IMPERIAL HOLDINGS LIMITED - Imperial Holdings Limited Preliminary Summarised Audited Results for the year ended 30 June 2018

Release Date: 21/08/2018 07:05
Code(s): IPLP IPL
 
Wrap Text
Imperial Holdings Limited Preliminary Summarised Audited Results for the year ended 30 June 2018

IMPERIAL HOLDINGS LIMITED 
Registration number: 1946/021048/06 
Ordinary share code: IPL 
ISIN: ZAE000067211 
Preference share code: IPLP 
ISIN: ZAE000088076
("Imperial Holdings" or "company" or "group")

IMPERIAL HOLDINGS LIMITED PRELIMINARY SUMMARISED AUDITED RESULTS
FOR THE YEAR ENDED 30 JUNE 2018

Imperial Holdings is a JSE listed South African holding company, employing over 48 000 people in 33 mainly 
African and Eurozone countries, operating exclusively in the logistics and vehicle sectors, as: 
- Imperial Logistics: a mainly African and European provider of integrated outsourced value-adding logistics, 
  supply chain and route-to-market solutions, customised to ensure the relevance and competitiveness of its 
  clients, generating 40% and 44% of group* revenue and operating profit respectively, with 67% of operating 
  profit generated outside South Africa; and
- Motus: an integrated motor vehicle group, operating across the value chain (import, distribution, retail, 
  rental, aftermarket parts and vehicle-related financial services) generating 60% and 56% of group* revenue 
  and operating profit respectively, with 14% of operating profit generated outside South Africa. 
* Excludes head office and eliminations.

At a glance

Imperial Logistics
Overview and key investment highlights 
Imperial Logistics is an integrated outsourced logistics service provider with a diversified presence across Africa
and Europe. With its strong regional growth platforms, specialist capabilities customised to serve multinational clients
in attractive industry verticals, and  asset-right” business model, Imperial Logistics is expected to deliver sustainable
revenue growth, enhanced profitability and a stable dividend. Improvements in asset mix and cash flow, and plans to
achieve targeted returns on capital in excess of weighted average cost of capital (WACC), will support this expectation.

Ranked in the top 25 global third-party logistics (3PL) providers as published by Armstrong & Associates Inc 
(#15 for land-based revenue in 2017), with a presence in 33 countries on five continents and approximately 
30 000 employees, Imperial Logistics' key investment highlights include: 
- Track record for consistent growth: proven ability to acquire, develop and leverage specialist capabilities to
  establish growth platforms in emerging and advanced markets;
- Leading positions in regional markets provide platforms for sustainable growth: market leader in South Africa, 
  a leader in selected industries (consumer packaged goods (CPG) and pharmaceuticals) in the African Regions and 
  in certain specialised capabilities in Europe;
- Competitive differentiation centred on agility and customisation: specialised capabilities across the value chain 
  enable customised and integrated solutions, with service offerings and operating models tailored to client 
  requirements and market maturity;
- Trusted partner to multinational clients: quality contract portfolio in high-growth and defensive industries, with 
  partnerships demonstrating reach, capabilities, assets, innovation and legitimacy;
- Vision to unlock benefits of  one Imperial Logistics”: strategy focused on sustainable revenue growth, enhanced
  returns and improved competitiveness, with initiatives to drive substantial organic growth enabled by 
  differentiated approach to digitalisation and innovation, and enhanced financial flexibility supporting 
  selective acquisitive growth;
- "Asset-right" business model underpins financial profile: more optimal asset mix and targeted returns on capital,
  support prospects for sustainable revenue growth and enhanced profitability; and
- Strong and committed leadership: highly experienced, long-serving management team and a strong independent board.

Motus
Overview and key investment highlights 
Motus is a diversified (non-manufacturing) service provider to the automotive sector with unrivalled scale and scope
in South Africa, and a selected international presence in the United Kingdom and Australia. Motus' unique business model
is fully integrated across the motor value chain - Import and Distribution, Retail and Rental, Motor Related Financial
Services and Aftermarket Parts. This business model provides diversified service offerings, significant annuity earnings
underpin, maximises revenue and income opportunities, and provides returns in excess of WACC, enabling Motus to maintain
sustainable free cash flow and pay an attractive dividend.

Supported by over 18 300 employees and as southern Africa's largest vehicle group, Motus' key investment highlights
include:
- Diversified (non-manufacturing) service provider in the automotive sector with a leading position in South Africa and
  selected international presence (UK and Australia);
- Fully integrated business model across the vehicle value chain - Import and Distribution, Retail and Rental, Motor
  Related Financial Services and Aftermarket Parts;
- Unrivalled scale in South Africa underpins a differentiated value proposition to original equipment manufacturers
  (OEMs), customers and business partners, providing multiple customer touch points supporting resilience and 
  customer loyalty through the entire vehicle ownership cycle;
- Access to annuity income streams, sustainable free cash flow generation with best-in-class earnings, return on
  invested capital exceeding WACC, providing a platform for an attractive dividend yield;
- Defined organic growth trajectory through portfolio optimisation, continuous operational enhancements and innovation,
  with a selective acquisition strategy outside South Africa leveraging best-in-class expertise; and
- Highly experienced management team with deep industry knowledge of regional and global markets, and a proven track
  record with years of collective experience. 

Motus is reported as a discontinued operation in these results for the financial year ended 30 June 2018.

Group financial highlights

- Record annual revenue up 11% to R128,7 billion
- Operating profit up 6% to R6,4 billion
- EPS up 38% to 1 681 cents per share
- HEPS up 27% to 1 570 cents per share
- Free cash (post-maintenance capital expenditure) up 17% to R5,0 billion (2017: R4,3 billion)
- Free cash conversion ratio of 1,6 times in line with 2017
- Net debt to equity ratio (including preference shares as debt) improved significantly to 50% from 74% 
  in June 2017 and 84% in December 2017
- Return on equity 15,0% (2017: 12,7%)
- Return on invested capital 12,9% (2017: 11,3%)
- Weighted average cost of capital 9,7% (2017: 9,0%)
- Full-year dividend up 9% to 710 cents per share; 45% of HEPS (2017: 650 cents per share)

Note: ROE, ROIC and WACC are calculated on a rolling 12-month basis, excluding Regent. Total EPS and HEPS excluding 
Regent in the prior year.

Results overview
- Imperial produced solid results and recorded an improvement in all key financial metrics in the 12 months to 
  30 June 2018, supported by acquisitions, increased vehicle sales and a good performance from Motus. Imperial 
  Logistics performed satisfactorily in mixed trading conditions. 
- Excluding businesses held for sale, total revenue and operating profit for the group increased by 13% and 7% 
  respectively. 
- Excluding current and prior period acquisitions and disposals, total revenue and operating profit for the group
  increased by 5% and 2% respectively.
- Operating margin declined to 5,0% from 5,2%, resulting from a reduction in sales of luxury vehicle brands in 
  favour of smaller, lower-margin entry-level vehicles, and the acquisition by Motus of the lower-margin 
  Pentagon (UK) and SWT (Australia). 
- Revenue generated outside South Africa increased 21% to R59,0 billion (45% of group revenue) and operating profit
  generated outside South Africa increased 6% to R2,4 billion (37% of group operating profit).
- A full reconciliation from earnings to headline earnings is provided in the group financial performance section. 
  As reported at the interim results, core earnings is no longer a relevant financial measure and was discontinued 
  in the 2018 financial year. 
- Net working capital of R8,8 billion improved by 2% from R9,0 billion in June 2017. Imperial Logistics working capital 
  increased by R1,5 billion as debtor and creditor levels normalised to more sustainable levels when compared to F2017. 
  The acquisitions, mainly Surgipharm, also impacted working capital in F2018. Motus working capital decreased by 
  R1,7 billion mainly due to a reduction in inventory and improved supplier credit terms. We expect inventory 
  levels to normalise in H1 F2019.
- Disposals of non-strategic businesses and properties during the 12-month period generated proceeds of R4,2 billion. 
  Net assets held for sale amounted to R234 million, comprising mainly non-strategic properties in Motus.
- Net debt to equity (including preference shares as debt) improved significantly to 50% from 74% in June 2017 and 
  84% in December 2017 resulting mainly from cash of R4,2 billion received from the disposal of non-strategic 
  businesses and properties and a 37% improvement in cash generated from operating activities of R5,7 billion. 
- Free cash flow increased by 17% to R5,0 billion from R4,3 billion mainly due to a 37% increase in cash generated 
  from operating activities of R5,7 billion (2017: R4,2 billion).
- A final cash dividend of 387 cents per ordinary share (2017: 330 cents per share) has been declared.

Environment
Imperial's activities on the African continent produced 64% and 76% respectively of group revenues and operating
profits during the 12 months to June 2018, with the remainder generated mainly in Europe and the United Kingdom. 
Trading conditions in Imperial's markets remain mixed. 

South Africa
Despite improved sentiment, the economy contracted sharply in the second half of F2018 in South Africa, where R70,0
billion or 55% of group revenue and R4,0 billion or 63% of group operating profit was generated in the 12 months to 30
June 2018. Notwithstanding some monetary easing, high unemployment, low economic growth, tax rate increases and static
household income resulted in consumer affordability remaining under pressure. 

The impact of this environment on Imperial Logistics' operating profit, 33% of which is generated in South Africa, has
been depressed volumes and competitive pressures, resulting in contract renewals at lower margins. This business was
also directly impacted by lacklustre consumer spending, high fuel prices and social unrest. The impact on the operating
profit of Motus, approximately 86% of which is generated in South Africa, has been a low-growth trading environment, 
where national vehicle unit sales as reported by NAAMSA increased by 2%. The luxury brand segment remains under severe 
pressure as consumer affordability constraints and buying down trends continue.

Rest of Africa
The recovery in commodity prices, gradually improving domestic demand and some policy reforms improved economic
prospects in most countries in sub-Saharan Africa, where R12,0 billion or 9% of group revenue and R853 million or 
13% of group operating profit was generated in the 12 months to 30 June 2018. 

However, the performances of Imperial's businesses in the rest of Africa (predominantly Logistics) were negatively
impacted by subdued growth, recessionary conditions and political instability in certain markets, and the R/USD
exchange rate strengthening by 5% on average during the year. The increasingly competitive and uncertain donor aid 
market resulted in lower than expected volumes and reduced margins.

Eurozone, United Kingdom (UK) and Australia
Our international operations generated R46,9 billion or 36% of group revenue and R1,5 billion or 24% of group
operating profit in the 12 months to 30 June 2018.

Economic conditions in Europe were positive. The continuing economic expansion in Europe has resulted in unemployment
in the EU and the Euro area decreasing to below pre-global financial crisis levels. However, certain sectors in which 
we operate remain under pressure, eg steel. The US tariffs on Chinese products will likely divert trade flows from China 
to Europe, particularly steel, which could push steel prices down further and could result in reduced exports for our
automotive customers. Our German shipping operations were negatively impacted by low water levels on the River Rhine 
in the first half of F2018. Hot weather conditions since July 2018 have again resulted in low water levels. Palletways'
performance was hindered by toughening economic conditions in the UK. The new EU emissions regulation stipulating lower 
emission thresholds and process for approval, will lead to OEMs reducing vehicle production volumes in H1 F2019, 
and negatively impact sales of vehicles manufactured in Europe.

Economic growth and the passenger vehicle market in the UK are being depressed by the uncertainties arising from
Brexit and consumers switching from diesel vehicles to petrol vehicles. Latest forecasts indicate an overall decline in 
the UK vehicle market in calendar 2018 with the passenger vehicle market forecast to decline by over 5% and the heavy
commercial vehicles sector by approximately 6%. The Australian vehicle market recorded growth despite being fragmented 
and highly competitive, but margins on new vehicles remain under pressure. 

Strategy and update on the proposed unbundling 
From late 2014, a fundamental transformation was initiated to unlock intrinsic value within the group. Touching every
part of the organisation, the changes sought to retain the entrepreneurial creativity and capital management excellence
that had underpinned the group's past success, while ensuring that the structure, strategies and value propositions of
its divisions were clarified, simplified and focused, for sustainable competitive advantage, growth and returns. This
transformation and development of Imperial was centred around strategic clarity, managerial focus and shareholder insight.
The first was achieved through portfolio rationalisation, the second through organisation structure and the third through 
disclosure. The substantial portfolio rationalisation resulted in the group disposing of assets that did not fit the
group and underlying business unit's strategies, or did not generate sufficient returns on capital or executive effort,
and acquiring those that did. Since 2014, as many as 55 businesses and 90 properties were sold that generated revenues 
of R14,4 billion, operating profit of R1,1 billion and released capital of R7,0 billion. In total, R5,7 billion was
invested in acquiring 17 strategically aligned high-quality assets that generated revenue of R14,2 billion and operating
profit of R1,0 billion in their first full year of operation, and which are expected to deliver sustainable organic 
growth and enhanced returns and cash flows in the future.

