648) (790) 2 11
- Rest of Africa (156) (163) (141) (147) (1) (141) (148) (15) (15) (15) (15)
- International (460) (427) (427) (341) (39) (427) (380) (33) (46) (1) (33) (46) (1)
Interest expense (828) (651) (162) (146) (107) (77) (118) (79) (11) (20) (398) (322) (148) (158) (269) (217) (26) (23) (11) 2 (9) (46) 72 74 (391) (368) (39) 39
- South Africa (557) (442) (162) (146) (6) (6) (168) (152) (155) (159) (217) (176) (26) (23) (11) 2 (8) (45) 72 74 (345) (327) (44) 37
- Rest of Africa (121) (87) (107) (77) (5) (4) (112) (81) 7 1 (17) (8) (10) (7) 1 1
- International (150) (122) (118) (79) (10) (118) (89) (35) (33) (1) (1) (36) (34) 4 1
Profit before tax* 1 681 1 937 314 255 53 321 184 223 (51) (28) 500 771 263 124 415 440 164 152 377 372 (15) 40 (5) 2 1 199 1 130 (18) 36
- South Africa 1 318 1 299 314 255 (42) (13) 272 242 257 121 272 326 165 154 377 372 (9) 36 (5) 2 1 057 1 011 (11) 46
- Rest of Africa 92 324 53 321 (9) (24) 44 297 6 3 43 26 (1) (2) 48 27
- International 271 314 184 223 9 184 232 100 88 (6) 4 95 92 (7) (10)
Additional segment information -
Continuing operations
Analysis of revenue by type
- Sale of goods 34 738 35 336 558 506 3 605 3 907 2 499 666 4 662 5 081 2 740 2 756 24 263 23 589 2 961 2 768 337 1 389 (223) (246) 30 078 30 256 (2) (1)
- Rendering of services 24 953 22 865 7 668 6 933 1 203 1 387 12 168 9 023 104 1 548 21 143 18 891 62 98 3 342 3 047 1 1 338 332 49 478 (3) 3 790 3 956 21 18
59 691 58 201 8 226 7 439 4 808 5 294 12 168 9 025 603 2 214 25 805 23 972 2 802 2 854 27 605 26 636 2 962 2 768 338 332 386 1 867 (226) (245) 33 867 34 212 18 17
Inter-group revenue (9) 1 66 47 57 48 6 101 6 146 1 680 1 939 28 1 517 469 41 122 (6 792) (6 796) 1 575 1 881 (1 632) (1 929)
59 691 58 201 8 217 7 440 4 874 5 341 12 168 9 025 603 2 214 25 862 24 020 8 903 9 000 29 285 28 575 2 990 2 769 855 801 427 1 989 (7 018) (7 041) 35 442 36 093 (1 613) (1 912)
Analysis of depreciation, amortisation,
impairments and recoupments (1 524) (1 678) (262) (302) (141) (147) (427) (341) (47) (830) (837) (309) (330) (347) (354) (19) (17) (91) (81) (4) (132) 74 63 (696) (851) 2 10
- Depreciation and amortisation (1 298) (1 361) (265) (297) (56) (62) (283) (268) (47) (604) (674) (315) (216) (341) (340) (17) (15) (91) (81) (6) (91) 74 63 (696) (690) 2 2
- Recoupments and impairments 37 41 20 11 1 7 8 15 29 33 6 1 5 2 4 8 9 (1)
- Amortisation and impairment of
intangible assets arising on
business combinations (263) (358) (17) (16) (86) (92) (152) (88) (255) (196) (115) (6) (9) (2) (2) (45) (8) (171) 9
Associate income included in pre-tax
profits 47 58 1 1 16 15 8 13 25 29 (2) (15) (1) 21 19 38 2 18 49 4 (20)
Operating margin % 4,8 4,8 6,1 5,6 8,1 7,4 3,7 4,3 5,0 5,0 4,4 4,3 2,4 2,4 5,8 5,7 45,4 41,9 4,4 4,4
* Refer to glossary of terms below.