The above-mentioned approach exposed the absence of operational synergies and resulted in the group consolidating its
logistics and automotive operating companies and assets within two large, self-sufficient, multinational companies,
Imperial Logistics (from 1 July 2016) and Motus (from 1 January 2017), each with its own board, chief executive officer,
executive committee and increasingly self-sustaining balance sheets, and with decreasing functional support from the
holding company. Appropriate executive management changes were made to accommodate the new structure and the succession 
of retiring executives.

The internal separation necessitated a realignment of the group's governance structure and two strong operating boards
were established. To entrench the independence and focus of Imperial Logistics and Motus further, most of the functions
of the Imperial Holdings head office were systematically devolved to the two divisions. Pursuant to more efficient
capital and funding structures, significant effort ensured that each business unit achieved appropriately geared,
independent and self-sustaining balance sheets as evidenced by these results. 

In light of the above, the role of Imperial Holdings as the custodian of governance and the provider of capital to the
divisions is no longer necessary. Consequently, and after due consideration to whether the long-term prospects of
Imperial Logistics and Motus will be enhanced by them being separately listed, the board approved the external separation 
of the two divisions through the unbundling of Motus. The proposed unbundling, which is expected to be concluded in 
Q4 2018, will enable each of the two divisions to operate in a more focused and efficient manner, allowing each of the
businesses to achieve their respective strategic goals, be separately accountable to debt and equity providers and 
unlocking value for shareholders over the long term. The unbundling will also provide shareholders with the opportunity 
to participate directly in Imperial Logistics and/or Motus.

In the event of the unbundling of Motus, Imperial Logistics and Motus will not have formal credit ratings. No rating
is required as the funding for both Imperial Logistics and Motus can be satisfied by the banking market with no
requirement to access the bond market. The impact of this is immaterial from a cost of funding perspective. The debt 
syndication process and refinancing of existing facilities as a result of the proposed unbundling are in process and 
on track. Sufficient commitments including an underwriting for the off-shore facilities have been secured for 
Imperial Logistics and Motus to facilitate growth, provide flexibility and maintain strong liquidity at competitive 
pricing levels. 

The bonds were redeemed by utilising existing banking facilities at market value on 6 August 2018 and an offer to
acquire the preference shares was announced on 13 August 2018. We anticipate the buyback to be implemented during 
October 2018. Notwithstanding that preference shareholders are not entitled to participate in the unbundling, the 
board is of the opinion that the buyback will be an efficient means for Imperial to simplify its capital structure 
and preference shareholders to dispose of the preference shares in an orderly and effective manner.

Acquisitions 
In F2018 the group expanded its portfolio outside South Africa in both Imperial Logistics and Motus through the
following strategically aligned acquisitions:
- Imperial Logistics acquired 70% of Surgipharm Limited in Kenya for USD35 million (R485 million), effective 
  1 July 2017. Surgipharm is strategically aligned to accelerate our industry presence and relationships with pharmaceutical
  principals on the African continent and provides an excellent platform for further growth in other East African markets. 
  This acquisition performed slightly below expectation during the period due to political uncertainty and disruptive 
  elections in Kenya, but still contributed positively;
- Motus acquired Pentagon Motor Holdings, which operates 38 passenger and light commercial vehicle franchises from 21 prime 
  retail dealerships in the UK, for £26 million (R479 million), effective 1 September 2017. Pentagon supports Motus'
  strategy to deploy capital and its vehicle retail expertise in pursuit of growth beyond South Africa, and it complements
  our existing commercial vehicle business in the UK. This acquisition performed satisfactorily despite the UK passenger
  market being depressed by the convergence of declining UK passenger vehicle sales, market realignment from diesel
  vehicles and Vauxhall changing ownership from General Motors to the French PSA group;
- Motus acquired 75% of Australian-based SWT Group Proprietary Limited, which operates 16 dealerships, for AUD24,2 million 
  (R261 million), effective 1 October 2017. This acquisition performed in line with expectations during the period and
  complements our existing dealership footprint in Australia; and
- Motus acquired 60% of Arco Motor Industry Co Limited, a distributor of motor vehicle engine parts based in Taiwan for
  R185 million. The acquisition is in line with our strategy to shorten the supply chain in sourcing products for our
  route-to-market network in Africa, thereby eliminating costs and improving efficiency in the supply chain. 

Disposals
In F2018 the group disposed of the following non-core, strategically misaligned, underperforming or low return on
effort assets:
- The group's interest in and claims against Schirm GmbH, the contract manufacturing service business of Imperial
  Chemical Logistics GmbH, and related property transactions for a total cash price of €134 million (R2,0 billion). 
  The transaction was concluded on 17 January 2018 and payment was received on 30 January 2018;
- Non-strategic properties for proceeds of R1,7 billion. A further 17 properties with a carrying value of R234 million
  are held for sale; 
- Transport Holdings in Botswana, which released capital of R200 million;
- Laabs GmbH, a €16 million revenue liquid food transporter specialising in liquid chocolate products and raw materials
  in Europe, for €2 million (R32 million) in October 2017; and
- Interests in smaller entities in Imperial Logistics amounting to approximately R55 million.

Divisional performance
Imperial Logistics

Performance
Imperial Logistics recorded growth in revenue and operating profit of 3%. Excluding businesses held for sale (mainly
the disposal of Schirm) revenue and operating profit grew 8% and 5% respectively. These results were supported by a solid
performance from our West African healthcare businesses (mainly Eco Health) and CPG business in Mozambique (CIC); the
disposal and closures of some smaller, strategically misaligned businesses in South Africa and African Regions; the
inclusion of the Surgipharm acquisition for the full 12-month period and excellent results from the automotive and
international shipping segments in Logistics International. 

Results were partially offset by lower volumes, margin pressures, renewal of contracts at lower margins in South Africa, 
the loss of a large public healthcare contract in African Regions, lower operating profit performance from the sourcing 
and procurement business (Imres) in African Regions and disappointing performances in the European inland shipping, 
retail and industrial businesses. Excluding current and prior year acquisitions and disposals, revenue increased 
by 5% and operating profit declined by 1%. Profit before tax improved by 26% as foreign exchange losses mainly in 
African Regions were contained to R70 million compared to R216 million in the prior year. Net finance costs reduced 
8% due to a significantly improved and strengthened balance sheet, and amortisation of intangibles reduced by 17% 
mainly due to the sale of Schirm. 

The net debt to equity ratio improved significantly from 122% in the prior year to 50% following the sale of non-core
or underperforming businesses and non-strategic properties, reduced capital expenditure requirements and the
recapitalisation of African Regions. The ROIC of 12,2% compares to 11,5% in the prior year and is above the target 
hurdle rate of WACC+3%. 

Net capital expenditure increased to R578 million from R492 million in the prior year. Capital expenditure in the
current year comprised mainly replacement of transport fleet in South Africa, reduced by proceeds from asset disposals 
of R730 million, including property disposals of R367 million. Property disposals were lower when compared to the prior
period. 

Imperial logistics
                                               % change            % change                                  
                                         HY1     on HY1      HY2     on HY2                      % change    
                                        2018       2017     2018       2017     2018      2017    on 2017    
Revenue (Rm)                          26 511*         5   24 888          3   51 399   49 715*          3    
Operating profit (Rm)                  1 391          7    1 462          -    2 853     2 764          3    
Operating margin (%)                     5,2                 5,9                 5,6       5,6                   
Return on invested capital (%)                                                  12,2      11,5                   
Weighted average cost of capital (%)                                             8,5       7,1                   
Targeted ROIC (WACC+3%)                                                         11,5      10,1                   
Debt:equity ratio (%)                                                             50       122                   
Note: ROIC and WACC are calculated on a rolling 12 month basis. The above table includes businesses held for sale 
and eliminations.
* Restated.

Logistics South Africa
Logistics South Africa performed satisfactorily in difficult market conditions, decreasing revenue by 1% and 
increasing operating profit by 4%. Excluding businesses held for sale revenue increased by 1% and operating 
profit reduced by 1%.
                                               % change            % change                                   
                                         HY1     on HY1      HY2     on HY2                      % change     
                                        2018       2017     2018       2017     2018      2017    on 2017     
Revenue (Rm)                           8 510          2    7 800         (4)  16 310    16 498         (1)   
Operating profit (Rm)                    522         13      430         (6)     952       919          4    
Operating margin (%)                     6,1                 5,5                 5,8       5,6               
Return on invested capital (%)                                                  13,7      12,3                   
Weighted average cost of capital (%)                                            11,0      10,6                   
Targeted ROIC (WACC+3%)                                                         14,0      13,6                   
Debt:equity ratio (%)                                                             64        40                   
Note: ROIC and WACC are calculated on a rolling 12-month basis. The above table includes businesses held for sale 
and eliminations.                                                                                                

Performance was enhanced by a positive contribution from the Itumele Bus Lines acquisition which was included for 
12 months, and the disposal and closures of some smaller, strategically misaligned businesses in the current and 
prior years. However, the second-half performance was negatively impacted by a further reduction in volumes and 
depressed margins. Solid results from the transport and warehousing, and specialised freight businesses contributed 
positively to operating profit, which was offset by an underperformance from the CPG businesses, where the ambient 
and merchandising segments performed below expectation due to depressed volumes. Challenging market conditions and 
a competitive trading environment also resulted in contract renewals at lower margins. The managed solutions 
business recorded moderate growth during the year.

ROIC improved to 13,7% from 12,3% mainly due to improved capital management and the sale of strategically 
misaligned and underperforming businesses.

The disposal of 30% of Imperial Logistics South Africa to a broad-based black economic empowerment (B-BBEE) partner 
is progressing steadily with a selected partner. We expect to announce key terms of a transactionin H1 F2019. 
As previously announced, the B-BBEE transaction is not a prerequisite for the potential unbundling of Motus.

Logistics African Regions
Imperial Logistics African Regions performed below expectation with revenue and operating profit increasing by 9% and 
3% respectively with a mixed performance across the portfolio. Revenue and operating profit, excluding businesses 
held for sale, increased by 19% and 1% respectively.
                                               % change            % change                                  
                                         HY1     on HY1      HY2     on HY2                      % change    
                                        2018       2017     2018       2017     2018      2017    on 2017    
Revenue (Rm)                           5 551          4    5 272         15   10 823     9 947          9    
Operating profit (Rm)                    408          4      351          1      759       740          3    
Operating margin (%)                     7,4                 6,7                 7,0       7,4                   
Return on invested capital (%)                                                  17,5      23,8                   
Weighted average cost of capital (%)                                            11,1       6,7                   
Targeted ROIC (WACC+4%)                                                         15,0      10,7                   
Debt:equity ratio (%)                                                             23      >150                   
Note: ROIC and WACC are calculated on a rolling 12-month basis. The above table includes businesses held for sale 
and eliminations.

Results were supported by a good performance from our West African healthcare businesses (mainly Eco Health) 
which had record sales during the year. These businesses are leading distributors of pharmaceuticals in Nigeria 
and Ghana. The acquisition of Surgipharm contributed positively but performance was depressed by political 
uncertainty and disruptive elections in Kenya. The results from the CPG route-to-market business were enhanced 
by strong growth in the cross-border trade from South Africa into SADC markets and the disposal of the loss-making 
Botswana business (Global Holdings). Certain asset-heavy operations in the transport division were discontinued, 
in line with the risk mitigation strategy and the objective to become more asset-right, thereby enhancing returns.

The CPG route-to-market Namibian operations performed satisfactorily in ongoing recessionary conditions. Transport 
operations in Namibia are experiencing reduced volumes, exacerbated by the recession, vindicating our strategy to 
reduce asset intensity. Our sourcing and procurement business (Imres) delivered an unsatisfactory operating profit 
performance compared to the prior year due to increased competition, change in the product mix, uncertainty in aid 
and relief markets, and longer lead times in executing orders which resulted in lower margins. However, this business 
continues to generate good cash flow and delivers ROIC in line with the targeted hurdle rate. The sub-Saharan 
healthcare logistics business was negatively impacted by the loss of a large public healthcare contract.

The average strengthening of the Rand by 5% against the US Dollar also negatively influenced the Rand performance 
during the period.

The business was recapitalised during the year resulting in a significantly lower net debt to equity ratio.

ROIC at 17,5% declined from 23,8% mainly due to the underperformance of the sub-Saharan and Kenyan healthcare 
logistics businesses and the sourcing and procurement business, an increase in our investment in Eco Health, 
from 68% to 87% and normalised working capital.

Logistics International
Logistics International's revenue was flat and operating profit decreased by 1% in Euro, while revenue and 
operating profit increased by 4% and 3% respectively in Rand, which weakened by 4% on average against the Euro 
during the year. Revenue and operating profit, excluding businesses held for sale (Schirm), increased by 8% and 
12% respectively in Rand terms and increased by 4% and 6% respectively in Euro.
                                               % change            % change
                                         HY1     on HY1      HY2     on HY2                      % change     
                                        2018       2017     2018       2017     2018      2017    on 2017     
Revenue (€m)                             788*         3      793         (2)   1 581    1 574*          -    
Operating profit (€m)                   28,8         (2)    45,8          -     74,6      75,3         (1)   
Operating margin (%)                     3,7                 5,8                 4,7       4,8               
Revenue (Rm)                          12 450*         7   11 816          2   24 266   23 270*          4    
Operating profit (Rm)                    461          3      681          3    1 142     1 105          3    
Operating margin (%)                     3,7                 5,8                 4,7       4,7               
Return on invested capital (%)                                                   9,6       8,2               
Weighted average cost of capital (%)                                             6,3       5,4                   
Targeted ROIC (WACC+2%)                                                          8,3       7,4                   
Debt:equity ratio (%)                                                             56       128                   
Note: ROIC and WACC are calculated on a rolling 12-month basis. The above table includes businesses held for sale 
and eliminations.
* Restated.

The significant driver of growth was the automotive contract logistics business, which grew both new and existing 
business during the year. Results were also supported by a good performance from the international shipping 
operations. The European inland shipping business underperformed due to low water levels on the River Rhine. 
The retail, steel and industrial sub-divisions delivered unsatisfactory results resulting from lower volumes. 
Palletways performed below expectations due to toughening economic conditions, and continued competitive pressure 
in sub-scale operations.

ROIC improved to 9,6% from 8,2% and is above the targeted WACC+2%.


Divisional performance
Motus

Notwithstanding challenging economic and trading conditions, Motus increased revenue and operating profit by 17% and
9% respectively, with all four sub-divisions recording revenue and operating profit growth. This was mainly due to
competitive vehicle pricing and a strong improvement in entry-level and small SUV vehicle sales in South Africa as 
consumers are trading down. As a result, luxury brand sales declined by 20% during the year. The acquisitions of 
Pentagon in the UK and SWT in Australia contributed positively to revenue, but at lower margins. Excluding current 
and prior year acquisitions and disposals, revenue and operating profit increased by 4%. Profit before tax improved 
by 64% resulting from a significant reduction in foreign exchange losses being R43 million compared to R425 million 
incurred in 2017 mainly relating to the unwinding of excessive and uneconomical forward cover in Renault. The profit 
on sale of R617 million relating to a property in Australia and the 13% reduction in finance costs also boosted 
performance. 

During the period, in South Africa, Motus grew unit vehicle sales by 7% compared to national unit vehicle sales growth
of 2% as reported by NAAMSA. The Motus passenger and commercial vehicle businesses, including the UK and Australia,
retailed 146 455 (2017: 113 074) new and 81 123 (2017: 70 158) pre-owned vehicles during the 12 months. 

Property disposals and consistent levels of investment in vehicles for hire resulted in net capital expenditure
declining by 85% from R2,2 billion in June 2017 to R322 million.

While we have provided separate ROIC, WACC and net debt to equity ratios for each sub-division, these ratios should
not be analysed in isolation as the sub-divisions of Motus operate in a uniquely integrated manner, to optimise client
offerings and market penetration with numerous cross-selling initiatives across the Vehicle value chain. 

Motus' debt to equity ratio increased marginally to 50% mainly due to acquisitions, partly enhanced by disciplined
working capital management and proceeds received from the disposal of non-strategic properties.

MOTUS
                                               % change            % change                                     
                                         HY1     on HY1      HY2     on HY2                      % change       
                                        2018       2017     2018       2017     2018      2017    on 2017   
Revenue (Rm)                          39 678         16   37 981         17   77 659    66 540         17    
Operating profit (Rm)                  1 716          5    1 877         13    3 593     3 310          9    
Operating margin (%)                     4,3                 4,9                 4,6       5,0               
Return on invested capital (%)                                                  13,0      11,8               
Weighted average cost of capital (%)                                            10,4      10,1               
Targeted ROIC (WACC+3%)                                                         13,4      13,1               
Debt:equity ratio (%)                                                             50        46               
Note: ROIC and WACC are calculated on a rolling 12-month basis.

Vehicle Import and Distribution
Exclusive South African importer of Hyundai, Kia, Renault and Mitsubishi automotive brands with over 
80 000 vehicles  imported annually; and Nissan distributorships in four African countries.
                                               % change            % change                                   
                                         HY1     on HY1      HY2     on HY2                      % change     
                                        2018       2017     2018       2017     2018      2017    on 2017     
Revenue (Rm)                          10 043         10   10 085         12   20 128    18 157         11    
Operating profit (Rm)                    303          6      485          2      788       728          8    
Operating margin (%)                     3,0                 4,8                 3,9       4,0                   
Return on invested capital (%)                                                  12,7       6,4                   
Weighted average cost of capital (%)                                            11,3      10,1                   
Debt:equity ratio (%)                                                             37       109                   
Note: ROIC and WACC are calculated on a rolling 12-month basis.

Revenue and operating profit from this sub-division increased by 11% and 8% respectively, as sales volumes 
increased by 11% (Hyundai up 4%, Kia up 22% and Renault up 22% per NAAMSA) with our vehicle mix aligned to market 
demand resulting from pressure on consumer affordability. The Motus importer segment market share increased from 
14% in the prior year to 15%.

At the end of July 2018, Hyundai and Kia forward cover on the US Dollar and Euro imports extends to February 2019 
at average rates of R12,89 to the US Dollar and R15,61 to the Euro. New trading arrangements with Renault since 
October 2017 have rendered forward cover redundant. With the exception of Renault, Motus' current guideline is 
to cover a minimum of seven months forward and up to 75% of annual forecast orders, as stipulated by the South 
African Reserve Bank.

The African distributorship business improved its performance from the prior period but is still performing 
below expectations due to weak consumer demand mainly in the aftermath of political elections in Kenya. The 
capital deployed in these operations has been reduced and the viability of these operations is under review.

During the period, ROIC increased to 12,7% from 6,4%, resulting from increased profitability, a significant 
reduction in working capital, lower investment in vehicles for hire and the sale of non-strategic properties.

Vehicle Retail and Rental
South Africa: Represents 23 OEMs through 356 vehicle dealerships including 104 pre-owned, 232 passenger 
dealerships and 20 commercial vehicle dealerships, with 118 car rental outlets (Europcar and Tempest).

Internationally: Manages and operates 112 franchise outlets from 68 sites comprising 84 commercial vehicles and 
28 passenger car franchise outlets in the UK, 30 passenger vehicle dealerships in Australia and 16 car rental 
outlets (Europcar and Tempest) in southern Africa.
                                               % change            % change                                  
                                         HY1     on HY1      HY2     on HY2                      % change    
                                        2018       2017     2018       2017     2018      2017    on 2017    
Revenue (Rm)                          32 359         20   30 400         16   62 759    53 362         18    
Operating profit (Rm)                    814          4      873         26    1 687     1 478         14    
Operating margin (%)                     2,5                 2,9                 2,7       2,8                   
Return on invested capital (%)                                                   9,4      10,7                   
Weighted average cost of capital (%)                                             9,9      10,0                   
Debt:equity ratio (%)                                                             62        46                   
Note: ROIC and WACC are calculated on a rolling 12-month basis.

The Vehicle Retail and Rental operations recorded a strong performance, increasing revenue and operating profit 
by 18% and 14% respectively, supported by an increase in overall vehicle sales volumes, despite subdued trading 
conditions in South Africa and challenging trading conditions in the UK. New and pre-owned retail sales volumes 
increased by 33% and 15% respectively, assisted by the inclusion of the UK (Pentagon) and Australian (SWT) 
acquisitions which enhanced revenue but reduced margins. In South Africa, margins were enhanced by a realignment 
of the importer dealership operating model to unlock value.

The Motus passenger and light commercial vehicle businesses in South Africa experienced a 2% increase in new 
vehicle sales units from 51 374 in 2017 to 52 180. Dealerships of the importer brands performed well due to an 
increase in sales volumes in Hyundai, Kia and Renault. Higher sales of entry-level hatch vehicles and small 
SUVs were recorded compared to lower sales volumes in the luxury brands segment. Reassessment of the dealership 
footprint resulted in closure of nine underperforming dealerships during the year. Total pre-owned retail unit 
sales declined marginally as consumer preference shifted to new entry-level vehicles instead. The commercial 
vehicle business in South Africa recorded a 3% increase in new retail unit sales, increasing revenue and 
operating profit. The parts and aftersales segments continue to perform well. As evidenced in the improved 
operating margin in SA, the benefits of rationalisation of the dealer network, elimination of cost and 
complexity post the consolidation of the motor businesses under one management are starting to show benefits.

Revenue and operating profit of the UK operations increased by 70% and 25% respectively, supported by the 
Pentagon acquisition, which improved its performance in the second half. Despite this, the newly acquired 
passenger segment of our business performed below expectation and remains under pressure due to Brexit-related 
consumer concerns, a reduction in sales of diesel vehicles and Vauxhall changing ownership from General Motors 
to the French PSA group. The latter resulted in substantially reduced OEM assistance, which improved in the 
second half as PSA implemented its new trading policies. The UK commercial operations performed to expectation 
and grew revenue and operating profit by 5% and 1% respectively.

The Australian vehicle market recorded growth in the reporting period but margins on new vehicles remain under 
pressure. The Australian operations increased revenue by 26% but operating profit decreased as margins in the 
Ford franchise normalised from a high base in the prior year. This was partially offset by the inclusion of 
the SWT acquisition which is performing in line with expectations.

Car rental increased its revenue and operating profit by 11% and 15% respectively due to increased vehicle 
rental volumes from the inbound and leisure segments, and higher post-rental vehicle sales through Auto 
Pedigree. The vehicle rental utilisation was maintained at 71%, while accident costs were lower than the 
prior year.                                                                                                 

ROIC reduced to 9,4% from 10,7% due to increased working capital and the acquisitions of Pentagon and SWT 
auto dealer groups.

Aftermarket Parts
Distributor, wholesaler and retailer of accessories and parts for older vehicles, through 35 owned branches, 
43 owned retail stores and a network of 720 franchised outlets (Midas (AAAS), Alert Engine Parts and 
Turbo Exchange).                                                                                                
                                               % change            % change                                  
                                         HY1     on HY1      HY2     on HY2                      % change    
                                        2018       2017     2018       2017     2018      2017    on 2017    
Revenue (Rm)                           3 354          7    3 278          8    6 632     6 153          8    
Operating profit (Rm)                    205          8      242         12      447       406         10    
Operating margin (%)                     6,1                 7,4                 6,7       6,6               
Return on invested capital (%)                                                  18,3      20,7                   
Weighted average cost of capital (%)                                            11,2      10,8                   
Debt:equity ratio (%)                                                             91        53                   
Note: ROIC and WACC are calculated on a rolling 12-month basis.

Revenue and operating profit grew by 8% and 10% respectively, supported by tighter cost control and good 
performances from Alert Engine Parts and Beekmans. However, performance was negatively impacted by market 
contraction, increased pricing pressure and consumers trading down. The acquisition of 60% of Arco 
contributed positively to the performance in the second half.

ROIC decreased to 18,3% from 20,7% due to increased working capital and an investment in a warehouse 
facility which was included in invested capital.

Motor Related Financial Services
Manages and administers service, maintenance and warranty plans. Develops and sells value-added products
and services (VAPS) with over 730 000 clients through owned and independent dealers, call centres and 
online. Provides fleet management services, differentiation and innovation and a valuable touch point 
with our customers across our dealer network.
                                               % change            % change                                  
                                         HY1     on HY1      HY2     on HY2                      % change    
                                        2018       2017     2018       2017     2018      2017    on 2017    
Revenue (Rm)                           1 083         12    1 083          1    2 166     2 036          6    
Operating profit (Rm)                    465          2      424         13      889       833          7    
Operating margin* (%)                   42,9                39,2                41,0      40,9                   
Return on invested capital (%)                                                  69,5      65,7                   
Weighted average cost of capital (%)                                            13,6      13,8                   
Debt:equity ratio (%)                                                        (136)**      (116)                  
Note: ROIC and WACC are calculated on a rolling 12-month basis. Includes the VAPS business for all 
reporting periods.
*  The operating margin reflects various business ventures that yield operating profits without any associated 
   revenues.
** Includes net cash of R1 426 million.

Motor Related Financial Services grew revenue and operating profit by 6% and 7% respectively, supported by 
higher profitability in demo vehicle sales and maintenance funds, and positive growth in the newly branded 
M-Sure VAPS operations. Increased sales of monthly versus longer-term service and maintenance plans impacted 
the growth of maintenance and warranty contracts on the balance sheet. Arising from the Regent transaction, 
the prior year includes once-off income of R46 million included in the VAPS business, which is not included 
in the current year.

We continue to focus on growing the fleet management business, building synergies within the retail motor 
sub-divisions and improving the sales penetration of our products into other channels.