LOGISTICS MOTUS
VEHICLE AFTER MOTOR RELATED
IMPERIAL LOGISTICS LOGISTICS LOGISTICS TOTAL IMPORT AND VEHICLE RETAIL MARKET FINANCIAL TOTAL HEAD OFFICE
Financial position HOLDINGS SOUTH AFRICA AFRICAN REGIONS INTERNATIONAL LOGISTICS DISTRIBUTION AND RENTAL PARTS SERVICES ELIMINATIONS MOTUS AND ELIMINATIONS
R million 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015
Assets
Intangible assets 9 764 7 866 1 009 1 001 2 258 2 620 5 636 3 259 8 903 6 880 169 253 378 433 285 294 6 1 833 986 28
Property plant and equipment 9 997 11 736 1 004 1 763 642 703 2 071 2 344 3 717 4 810 509 829 5 387 5 815 405 293 9 8 1 3 6 311 6 948 (31) (22)
Transport fleet 5 887 6 372 2 591 2 637 345 486 2 990 3 290 5 926 6 413 (39) (41)
Vehicles for hire 4 320 3 841 1 647 1 595 2 084 1 938 1 987 1 658 (1 398) (1 343) 4 320 3 848 (7)
Investments in associates 666 1 355 29 11 290 384 153 175 472 570 (44) (42) 39 47 120 104 73 631 188 740 6 45
Inventories 16 377 17 815 327 301 1 245 1 830 316 348 1 888 2 479 5 045 5 256 8 241 8 581 1 015 1 349 361 444 (155) (154) 14 507 15 476 (18) (140)
Trade and other receivables 14 017 14 391 4 146 3 933 1 480 1 829 3 769 3 575 9 395 9 337 2 613 3 040 2 792 2 740 563 674 730 775 (2 100) (1 914) 4 598 5 315 24 (261)
Other financial assets 38 30 9 7 1 5 5 14 13 4 4 85 85 27 116 89 (92) (72)
Cash resources 31 31 31
Operating assets* 61 066 63 437 9 115 9 653 6 260 7 853 14 940 12 996 30 315 30 502 9 943 10 935 18 921 19 554 2 388 2 714 3 245 3 638 (3 624) (3 408) 30 873 33 433 (122) (498)
- South Africa 33 869 35 636 9 115 9 653 9 115 9 653 9 484 10 788 13 016 12 892 2 372 2 578 3 245 3 633 (3 147) (3 271) 24 970 26 625 (218) (642)
- Rest of Africa 7 197 8 719 6 260 7 853 6 260 7 853 459 147 939 843 16 14 (477) (138) 937 866
- International 20 002 19 082 14 940 12 996 14 940 12 996 4 966 5 819 122 1 4 966 5 942 96 144
Liabilities
Retirement benefit obligations 1 274 1 369 1 274 1 369 1 274 1 369
Maintenance and warranty contracts 3 033 3 229 102 108 2 942 3 093 3 044 3 201 (11) 28
Trade, other payables and provisions 19 189 20 731 4 043 3 470 2 063 2 694 3 261 3 565 9 367 9 729 4 730 4 929 7 134 7 605 779 1 026 481 509 (3 404) (2 899) 9 720 11 170 102 (168)
Other financial liabilities 417 622 64 33 79 163 1 18 144 214 41 47 26 29 5 56 2 72 135 201 274
Operating liabilities* 23 913 25 951 4 107 3 503 2 142 2 857 4 536 4 952 10 785 11 312 4 873 5 084 7 160 7 634 784 1 082 3 423 3 604 (3 404) (2 899) 12 836 14 505 292 134
- South Africa 14 135 14 255 4 107 3 503 4 107 3 503 4 613 4 960 3 860 3 960 782 999 3 423 3 604 (2 947) (2 759) 9 731 10 764 297 (12)
- Rest of Africa 2 540 3 348 2 142 2 857 2 142 2 857 260 124 593 502 2 5 (457) (140) 398 491
- International 7 238 8 348 4 536 4 952 4 536 4 952 2 707 3 172 78 2 707 3 250 (6) 146
Net working capital 11 205 11 475 430 764 662 965 824 358 1 916 2 087 2 928 3 367 3 899 3 716 799 997 610 710 1 149 831 9 385 9 621 (96) (233)
- South Africa 8 314 9 056 430 764 429 764 2 731 3 344 2 728 2 645 787 1 005 610 710 1 169 831 8 025 8 535 (141) (243)
- Rest of Africa 1 025 1 169 662 965 662 965 197 23 174 175 12 7 (20) 363 205 (1)
- International 1 866 1 250 824 358 824 358 997 896 (15) 997 881 45 11
Net debt 21 122 18 150 2 838 3 172 2 234 2 892 6 382 3 362 11 454 9 426 5 272 5 210 3 333 3 332 748 754 (875) (1 231) (298) 8 478 7 767 1 190 957
- South Africa 12 349 11 248 2 838 3 172 2 838 3 172 5 266 5 174 2 441 2 323 729 710 (875) (1 231) (298) 7 560 6 678 1 951 1 398
- Rest of Africa 2 471 3 246 2 234 2 892 2 234 2 892 6 36 212 308 19 10 237 354
- International 6 302 3 656 6 382 3 362 6 382 3 362 681 701 34 682 735 (761) (441)
Net capital expenditure 2 416 3 062 210 369 48 228 353 513 611 1 110 714 1 339 893 353 250 22 578 453 611 301 1 824 1 866 19 86
- South Africa 1 942 2 226 210 369 210 369 714 1 339 822 261 249 21 578 453 611 301 1 751 1 773 19 84
- Rest of Africa 84 293 48 228 48 228 34 62 1 1 36 63 2
- International 390 543 353 513 353 513 37 30 37 30
* See glossary of terms below.
Note: The segmental information for the financial position gives details on operating assets and liabilities excluding discontinued operations and assets
held for sale. For a further appreciation of the assets, liabilities, interest bearing debt and equity, refer to the Statement of Financial Position.
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 of discontinued operations, assets of disposal
group and cash resources in respect of non-financial services segments.
Operating liabilities total liabilities less interest-bearing borrowings, tax liabilities, put option liabilities, liabilities of
discontinued operation and liabilities of disposal group.
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 by using an after tax operating profit adjusted
by income from associates. 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 calculated by multiplying the cost of each capital component by its proportional weight,
(WACC) (%) 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: 21/02/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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