ROIC increased from 65,7% to 69,5% due to higher profitability during the rolling 12-month period.                                                                                                

Group financial performance

Group profit and loss (extracts)
                                  Total   Continuing   Discontinued     Total   Continuing   Discontinued      Total   Continuing     
                                   2018         2018           2018      2017         2017           2017   % change     % change    
Revenue (Rm)                    128 683       51 303         77 380   115 889*      49 635*         66 254         11            3    
Operating profit (Rm)             6 406        2 813          3 593     6 049        2 739          3 310          6            3    
Operating margin (%)                5,0                                   5,2                                                        
Net finance costs (Rm)           (1 386)        (649)          (737)   (1 680)        (831)          (849)       (18)         (22)   
Income from associates (Rm)          90           56             34       103           61             42        (13)          (8)   
Forex losses (Rm)                   (93)         (50)           (43)     (619)        (194)          (425)       (85)         (74)   
Profit on sale of property          639           22            617       212          181             31        201          (88)   
Amortisation of intangibles        (432)        (417)           (15)     (521)        (505)           (16)       (17)         (17)   
Other non-operating items          (358)        (113)          (245)     (357)        (257)          (100)                    (56)   
Profit before tax (Rm)            4 866        1 662          3 204     3 187        1 194          1 993         53           39    
Tax (Rm)                         (1 458)        (566)          (892)     (901)        (228)          (673)        62          148    
Net profit after tax (Rm)         3 408        1 096          2 312     2 286          966          1 320         49           13    
Net profit for the year 
- Regent                                                                  279                         279                            
Attributable to 
non-controlling interests (Rm)     (135)        (168)            33        36         (164)           200      (>100)           2    
Attributable to shareholders 
of Imperial (Rm)                  3 273          928          2 345     2 601          802          1 799         26           16    
Effective tax rate (%)             30,5                                  29,2                                                        
Return on invested 
capital** (%)                      12,9         12,2           13,0      11,3         11,5           11,8                            
Weighted average 
cost of capital** (%)               9,7          8,5           10,4       9,0          7,1           10,1
* Restated
**WACC for each sub-division of the group is calculated by making appropriate country/regional risk adjustments for the 
  cost of equity and pricing for the cost of debt depending on jurisdiction. The group WACC calculation is a weighted 
  average of the respective sub-divisional WACCs. See glossary of terms. ROIC is calculated based on taxed operating 
  profit plus income from associates divided by the 12-month average invested capital (total equity and net 
  interest-bearing borrowings).

Excluding acquisitions and disposals in both the current and prior period, revenue and operating profit for the group 
increased by 5% and 2% respectively.

Total profit before tax increased by 53% or R1 679 million and was impacted by the following:
- The increase in group operating profit of R357 million;
- Net finance costs decreased by R294 million due to lower average debt levels;
- Foreign exchange losses decreased by R526 million to R93 million. Foreign exchange losses in Imperial Logistics 
  (mainly in African Regions due to the strong Rand) were contained to R50 million against R194 million in the prior 
  period. In Motus, losses of R43 million compared to a loss of R425 million, due to the unwinding of uneconomical 
  and excessive cover in the prior year;
- Profit on sale of properties amounted to R639 million resulting in an increase of R427 million from the prior year. 
  The sale of the property in Australia, which was the largest property sale during the year, contributed R616 million;
- Amortisation of intangibles arising from business combinations decreased by R89 million due to certain intangible 
  assets being fully amortised in F2017, and the sale of Schirm; and
- Other non-operating items were in line with the prior period at R358 million and mainly comprise the following:
  - A positive remeasurement of contingent liabilities of R31 million;
  - A positive remeasurement on the put option liability resulting in a gain of R42 million;
  - Business acquisition costs of R18 million;
  - Loss on sale of subsidiaries, mainly Schirm, of R149 million;
  - Impairment on the sale of Jurgens of R173 million; and
  - Goodwill impairments of R75 million.

In total, R173 million relating to the sale of Jurgens is a once-off item that negatively impacted HEPS performance 
in F2018. Excluding the impact of Jurgens, HEPS excluding Regent is up 33%.

The effective tax rate for the group at 30,5% is higher than 29,2% in 2017, mainly due to non-deductibility of 
losses on the sale of businesses in the current period.

Non-controlling interest increased compared to the comparative year due to improved results from Renault and 
Eco Health. Recent acquisitions of Surgipharm, Itumele Bus Lines and SWT also contributed to the increase. 
The prior year includes losses relating to the minorities arising in Renault and TATA.

Reconciliation from earnings to headline earnings          
                                                                              June             June            % 
R million                                                                     2018             2017       change    
Net profit attributable to Imperial shareholders (earnings)                  3 273            2 601           26    
Profit on disposal of assets/investments                                      (804)            (320)                
Impairments of goodwill and other assets                                       226              219                 
Loss on sale of subsidiaries and businesses                                    147              151                 
Tax effects of headline earnings adjustments                                   221               66                 
Other                                                                           (6)             (17)                
Headline earnings                                                            3 057            2 700           13    
The table reflects the total group operations including Motus, and Regent in F2017.

Earnings and headline earnings per share
                                                                              June             June            %     
R million                                                                     2018             2017       change    
Total EPS                                                                    1 681            1 339           26    
Continuing EPS (Logistics)                                                     477              412           16    
Motus EPS                                                                    1 204              809           49    
EPS excluding Regent                                                         1 681            1 221           38    
Regent EPS                                                                                      118                 
Total HEPS                                                                   1 570            1 390           13    
Continuing HEPS (Logistics)                                                    543              379           43    
Motus basic HEPS                                                             1 027              861           19    
HEPS excluding Regent                                                        1 570            1 240           27    
Regent HEPS                                                                                     150                 
The table reflects the total group operations.                                                                      
                                                                                                                    
Financial position (extracts)                                                                                                  
                                                                              June             June            %     
R million                                                                     2018             2017       change    
Goodwill and intangible assets                                               9 805            9 529            3    
Property, plant and equipment                                                9 829           10 371           (5)   
Investment in associates and joint ventures                                  1 100            1 002           10    
Transport fleet                                                              5 358            5 560           (4)   
Vehicles for hire                                                            3 924            3 963           (1)   
Investments and other financial assets                                         859              805            7    
Net working capital                                                          8 761            8 956           (2)   
Deferred tax asset                                                             405              394            3    
Current tax liability                                                         (219)              (7)                
Properties held for sale                                                       234              979                 
Net debt                                                                   (11 125)         (14 647)         (24)   
Non-redeemable, non-participating preference shares                           (441)            (441)                
Other liabilities                                                           (5 365)          (6 203)         (16)   
Total shareholders' equity                                                  23 125           20 261                 
Total assets                                                                70 503           68 853                 
Total liabilities                                                          (47 378)         (48 592)                
Above table includes Motus and Logistics for F2017 and F2018.                                                       

The most significant factors impacting the financial position at 30 June 2018 were:
- The Rand weakening by 5% to the US Dollar and 7% to the Euro. This resulted in the overall balance sheet 
  increasing with a net R538 million increase in the foreign currency translation reserve attributable to 
  shareholders;                                                
- The disposals of Schirm and Transport Holdings resulted in operating assets of R2 598 million and operating 
  liabilities of R627 million being disposed of;
- Assets held for sale decreased by R745 million due to the disposal of properties; and
- The acquisitions of Surgipharm (R485 million), Pentagon (R479 million), SWT (R261 million) and Arco (R185 million) 
  during the year, and purchasing a further 19% in Eco Health (R581 million). The acquisitions added a further 
  R157 million of on balance sheet net debt at acquisition.                                                 

Goodwill and intangible assets increased by 3% to R9,8 billion mainly due to the following:
- Acquisitions of R1,1 billion, mainly Pentagon (R189 million), SWT (R213 million) and Surgipharm (R341 million) 
  to goodwill and in total, R243 million to intangible assets;
- The weakening of the Rand resulted in a R480 million increase;
- Disposals resulted in a R754 million decrease to goodwill and intangible assets; and
- Amortisation decreased intangible assets by R560 million.

Property, plant and equipment (PPE) decreased by 5% to R9,8 billion mainly affected by the following:
- PPE related to the disposal of Schirm GmbH and Transport Holdings Botswana, both amounting to R1,0 billion;
- R413 million increase due to the purchase of Surgipharm, Pentagon and SWT; 
- Currency adjustments resulted in an increase of R172 million; and
- Impairments of R115 million.

Transport fleet decreased by 4% or R202 million mainly due to the net disposal of assets through the disposal of 
Schirm and Transport Holdings Botswana amounting to R144 million, in addition, the value of disposals and 
depreciation are higher than the capital expenditure.                                                

Vehicles for hire were in line with the prior year as less was invested in vehicles for hire by the Vehicle, Import 
and Distribution sub-division.                                                

Net working capital of R8,8 billion improved by 2% from R9,0 billion in June 2017. Logistics working capital 
increased by R1,5 billion as debtor and creditor levels normalised to more sustainable levels when compared to F2017. 
The acquisitions, mainly Surgipharm, also impacted working capital in F2018. Motus' working capital decreased by 
R1,7 billion mainly due to a reduction in inventory and improved supplier credit terms. We expect inventory levels 
to normalise in H1 F2019.

Movement in equity for the 12 months to June 2018
R million                                                                                                   2018    
Net profit attributable to Imperial shareholders                                                           3 273    
Net profit attributable to non-controlling interests                                                         135    
Increase in the foreign currency translation reserve                                                         538    
Increase in the hedge accounting reserve                                                                     184    
Remeasurement of defined benefit obligations net of tax                                                      (67)   
Movement in share-based reserve net of transfers to retained earnings                                         17    
Dividends paid                                                                                            (1 285)   
Non-controlling interests (buy out)                                                                         (102)   
Non-controlling interest acquired, net of disposals and shares issued                                        350    
Non-controlling share of dividends                                                                          (193)   
Shares repurchased net of shares used to settle share-based equity schemes                                    14    
Total change                                                                                               2 864    


Cash flow
                                                                              June             June            %     
R million                                                                     2018             2017       change    
Cash generated by operations before movements in                     
working capital                                                              8 721            8 388            4    
Movements in net working capital (excludes currency                  
movements and net acquisitions)                                                811              688                 
Cash generated after working capital movements                               9 532            9 076                 
Interest paid                                                               (1 386)          (1 670)                
Tax paid                                                                    (1 336)          (1 520)                
Cash generated by operations before capital                          
expenditure on rental assets                                                 6 810            5 886           16    
Capital expenditure on rental assets                                        (1 079)          (1 709)                
Cash flows from operating activities                                         5 731            4 177           37                
Net disposal (acquisitions) of subsidiaries and businesses                     859          (1 687)                 
Capital expenditure (non-rental assets)                                        240             (954)                               
Net movement in associates, investment, loans and non-current                    
financial instruments                                                         (209)             326                 
Cash flows from investing activities                                           890           (1 939)                
Dividends paid                                                              (1 478)          (1 688)                
Hedging of share scheme                                                       (362)             (10)                
Change in non-controlling interest                                            (684)            (252)                
Capital raised from non-controlling interest                                   223              149                 
Repurchase of ordinary shares                                                 (113)                                 
Net movement in cross-currency swaps                                          (152)                                 
Cash flows from financing activities                                        (2 566)          (1 801)                
Decrease in net debt (excludes currency movements                    
and net acquisitions)                                                        4 055              437                 
Free cash flow                                                               5 016            4 296           17    
Free cash flow to headline earnings (times)                                    1,6              1,6                 
                                                                                                                       
Cash generated by operations after working capital movements, interest and tax payments was R6,8 billion 
(2017: R5,9 billion), up 16%.

Net working capital movements resulted in an inflow of R811 million, mainly due to a reduction in inventory and
improved supplier credit terms in Motus. We expect inventory levels to normalise in H1 F2019.

Net capital expenditure reduced significantly to R839 million from R2,7 billion in 2017 mainly due to the benefit of
property disposals of R1,7 billion. In addition, there was a reduction in capital expenditure in vehicles for hire in
Motus. Capital expenditure in the prior year included the bulk of the contributions towards the chemical manufacturing
plant and the additional convoys in South America. 

The main contributors to the net inflow of R859 million relating to acquisitions and disposals was proceeds received
on the disposal of Schirm (R2,0 billion), which was partially offset by the acquisitions of Pentagon (R479 million),
Surgipharm (R382 million), SWT (R238 million) and Arco (R65 million) during the year.

Dividends amounting to R1,5 billion were paid during the year. 

Other significant cash flow items included share buybacks amounting to R113 million, buyout of minorities of 
R684 million (mainly Eco Health) and settlement of cross-currency swaps of R152 million. Capital raised from 
non-controlling interests of R223 million relates to Renault. The costs associated with the hedging of share 
schemes also increased to R362 million.

Liquidity
The group's liquidity position is strong with R13,9 billion of unutilised banking facilities, excluding asset-backed
finance facilities. 80% of the group debt is long term in nature and 52% of the debt is at fixed rates. The group's
blended cost of debt is c.4,8% after tax.

In March 2018, Imperial's Baa3 global scale ratings outlook was changed to stable by Moody's after being placed under
review for downgrade on 29 November 2017 in line with the sovereign rating. The group's international and national 
scale credit ratings by Moody's are Baa3 and Aa1.za. 

Dividend
A final cash dividend of 387 cents per ordinary share (2017: 330 cents per share) has been declared, bringing the
F2018 dividend to 710 cents per ordinary share (F2017: 650 cents per share). The dividend is in line with our targeted
payout ratio of 45% of HEPS, subject to prevailing circumstances. 

Board changes
Messrs Raboijane (Moses) Kgosana and Younaid Waja resigned as independent non-executive directors of the Imperial
board and from the various sub-committees and subsidiaries on which they served on 8 September 2017 and 13 October 2017
respectively. The board thanks Messrs Kgosana and Waja for their contribution to the group and wishes them well. 

Former group Chief Executive Officer (CEO) Mr Mark Lamberti resigned with effect from 30 April 2018. Mr Lamberti has 
served Imperial with distinction since March 2014, leading a multifaceted portfolio, organisation and management 
restructuring, a key objective of which was to accelerate executive development and transformation to align 
Imperial’s employee and leadership profile with the economically active demographics of South Africa. The board 
thanks Mr Lamberti for his excellent leadership and commitment to the group, and wishes him well.

Mr Osman Arbee was appointed group CEO with effect from 1 May 2018, in addition to his position as CEO of Motus.

As previously announced, Mr Arbee is currently on medical leave and is expected to return to work in January 2019 
to continue in his role as CEO of Motus. During his recovery period, he will be available to management to advise 
on strategic matters. In the interim, the proposed unbundling of Motus remains on track and the management structures 
of both Imperial Holdings and Motus, and the current Motus finance structure, are sufficient to provide appropriate 
support during Mr Arbee's absence. Mr Ockert Janse van Rensburg was appointed acting CEO of Motus in addition to his 
role as the Chief Financial Officer (CFO) of Motus.

Consequently, Mr Mohammed Akoojee was appointed acting CEO of Imperial Holdings, in addition to his role as the CFO,
until the conclusion of the proposed unbundling. 

Mr Marius Swanepoel will continue to serve as the CEO of Imperial Logistics and will undertake the role of the CEO of
Imperial which will be renamed Imperial Logistics on conclusion of the proposed unbundling. Mr Swanepoel will retire as
CEO in June 2019 and will remain as director to 31 December 2019. Mr Akoojee will succeed Mr Swanepoel as CEO with
effect from 1 July 2019. 

Prospects
Over the past 12 months, the group has produced solid financial results in testing trading conditions, while
approaching the final stages of one of the most comprehensive organisation renewals by a South African-based multinational.

We anticipate that both Imperial Logistics and Motus will deliver solid operating and financial results in the
financial year to June 2019, subject to stable currencies in the economies in which each operates. 

For the financial year to June 2019, we expect:
- Imperial Logistics and Motus will have appropriate capital structures, with minimal impact on funding and costs, to
  enable each to fund its own growth and strategic aspirations while continuing to pay a stable dividend (approximately 
  45% of HEPS);
- Imperial Logistics and Motus to record growth in revenues and operating profit; and
- Growth in headline earnings per share for Imperial Logistics and Motus, subject to any once-off costs relating to the
  proposed unbundling.

Appreciation
As we are approaching the possible end of an era and potentially the last financial reporting year for Imperial
Holdings in its current structure, we extend gratitude to 48 339 colleagues throughout Imperial whose resilience in dealing
with difficult external circumstances has been tested by the unprecedented rate of internal change. The multifaceted
restructuring of Imperial over the past four years was among the most complex and ambitious in South African business.

A particular thanks is extended to our previous leaders, management, colleagues and co-directors for their invaluable
guidance and counsel during the 70-year history of one of South Africa's most extraordinary companies. 

Finally, we thank our owners and funders for their continued support through the years. 

Mohammed Akoojee
Acting Chief Executive Officer and Chief Financial Officer

20 August 2018

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 2018

Preference shareholders
Notice is hereby given that a gross final preference dividend of 416,62500 cents per preference share has been
declared by the board of Imperial, payable to the holders of the 4 540 041 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 20%. The net preference dividend, to those
shareholders who are not exempt from paying dividend tax, is therefore 333,30000 cents per share.

Ordinary shareholders
Notice is hereby given that a gross final ordinary dividend in the amount of 387,00000 cents per ordinary share has
been declared by the board of Imperial, payable to the holders of the 201 971450 ordinary shares. The dividend will 
be paid out of reserves.

The ordinary dividend will be subject to a local dividend tax rate of 20%. The net ordinary dividend, to those
shareholders who are not exempt from paying dividend tax, is therefore 309,60000 cents per share.

The company has determined the following salient dates for the payment of the preference dividend and ordinary
dividend:
                                                                                                            2018    
Last day for preference shares and ordinary shares respectively to trade 
cum preference dividend and cum ordinary dividend                                          Tuesday, 25 September    
Preference and ordinary shares commence trading ex preference dividend 
and ex ordinary dividend respectively                                                    Wednesday, 26 September    
Record date                                                                                 Friday, 28 September    
Payment date                                                                                   Monday, 1 October    


The company's income tax number is 9825178719.            
            
Share certificates may not be dematerialised or rematerialised between Wednesday, 26 September 2018 and 
Friday, 28 September 2018, both days inclusive.

On Monday, 1 October 2018, 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 1 October 2018 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, 1 October 2018.

On behalf of the board

RA Venter
Group Company Secretary

20 August 2018


Auditor's report
These summarised consolidated financial statements for the year ended 30 June 2018 have been audited by 
Deloitte & Touche, who expressed an unmodified opinion thereon. The auditor also expressed an unmodified 
opinion on the consolidated 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
for the year ended 30 June 2018

The results of the Motus businesses are presented in the summarised consolidated statement of profit or loss 
as discontinued operations. The following shows the combined results of the continuing and the discontinued 
operations after eliminating inter-group transactions. Regent's results for 2017 have been included as a 
single line item under discontinued operations.

                                      % change                  Total       Continuing   Discontinued        Total    Continuing    Discontinued     
                                         Con-        Dis-  operations       operations     operations   operations    operations      operations    
R million                     Total   tinuing   continued        2018             2018           2018        2017*          2017            2017    
Revenue                          11         3          17     128 683           51 303         77 380      115 889        49 635          66 254    
Net operating expenses                                       (119 842)         (47 408)       (72 434)    (107 311)      (45 772)        (61 539)   
Profit from operations                        
before depreciation                           
and recoupments                                                 8 841            3 895          4 946        8 578         3 863           4 715    
Depreciation, amortisation,                                                                                                       
impairments and recoupments                                    (2 435)          (1 082)        (1 353)      (2 529)       (1 124)         (1 405)   
Operating profit                  6         3           9       6 406            2 813          3 593        6 049         2 739           3 310    
Recoupments from sale                         
of properties,                                                                                              
net of impairments                                                639               22            617          212           181              31    
Amortisation of                               
intangible assets                                                                                                 
arising on business                           
combinations                                                     (432)            (417)           (15)        (521)         (505)            (16)   
Foreign exchange losses                                           (93)             (50)           (43)        (619)         (194)           (425)   
Other non-operating items                                        (358)            (113)          (245)        (357)         (257)           (100)   
Profit before net                             
finance costs                                                   6 162            2 255          3 907        4 764         1 964           2 800    
Net finance cost                (18)      (22)        (13)     (1 386)            (649)          (737)      (1 680)         (831)           (849)   
Profit before share                           
of results of                                                                                                    
associates and                                
joint ventures                                                  4 776            1 606          3 170        3 084         1 133           1 951    
Share of results                              
of associates                                                                                                    
and joint ventures                                                 90               56             34          103            61              42    
Profit before tax                                               4 866            1 662          3 204        3 187         1 194           1 993    
Income tax expense                                             (1 458)            (566)          (892)        (901)         (228)           (673)   
Net profit for the year          49        13          75       3 408            1 096          2 312        2 286           966           1 320    
Net profit for the year                       
- Regent                                                                                                       279                           279    
                                 33        13          45       3 408            1 096          2 312        2 565           966           1 599    
Net profit attributable to:                                                                                                                         
Owners of Imperial                                              3 273              928          2 345        2 601           802           1 799    
Non-controlling interests                                         135              168            (33)         (36)          164            (200)   
                                                                3 408            1 096          2 312        2 565           966           1 599    
Earnings per share (cents)                                                                                                                          
Basic                            26        16          30       1 681              477          1 204        1 339           412             927    
- Excluding Regent               38        16          49       1 681              477          1 204        1 221           412             809    
- Regent                                                                                                       118                           118    
Diluted                          25        15          30       1 634              463          1 171        1 302           401             901    
- Excluding Regent               38        15          49       1 634              463          1 171        1 187           401             786    
- Regent                                                                                                       115                           115    
Headline earnings                             
per share (cents)                                                                                                                 
Basic                            13        43           2       1 570              543          1 027        1 390           379           1 011    
- Excluding Regent               27        43          19       1 570              543          1 027        1 240           379             861    
- Regent                                                                                                       150                           150    
Diluted                          13        43           2       1 526              527            999        1 351           368             983    
- Excluding Regent               27        43          19       1 526              527            999        1 205           368             837    
- Regent                                                                                                       146                           146    
* Restated revenue and net operating expense, refer to note 3.1.

The cash flows of the Motus businesses were as follows:
                                                                                           2018               2017    
Cash flows from operating activities                                                      4 312              1 272    
Cash flows from investing activities                                                        (61)              (591)   
Cash flows from financing activities                                                     (3 623)              (273)   
                                                                                       

Summarised consolidated statement of profit or loss
for the year ended 30 June 2018

R million                                                       Notes      % change          2018         2017*    
Continuing operations                                                                                              
Revenue                                                                           3        51 303        49 635    
Net operating expenses                                                                    (47 408)      (45 772)   
Profit from operations before depreciation and recoupments                                  3 895         3 863    
Depreciation, amortisation, impairments and recoupments                                    (1 082)       (1 124)   
Operating profit                                                                  3         2 813         2 739    
Recoupments from sale of properties, net of impairments                                        22           181    
Amortisation of intangible assets arising on business           
combinations                                                                                 (417)         (505)   
Foreign exchange losses                                                                       (50)         (194)   
Other non-operating items                                           7                        (113)         (257)   
Profit before net finance costs                                                             2 255         1 964    
Net finance cost                                                    8           (22)         (649)         (831)   
Profit before share of results of associates and joint ventures                             1 606         1 133    
Share of results of associates and joint ventures                                              56            61    
Profit before tax                                                                           1 662         1 194    
Income tax expense                                                                           (566)         (228)   
Profit for the year from continuing operations                                   13         1 096           966    
Discontinued operations                                                                     2 312         1 599    
Profit for the year from Motus (held for distribution           
to owners of Imperial)                                                           75         2 312         1 320    
Profit for the year from Regent                                                                             279    
Net profit for the year                                                                     3 408         2 565    
Net profit attributable to:                                                                                        
Owners of Imperial                                                                          3 273         2 601    
- Continuing operations                                                                       928           802    
- Discontinued operations                                                                   2 345         1 799    
Motus                                                                                       2 345         1 571    
Regent                                                                                                      228    
Non-controlling interest                                                                      135           (36)   
- Continuing operations                                                                       168           164    
- Discontinued operations                                                                     (33)         (200)   
Motus                                                                                         (33)         (251)   
Regent                                                                                                       51    
Earnings per share (cents)                                                                                         
Continuing operations                                                                                              
- Basic                                                                          16           477           412    
- Diluted                                                                        15           463           401    
Discontinued operations                                                                                            
- Basic                                                                                     1 204           927    
Motus                                                                            49         1 204           809    
Regent                                                                                                      118    
- Diluted                                                                                   1 171           901    
Motus                                                                            49         1 171           786    
Regent                                                                                                      115    
Total operations                                                                                                   
- Basic                                                                          26         1 681         1 339    
- Diluted                                                                        25         1 634         1 302    
* Represented for discontinued operation. Restated revenue and net operating expense, refer to note 3.1.                                                         

 
Summarised consolidated statement of comprehensive income
for the year ended 30 June 2018

R million                                                                                    2018          2017    
Net profit for the year                                                                     3 408         2 565    
Other comprehensive income (loss)                                                             655          (405)   
Items that may be reclassified subsequently to profit or loss                                 722          (521)   
Exchange gains (losses) arising on translation of foreign operations                          538          (724)   
Reclassification of gain on disposal of investment in associate                                              (8)   
Movement in hedge accounting reserve                                                          301           244    
Income tax relating to items that may be classified to profit or loss                        (117)          (33)   
Items that may not be reclassified subsequently to profit or loss                             (67)          116    
Remeasurement of defined benefit obligations                                                  (75)          199    
Income tax on remeasurement of defined benefit obligations                                      8           (83)   
Total comprehensive income for the year                                                     4 063         2 160    
Total comprehensive income attributable to:                                                                        
Owners of Imperial                                                                          3 899         2 209    
Non-controlling interest                                                                      164           (49)   
                                                                                            4 063         2 160    

Earnings per share information                                                           
for the year ended 30 June 2018                                                          
                                                                                  %                  
R million                                                                    change          2018          2017                     
Headline earnings reconciliation                                                                                   
Earnings                                                                         26         3 273         2 601    
Recoupment for the disposal of property, plant and equipment (IAS 16)                        (809)         (323)   
Recoupment for the disposal of intangible assets (IAS 38)                                       5             3    
Impairment of property, plant and equipment (IAS 36)                                          117            32    
Impairment of intangible assets (IAS 36)                                                       15            30    
Impairment of goodwill (IAS 36)                                                                92           123    
Impairment of investment in associates and joint ventures (IAS 28)                              8            34    
Loss on disposal of subsidiaries and businesses (IFRS 10)                                     147           151    
Remeasurements included in share of result of associates                                       (6)                 
Reclassification of loss on disposal of available-for-sale                                           
investments (IAS 39)                                                                                         (8)   
Tax effects of headline earnings adjustments                                                  221            66    
Non-controlling interest share of headline earnings adjustments                                (6)           (9)   
Headline earnings                                                                13         3 057         2 700    
Headline earnings per share (cents)*                                                                               
Continuing operations                                                                                              
- Basic                                                                          43           543           379    
- Diluted                                                                        43           527           368    
Discontinued operations                                                                                            
- Basic                                                                                     1 027         1 011    
Motus                                                                            19         1 027           861    
Regent                                                                                                      150    
- Diluted                                                                                     999           983    
Motus                                                                            19           999           837    
Regent                                                                                                      146    
Total operations                                                                                                   
- Basic                                                                          13         1 570         1 390    
- Diluted                                                                        13         1 526         1 351    
Additional information                                                                                             
Net asset value per share (cents)                                                          11 464        10 550    
Dividend per ordinary share (cents)                                                           710           650    
Number of ordinary shares in issue (million)                                                                       
- total shares                                                                              202,0         201,1    
- net of shares repurchased                                                                 198,8         196,6    
- weighted average for basic                                                                194,7         194,3    
- weighted average for diluted                                                              200,3         199,8    
Number of other shares (million):                                                                                  
Deferred ordinary shares to convert to ordinary shares                                        5,8           6,7    
* 2017 represented for discontinued operations.                                                                        
                                                                        

Summarised consolidated statement of financial position
at 30 June 2018                                                                        
                                                                                       
R million                                                       Notes          2018          2017          2016    
ASSETS                                                                                                             
Goodwill and intangible assets                                      9         8 575         9 529         7 501    
Investment in associates and joint ventures                                     752         1 002           993    
Property, plant and equipment                                                 3 042        10 371        11 602    
Transport fleet                                                               5 358         5 560         5 953    
Deferred tax assets                                                             783         1 509         1 387    
Investments and other financial assets                                          206           805           404    
Vehicles for hire                                                                           3 963         3 469    
Inventories                                                                   2 194        16 953        16 717    
Tax in advance                                                                  364           330           484    
Trade and other receivables                                                   9 774        13 353        12 717    
Cash resources                                                                2 818         4 499         2 321    
Assets held for distribution to owners of Imperial                 10        36 637                                
Assets and businesses held for sale                                                           979         6 287    
Total assets                                                                 70 503        68 853        69 835    
EQUITY AND LIABILITIES                                                                                             
Capital and reserves                                                                                               
Share capital and share premium                                               1 030         1 030         1 030    
Shares repurchased                                                             (560)         (574)       (1 226)   
Other reserves                                                                  271            24         1 003    
Retained earnings                                                            22 050        20 262        19 366    
Attributable to owners of Imperial                                           22 791        20 742        20 173    
Put arrangement over non-controlling interest                                  (566)       (1 148)       (1 307)   
Non-controlling interest                                                        900           667           909    
Total equity                                                                 23 125        20 261        19 775    
Liabilities                                                                                                        
Non-redeemable non-participating preference shares                              441           441           441    
Retirement benefit obligation                                                 1 216         1 229         1 531    
Interest-bearing borrowings                                                   8 098        19 146        18 396    
Maintenance and warranty contracts                                                          3 022         3 156    
Deferred tax liabilities                                                      1 137         1 115           881    
Other financial liabilities                                                   1 209         1 952         2 335    
Trade, other payables and provisions                                         10 087        21 350        19 630    
Current tax liabilities                                                         236           337           673    
Liabilities associated with assets held for distribution                                              
to owners of Imperial                                              10        24 954                                
Liabilities associated with businesses held for sale                                                      3 017    
Total liabilities                                                            47 378        48 592        50 060    
Total equity and liabilities                                                 70 503        68 853        69 835    


Summarised consolidated statement of changes in equity
for the year ended 30 June 2018
                                                                                                        Put                       
                                                                                                arrangement                       
                                                                                 Attributable     over non-          Non-                
                             Share capital        Shares      Other   Retained      to owners   controlling   controlling     Total       
R million                      and premium   repurchased   reserves   earnings    of Imperial      interest      interest    equity      
At 30 June 2016                      1 030        (1 226)     1 003     19 366         20 173        (1 307)          909    19 775    
Total comprehensive income                                                                                                 
for the year                                                   (508)     2 717          2 209                         (49)    2 160    
Transfer of reserves         
on disposal of                                                                                          
 Mix Telematics Limited                                        (108)       108                                                         
Movement in of               
statutory reserve                                                11        (11)                                                        
Share-based cost charged     
to profit or loss                                               150                       150                                   150    
Share-based equity           
reserve transferred                                                                                     
to retained earnings         
on vesting                                                      102       (102)                                                        
Shares delivered to                                                                                          
settle share-based           
obligations                                           39        (39)                                                                   
Share-based equity           
reserve hedge cost                                             (222)                     (222)                                 (222)   
Ordinary dividends paid                                                 (1 461)        (1 461)                               (1 461)   
Cancellation of 7 865 456    
ordinary shares                                      613                  (613)                                                        
Non-controlling              
interest acquired,                                                                                         
net of disposals and         
shares issued                                                                                                         119       119    
Net decrease in              
non-controlling                                                                                            
interest through buyouts                                       (167)                     (167)          159           (85)      (93)   
Realisation on disposal of   
subsidiaries                                                   (198)       258             60                                    60    
Non-controlling interest     
share of dividends                                                                                                   (227)     (227)   
At 30 June 2017                      1 030          (574)        24     20 262         20 742        (1 148)          667    20 261    
Total comprehensive income   
for the year                                                    693      3 206          3 899                         164     4 063    
Share-based cost charged     
to profit or loss                                               219                       219                                   219    
Share-based equity reserve   
transferred to                                                                                  
retained earnings on vesting                                    135       (135)                                                        
Shares delivered 
to settle                                                                                   
share-based obligations                              170       (170)                                                                   
Share-based equity           
reserve hedge cost                                              (32)                      (32)                                  (32)   
Ordinary dividends paid                                                 (1 285)        (1 285)                               (1 285)   
Repurchase of 712 857 shares 
at an average cost of        
R219 per share                                      (156)                                (156)                                 (156)   
Non-controlling interest     
acquired, net of disposals                                                                                 
and shares issued                                                                                                     350       350    
Net decrease in              
non-controlling                                                                                            
interest through buyouts                                       (596)                     (596)          582           (88)     (102)   
Realisation on disposal of   
subsidiaries                                                     (2)         2                                                         
Non-controlling interest     
share of dividends                                                                                                   (193)     (193)   
At 30 June 2018                      1 030          (560)       271     22 050         22 791          (566)          900    23 125    


Summarised consolidated statement of cash flows
for the year ended 30 June 2018

R million                                                                      Note          2018         2017*    
Cash flows from operating activities                                                                               
Cash generated by operations before movements in net working capital                        8 721         8 388    
Movements in net working capital                                                              811           688    
Cash generated by operations before interest and taxes paid                                 9 532         9 076    
Net finance cost                                                                           (1 386)       (1 670)   
Tax paid                                                                                   (1 336)       (1 520)   
Cash generated by operations before capital expenditure on rental assets                    6 810         5 886    
Expansion capital expenditure - rental assets                                                (293)       (1 118)   
Net replacement capital expenditure - rental assets                                          (786)         (591)   
- Expenditure                                                                              (4 052)       (3 422)   
- Proceeds                                                                                  3 266         2 831    
                                                                                            5 731         4 177    
Cash flows from investing activities                                                                               
Acquisition of subsidiaries and businesses                                                 (1 211)       (1 706)   
Disposal of subsidiaries and businesses                                                     2 070            19    
Net proceeds from sale of fixed assets - excluding rental assets                            1 248            45    
Net replacement capital expenditure - excluding rental assets                              (1 008)         (999)   
Net movement in other associates and joint ventures                                                         514    
Net movement in investments, loans and other financial instruments                           (209)          188    
                                                                                              890        (1 939)   
Cash flows from financing activities                                                                               
Hedge cost premium paid                                                                      (362)          (10)   
Settlement of cross-currency swap instruments                                                (152)                 
Repurchase of ordinary shares                                                                (113)                 
Dividends paid                                                                             (1 478)       (1 688)   
Purchase of non-controlling interests                                                        (684)         (252)   
Capital raised from non-controlling interests                                                 223           149    
Net (decrease) increase in interest-bearing borrowings                                     (4 382)          613    
                                                                                           (6 948)       (1 188)   
Net (decrease) increase in cash resources                                                    (327)        1 050    
Effects of exchange rate changes on cash resources in a foreign currency                      129          (224)   
Cash resources at beginning of year                                                         4 499         3 673    
Cash resources at end of year                                                    11         4 301         4 499    
* Restated, refer to note 3.2.                                                                                      


Notes to the summarised consolidated financial statements
for the year ended 30 June 2018

1.  Basis of preparation
    The summarised consolidated financial statements have been prepared in accordance with the framework concepts 
    and 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 2018 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 the minimum requirements of 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 for the year ended 30 June 2018.

    The directors take full responsibility for the preparation of the summarised consolidated financial statements 
    and that the financial information has been correctly extracted from the underlying annual financial statements.
    
    These summarised consolidated financial statements and the full set of consolidated annual financial statements
    have been prepared under the supervision of R Mumford, CA(SA), and were approved by the board of directors 
    on 20 August 2018.

2.  Accounting policies
    The accounting policies adopted and methods of computation used in the preparation of the summarised 
    consolidated financial statements are in accordance with IFRS and are consistent with those of the annual 
    financial statements for the year ended 30 June 2017.

3.  Restatement of comparative information
3.1 Revenue restatement
    Revenue for continuing operations for 2017 has been restated. In 2017, inter-company revenue of R950 million was 
    incorrectly included in external revenue and as a consequence was not eliminated from the consolidated revenue. 
    This error originated from the International Logistics segment. The restatement had no impact on profits, cash 
    flows or the financial position, it only affected revenue and net operating expenses as detailed below: 

    Statement of profit or loss
    R million                                                                                              2017    
    Revenue (decrease)                                                                                     (950)   
    Net operating expenses (decrease)                                                                       950    
    Profit from operations before depreciation and recoupments (no impact)                                          

3.2 Restatement of cash flows
    The June 2017 statement of cash flows was restated to exclude short-term loans and overdrafts from cash and 
    cash equivalents. The movements in short-term loans and overdrafts are now reflected as cash flows under 
    financing activities as part of the net increase (decrease) in interest-bearing borrowings to facilitate 
    improved understanding. The impact was an increase in outflow under financing activities of R896 million 
    as illustrated below. The restatement had no impact on the group's financial position.

    Statement of cash flows                                                                                        
    R million                                                                                              2017    
    Financing activities                                                                                           
    Net decrease in interest-bearing borrowings                                                            (896)   
                                                                                                           (896)   
4.  Presentation of discontinued operations
    The result of Imperial's automotive business (Motus) is presented as a single line item in the summarised 
    consolidated statement of profit or loss under discontinued operations. The assets and related liabilities are 
    shown under "Assets held for distribution to owners of Imperial" and "Liabilities directly associated with 
    assets held for distribution to owners of Imperial" on the summarised consolidated statement of financial position. 
    The summarised consolidated statement of changes in equity and the summarised consolidated statement of cash flows 
    are shown in total for continuing operations (Imperial Logistics), Motus and Regent for 2017. Further disclosure 
    for Motus is provided above and in note 10.

    Certain notes to the consolidated statement of financial position include movements from Motus in the current 
    and prior year up until the point of reclassification as held for distribution to owners of Imperial. The notes 
    to the consolidated statement of profit or loss relate to continuing operations (Imperial Logistics). The 
    earnings per share information is reconciled in total and distinguishes between continuing and discontinued 
    operations for the per share values.

5.  New and revised IFRS in issue but not yet effective
    IFRS that will become applicable to the group in future reporting periods include 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). Details of these standards are outlined in the 30 June 2018 annual 
    consolidated financial statements. The following updates are provided:                                                       

    IFRS 9   The group anticipates that the application of IFRS 9 will have no material impact on amounts reported 
             in respect of the group's financial assets and financial liabilities.
    IFRS 15  A detailed review of the potential impact of IFRS 15 has been finalised. The group, especially in the 
             Logistics operations, has a substantial number of long-term contracts. All material contracts have 
             been assessed for any impact in terms of the five-step approach. This review shows that there will not 
             be a material impact on the current measurement of revenue.
    IFRS 16  The initial assessment has been done and it is estimated that the right of use asset and lease 
             liability that will be recognised on adoption of the standard in the continuing operations will 
             amount to R7,7 billion (Motus: R1,6 billion).                                                       
                                                                                             2018          2017    
6.  Foreign exchange rates                                                                                         
    The following major rates of exchange were used in the translation of the                          
    group's foreign operations:                                                                        
    SA Rand:Euro                                                                                                   
    - closing                                                                               16,01         14,92    
    - average                                                                               15,34         14,81    
    SA Rand:US Dollar                                                                                              
    - closing                                                                               13,71         13,06    
    - average                                                                               12,86         13,58    
    SA Rand:Pound Sterling                                                                                         
    - closing                                                                               18,10         17,02    
    - average                                                                               17,31         17,23    
    SA Rand:Australian Dollar                                                                                      
    - closing                                                                               10,13         10,04    
    - average                                                                                9,97         10,24
    
                                                                                               Rm            Rm    
7.  Other non-operating items                                                                                      
    Remeasurement of financial instruments not held for trading                                73           (29)   
    Remeasurement of put option liabilities                                                    42           (39)   
    Gain on remeasurement of contingent consideration liabilities                              31             2    
    Reclassification of gain on disposal of investment in associate                                           8    
    Capital items                                                                            (186)         (228)   
    Impairment of goodwill                                                                    (26)          (86)   
    Loss on disposal of subsidiaries, businesses and associates                              (149)          (64)   
    Business acquisition costs                                                                (11)          (78)   
                                                                                             (113)         (257)   
8.  Net finance cost
    Net interest paid                                                                        (649)         (826)   
    Fair value losses on interest-rate swap instruments                                                      (5)   
                                                                                             (649)         (831)   

    R million                                                                                2018          2017    
9.  Goodwill and intangible assets                                                                                 
    Goodwill                                                                                                       
    Cost                                                                                    7 298         7 679    
    Accumulated impairment                                                                 (1 077)         (985)   
                                                                                            6 221         6 694    
    Carrying value at beginning of year                                                     6 694         5 424    
    Net acquisition and disposal of businesses                                                213         2 012    
    Impairment charge                                                                         (92)         (123)   
    Currency adjustments                                                                      359          (619)   
    Reclassified to assets held for distribution to owners of Imperial                       (953)                 
    Carrying value at end of year                                                           6 221         6 694    
    Intangible assets                                                                       2 354         2 835    
    Goodwill and intangible assets                                                          8 575         9 529    

10. Assets and associated liabilities held for distribution to owners of Imperial
    The assets and associated liabilities held for distribution to owners of Imperial relate to Motus.
    The major classes of assets and liabilities held for distribution to owners of Imperial were as follows:
    Assets
    Goodwill and intangible assets                                                          1 230                      
    Property, plant and equipment                                                           6 787                      
    Vehicles for hire                                                                       3 924                      
    Investments, investment in associates and joint ventures                                1 001                      
    Inventory                                                                              15 636                      
    Trade and other receivables                                                             5 258                      
    Income tax assets                                                                       1 084                      
    Cash resources                                                                          1 483                      
    Properties held for sale                                                                  234                      
    Assets held for distribution to owners of Imperial                                     36 637                      
    Liabilities                                                                                                        
    Interest-bearing borrowings                                                             7 328                      
    Maintenance and warranty contracts                                                      2 846                      
    Trade and other payables and provisions                                                14 014                      
    Income tax liabilities                                                                    672                      
    Other liabilities                                                                          94                      
    Liabilities associated with assets held for distribution to owners of Imperial         24 954                      
11. Cash resources                                                                                                     
    Cash resources - as disclosed on the statement of financial position                    2 818         4 499    
    Cash resources - included in assets held for distribution to owners of Imperial         1 483                      
                                                                                            4 301         4 499    


12. Fair value of financial instruments
    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.                                                       

    Fair value of financial assets and financial liabilities carried at amortised cost
    The following table sets out instances where the carrying amount of financial liabilities, as recognised 
    on the statement of financial position, differ from their fair values.                                                   
                                                                                         Carrying          Fair     
    R million                                                                               value        value*    
    Listed corporate bonds^                                                                 3 548         3 533    
    Listed non-redeemable non-participating preference shares                                 441           322    
    *Level 2 of the fair value hierarchy as derived from a market which is not considered active.
    ^Redeemed on 6 August 2018, refer to note 15.

    The fair values of the remainder of the group's financial assets and financial liabilities approximate their 
    carrying values.

    The following table presents the valuation categories used in determining the fair values of financial 
    instruments carried at fair value.                                                       
    R million                                                                             Level 2       Level 3    
    Financial assets                                                                                               
    Interest-rate swap instruments and foreign exchange contracts (included                           
    in trade receivables)                                                                       9                  
    Foreign exchange contracts (included in assets held for distribution                              
    to owners of Imperial)                                                                    432                  
    Financial liabilities                                                                                          
    Put option liabilities (included in other financial liabilities)                                      1 015    
    Contingent consideration liabilities (included in other financial liabilities)                           14    
    Cross-currency and interest-rate swap instruments (included in other                              
    financial liabilities)                                                                     22                  
    Foreign exchange contracts (included in trade, other payables and provisions)              15                  
    Foreign exchange contracts (included in liabilities held for distribution to                      
    owners of Imperial)                                                                        46                  

    Transfers between fair value 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.                                                       

12. Fair value of financial instruments continued
    Movement 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 
    instruments carried at fair value:
                                                                                        Contigent
                                                                            Put     consideration              
    R million                                                option liabilities       liabilities         Total        
    Carrying value at beginning of the year                               1 553                45         1 598    
    Arising on acquisition of business                                                        102           102    
    Fair value to profit or loss                                            (42)              (31)          (73)   
    Settlements                                                            (582)             (100)         (682)   
    Currency adjustments                                                     86                (2)           84    
    Carrying value at end of year                                         1 015                14         1 029    

    Level 3 sensitivity information
    The fair values of the level 3 financial instruments were estimated by applying an income approach valuation 
    method including a present value discount technique. The fair value measurements are 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.
                                                                                         Increase      Decrease     
                                                                       Carrying       in carrying   in carrying     
    R million                                                             value             value         value    
    FINANCIAL INSTRUMENT AND KEY ASSUMPTION                                                                        
    Put option liabilities / earnings growth                              1 015                 3           (17)   
    Contingent consideration liabilities / assumed profits                   14                              (1)   
                                                                                                                   
    R million                                                                                2018          2017    
13. Contingencies and commitments                                                                                  
    Capital commitments                                                                       216         1 448    
    Contingent liabilities                                                                    415           649    

14. Significant related party transactions
    As part of the implementation process for separate listing of Imperial's automotive operations, known as 
    Motus, the following significant transfer of businesses, between related parties within the group occurred 
    during the year:

    Imperial Group Limited transferred its logistics business to Imperial Logistics South Africa Holdings 
    Proprietary Limited. Imperial Group Limited changed its name to Motus Group Limited.

    Imperial Holdings Limited transferred its interest in Motus Group Limited, Motus Corporation Proprietary Limited 
    and Motus Capital Limited to the newly formed Motus Holdings Limited. Prior to the transfer of Motus Corporation 
    and Motus Capital to Motus Holdings, Imperial Holdings transferred its automotive subsidiaries in South Africa to 
    Motus Corporation and its southern African automotive subsidiaries to Motus Capital. Motus Holdings Limited, the 
    new parent of Motus Group, Motus Corporation and Motus Capital, is the designated entity for separate listing on 
    the Johannesburg Stock Exchange.                                                       

    The above transfers of businesses were completed in terms of asset-for-share transactions, at fair value. 
    The group's consolidated financial statements were not affected by the above transactions as all inter-group 
    income and expenses were eliminated in full.

15. Events after the reporting period
    On 6 August 2018 the group redeemed its listed corporate bonds at market value out of existing facilities at a 
    premium of R14 million over their carrying value.

    On 13 August 2018, the group proposed the repurchase and delisting of the non-redeemable, non-participating
    preference shares.

    For dividend declarations, refer above.


Business combinations during the year
Businesses                                           
acquired                  Nature of business         Operating segment             Date acquired        %         Rm    
                    
Surgipharm Limited        Markets and                Logistics African Regions          Jul 2017       70        485
                          distributes 
                          pharmaceutical, 
                          medical, surgical 
                          and allied supplies 
                          in Kenya

Pentagon Motor            Headquarted in             Vehicle Retail and Rental          Aug 2017      100        479
Holdings Limited          Derbyshire, England, 
                          operates 20 prime retail 
                          dealerships for numerous 
                          leading car and van 
                          manufacturers          

SWT Group                 Based in Australia         Vehicle Retail and Rental          Sep 2017       75        261 
Proprietary Limited       operates 16 car 
                          dealerships                         
  
Arco Motor Industry       Based in Taiwan, 
Co Limited                retails motor vehicle 
                          engine parts around 
                          the world                  Aftermarket Parts                  Mar 2018       60        185    

Individually 
immaterial acquisitions                                                                                          119    
                                                                                                               1 529    

Fair value of assets acquired and liabilities assumed at date of acquisition
                                         Individually                                        Individually       
                                           immaterial       Total                              immaterial   Total 
R million                   Surgipharm   acquisitions   Logistics   Pentagon    SWT   Arco   acquisitions   Motus*    
Assets                                                                                                                
Intangible assets                                                                                         
(excluding goodwill)               191                        191          2            43              7       52    
Property, plant                                                                                           
and equipment                       33              5          38        338     26      4              7      375    
Inventories                        234             25         259      1 758    255     51             41    2 105    
Trade and other receivables        280             34         314        427     55     25             12      519    
Income tax assets                    5                          5         12     11                             23    
Cash resources                      12              5          17         75     23    120                     218    
                                   755             69         824      2 612    370    243             67    3 292    
Liabilities                                                                                                           
Interest-bearing borrowings         82                         82         69    240                     1      310    
Other financial liabilities        198                        198                                                     
Income tax liabilities              35              3          38          4      8     15                      27    
Trade, other payables and                                                                                 
provisions                         234             24         258      2 230     58     26             10    2 324    
                                   549             27         576      2 303    306     41             11    2 661    
Acquirees' carrying amount                                                                                
at acquisition                     206             42         248        309     64    202             56      631    
Non-controlling interests          (62)           (13)        (75)       (19)   (16)   (81)                   (116)   
Net assets acquired                144             29         173        290     48    121             56      515    
Purchase consideration                                                                                    
transferred                        485             52         537        479    261    185             67      992    
Cash paid                          393             42         435        479    261    185             67      992    
Contingent consideration            92             10         102                                                     
Excess of purchase price                                                                                  
over net assets acquired           341             23         364        189    213     64             11      477    
*The assets and liabilities of entities acquired by Motus have been reclassified to held for distribution to 
 owners of Imperial at 30 June 2018.


Reasons for the acquisitions
Reasons for the acquisition are outlined in this report.                                         

Details of contingent consideration
The contingent consideration requires the group to pay the vendors an additional total amount of R102 million 
over a period of six to 24 months if the entity's net profit after tax exceeds certain profit targets. The 
contingent consideration liability pertaining to Surgipharm was paid during the year.

Acquisition costs
Acquisition costs for business acquisitions concluded during the year for continuing operations amounted to 
R2 million (Motus: R6 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                                                             
R million                                                                          Logistics              Motus     
                                                                                acquisitions       acquisitions    
The contributions of the new acquisitions during the year                 
were as follows:                                                          
Revenue                                                                                1 048              8 194    
Operating profit                                                                         105                119    
Profit after tax                                                                          48                 38    
The following was taken into account in arriving at the                   
profit after tax:                                                         
After tax funding cost for the new acquisitions                                           12                 18    
Amortisation of intangible assets arising on acquisition                                  33                  3    
Had the businesses been acquired at the beginning of the year their       
contributions would have been as follows:                                 
Revenue                                                                                1 154             10 070    
Operating profit                                                                         117                132    
Profit after tax                                                                          56                 44    
                                                                                                                   
                                                                                  Continuing       Discontinued     
R million                                                                         operations         operations    
The results of the combined continuing operations and the combined        
discontinued operations would have been as follows:                       
Revenue                                                                               51 409             79 256    
Operating profit                                                                       2 825              3 606    
Profit after tax                                                                       1 104              2 318    

Separate identifiable intangible assets
As at the acquisition date, the fair value of the separately identifiable intangible assets for Surgipharm was 
R191 million and Arco was R42 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-from-royalty method for the brand name.
The significant unobservable valuation inputs were as follows:
                                                                                  Surgipharm               Arco    
                                                                                           %                  %    
Brand name/trademark                                                                                               
- Discount rates                                                                        17,4               16,9    
- Royalty rate                                                                           0,8                1,8    
Contract-based intangible assets                                                                                   
- Weighted average discount rates                                                15,0 - 15,8        14,5 - 14,9    
- Terminal growth rates                                                                  5,6                2,0    
The assumptions used in arriving at projected cash flows were based on past experience and adjusted for any 
expected changes.

Other details
Trade and other receivables acquired by Logistics had gross contractual amounts of R382 million of which 
R68 million were doubtful. The Motus acquisition had gross contractual receivables of R526 million with 
R7 million as 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 - continuing operations
for the year ended 30 June 2018

Profit or loss
                                                                     Logistics            Logistics            Logistics                 
                                                 Imperial           South Africa        African Regions       International                
R million                                     2018      2017        2018     2017        2018    2017        2018      2017    
Revenue                                     51 303    49 635      16 324   16 106      10 251   8 647      23 200    21 517    
- South Africa                              16 214    16 416      16 324   16 106                                              
- Rest of Africa                            10 823     9 947                           10 251   8 647                          
- International                             24 266    23 272                                               23 200    21 517    
Operating profit                             2 813     2 739         950      936         708     702       1 084       972    
- South Africa                                 926       906         950      936                                              
- Rest of Africa                               759       740                              708     702                          
- International                              1 128     1 093                                                1 084       972    
Depreciation, amortisation,                                                                                         
impairments and recoupments                 (1 477)   (1 448)       (509)    (386)       (288)   (239)       (643)     (637)   
- South Africa                                (526)     (407)       (509)    (386)                                             
- Rest of Africa                              (297)     (260)                            (288)   (239)                         
- International                               (654)     (781)                                                (643)     (637)   
Net finance cost                              (649)     (831)       (276)    (298)       (223)   (212)       (221)     (195)   
- South Africa                                (205)     (389)       (276)    (298)                                             
- Rest of Africa                              (232)     (229)                            (223)   (212)                         
- International                               (212)     (213)                                                (221)     (195)   
Pre-tax profits*                             1 837     1 344         683      771         292      85         702       563    
- South Africa                                 758       659         683      771                                              
- Rest of Africa                               332       101                              292      85                          
- International                                747       584                                                  702       563    
Additional segment information                                                                                                 
Analysis of revenue by type                                                                                                    
- Sale of goods                              9 747     8 751       1 072      860       8 664   7 106                          
- Rendering of services                     41 556    40 884      15 148   15 186       1 523   1 474      23 186    21 517    
External revenue                            51 303    49 635      16 220   16 046      10 187   8 580      23 186    21 517    
Inter-group revenue                                                  104       60          64      67          14              
                                            51 303    49 635      16 324   16 106      10 251   8 647      23 200    21 517    
Analysis of depreciation,                                                                                           
amortisation, impairments                                                                                           
and recoupments                             (1 477)   (1 448)       (509)    (386)       (288)   (239)       (643)     (637)   
Depreciation and amortisation               (1 126)   (1 204)       (539)    (553)        (80)    (83)       (491)     (487)   
Recoupments and impairments                     66       261          78      211         (22)     10          25        66    
Amortisation of intangible                                                                                          
assets arising from business combinations     (417)     (505)        (48)     (44)       (186)   (166)       (177)     (216)   
Share of results of associates 
(included in pre-tax profits)                   56        61           7        5          14      19          29        28    
Operating margin (%)                           5,5       5,5         5,8      5,8         6,9     8,1         4,7       4,5
* Refer to glossary of terms below.    
                                                                         
Profit or loss (continued)
                                        Businesses                                        Total              Head office                
                                       held for sale         Eliminations               Logistics         and eliminations                            
R million                             2018       2017       2018       2017         2018         2017      2018       2017    
Revenue                              1 717      3 522        (93)       (77)      51 399       49 715       (96)       (80)   
- South Africa                          79        469        (93)       (77)      16 310       16 498       (96)       (82)   
- Rest of Africa                       572      1 300                             10 823        9 947                         
- International                      1 066      1 753                             24 266       23 270                    2    
Operating profit                       111        159                    (5)       2 853        2 764       (40)       (25)   
- South Africa                           2        (12)                   (5)         952          919       (26)       (13)   
- Rest of Africa                        51         38                                759          740                         
- International                         58        133                              1 142        1 105       (14)       (12)   
Depreciation, amortisation,      
impairments and recoupments            (21)      (166)        (7)        (6)      (1 468)      (1 434)       (9)       (14)   
- South Africa                          (1)        (5)        (7)        (6)        (517)        (397)       (9)       (10)   
- Rest of Africa                        (9)       (21)                              (297)        (260)                        
- International                        (11)      (140)                              (654)        (777)                  (4)   
Net finance cost                       (22)       (52)        32        (11)        (710)        (768)       61        (63)   
- South Africa                                    (10)        32        (11)        (244)        (319)       39        (70)   
- Rest of Africa                        (9)       (17)                              (232)        (229)                        
- International                        (13)       (25)                              (234)        (220)       22          7    
Pre-tax profits*                        80         17         33        (16)       1 790        1 420        47        (76)   
- South Africa                           2        (29)        33        (16)         718          726        40        (67)   
- Rest of Africa                        40         16                                332          101                         
- International                         38         30                                740          593         7         (9)   
Additional segment information                                                                                                
Analysis of revenue by type                                                                                                   
- Sale of goods                                   772         11         12        9 747        8 750                    1    
- Rendering of services              1 665      2 627         34         44       41 556       40 848                   36    
External revenue                     1 665      3 399         45         56       51 303       49 598                   37    
Inter-group revenue                     52        123       (138)      (133)          96          117       (96)      (117)   
                                     1 717      3 522        (93)       (77)      51 399       49 715       (96)       (80)   
Analysis of depreciation,        
amortisation, impairments and    
recoupments                            (21)      (166)        (7)        (6)      (1 468)      (1 434)       (9)       (14)   
Depreciation and amortisation          (15)       (87)        (7)        (6)      (1 132)      (1 216)        6         12    
Recoupments and impairments                                                           81          287       (15)       (26)   
Amortisation of intangible       
assets arising from              
business combinations                   (6)       (79)                              (417)        (505)                        
Share of results of associates   
(included in pre-tax profits)                                                         50           52         6          9    
Operating margin (%)                                                                 5,6          5,6                         
* Refer to glossary of terms below.

Segmental information - discontinued operations
for the year ended 30 June 2018

Profit or loss
                                                            Vehicle Import          Vehicle Retail          Aftermarket
                                       Motus               and Distribution           and Rental               Parts
R million                         2018         2017        2018        2017        2018        2017       2018      2017^    
Revenue                         77 659       66 540      20 128      18 157      62 759      53 362      6 632      6 153    
- South Africa                  53 798       50 842      19 144      17 116      40 051      38 850      6 464      6 120    
- Rest of Africa                 1 199        1 224         984       1 041         176         150         38         33    
- International                 22 662       14 474                              22 532      14 362        130               
Operating profit                 3 593        3 310         788         728       1 687       1 478        447        406    
- South Africa                   3 095        2 903         748         730       1 258       1 067        421        409    
- Rest of Africa                    94           52          40          (2)         54          57         (1)        (3)   
- International                    404          355                                 375         354         27               
Depreciation, amortisation,    
impairments and recoupments       (751)      (1 390)       (515)       (622)       (182)       (721)       (40)       (41)   
- South Africa                  (1 206)      (1 287)       (495)       (606)       (657)       (635)       (40)       (40)   
- Rest of Africa                   (62)         (42)        (20)        (16)        (42)        (25)                   (1)   
- International                    517          (61)                                517         (61)                         
Net finance cost                  (737)        (849)       (347)       (499)       (429)       (356)       (68)       (69)   
- South Africa                    (589)        (751)       (328)       (483)       (302)       (276)       (66)       (69)   
- Rest of Africa                   (31)         (27)        (19)        (16)        (12)        (11)                         
- International                   (117)         (71)                               (115)        (69)        (2)              
Pre-tax profits*                 3 448        2 090         432        (178)      1 842       1 127        388        364    
- South Africa                   2 516        1 789         435        (145)        935         809        362        345    
- Rest of Africa                    40           32          (3)        (33)         42          46                    19    
- International                    892          269                                 865         272         26               
Additional segment information                                                                                               
Analysis of revenue by type                                                                                                  
- Sale of goods                 68 668       58 836       7 920       6 274      54 727      46 317      6 540      6 055    
- Rendering of services          8 712        7 418         222         186       7 195       6 372          2          2    
External revenue                77 380       66 254       8 142       6 460      61 922      52 689      6 542      6 057    
Inter-group revenue                279          286      11 986      11 697         837         673         90         96    
                                77 659       66 540      20 128      18 157      62 759      53 362      6 632      6 153    
Analysis of depreciation,      
amortisation, impairments      
and recoupments                   (751)      (1 390)       (515)       (622)       (182)       (721)       (40)       (41)   
Depreciation and amortisation   (1 340)      (1 371)       (527)       (637)       (760)       (690)       (39)       (37)   
Recoupments and impairments        604           (3)         12          15         585         (20)         6          1    
Amortisation of intangible     
assets arising from business   
combinations                       (15)         (16)                                 (7)        (11)        (7)        (5)   
Share of results of associates 
(included in pre-tax profits)       34           42          12          (6)          3           3         15         39    
Operating margin (%)               4,6          5,0         3,9         4,0         2,7         2,8        6,7        6,6
* Refer to glossary of terms below.
^ Revenue of R2 271 million was incorrectly included in Vehicle Retail and Rental's inter-group revenue. 
  2017 had been restated to reallocate the R2 271 million from Vehicle Retail and Rental to Eliminations. The impact 
  was a decrease in the revenue of Vehicles Retail and Rental with an opposite increase in Eliminations. Motus' total 
  revenue remained the same.    

Profit or loss (continued)
                                           Motor Related         Businesses
                                         Financial Services     held for sale             Eliminations                
R million                                 2018        2017      2018      2017          2018         2017^    
Revenue                                  2 166       2 036                 427       (14 026)      (13 595)   
- South Africa                           2 166       2 036                 315       (14 027)      (13 595)   
- Rest of Africa                                                                           1                  
- International                                                            112                                
Operating profit                           889         833                  (2)         (218)         (133)   
- South Africa                             889         833                  (3)         (221)         (133)   
- Rest of Africa                                                                           1                  
- International                                                              1             2                  
Depreciation, amortisation,       
impairments and recoupments               (174)       (183)                              160           177    
- South Africa                            (174)       (183)                              160           177    
- Rest of Africa                                                                                              
- International                                                                                               
Net finance cost                           (49)        (10)                (11)          156            96    
- South Africa                             (49)        (10)                (10)          156            97    
- Rest of Africa                                                                                              
- International                                                             (1)                         (1)   
Pre-tax profits*                           844         828                 (16)          (58)          (35)   
- South Africa                             844         828                 (13)          (60)          (35)   
- Rest of Africa                                                                           1                  
- International                                                             (3)            1                  
Additional segment information                                                                                
Analysis of revenue by type                                                                                   
- Sale of goods                                                            371          (519)         (181)   
- Rendering of services                  1 098         823                  50           195           (15)   
External revenue                         1 098         823                 421          (324)         (196)   
Inter-group revenue                      1 068       1 213                   6       (13 702)      (13 399)   
                                         2 166       2 036                 427       (14 026)      (13 595)   
Analysis of depreciation,         
amortisation, impairments         
and recoupments                           (174)       (183)                              160           177    
Depreciation and amortisation             (173)       (184)                              159           177    
Recoupments and impairments                 (1)          1                                 2                  
Amortisation of intangible        
assets arising from business      
combinations                                                                              (1)                 
Share of results of associates    
(included in pre-tax profits)                4           5                                               1    
Operating margin (%)                      41,0        40,9                                                  
* Refer to glossary of terms below.
^ Revenue of R2 271 million was incorrectly included in Vehicle Retail and Rental's inter-group revenue. 
  2017 had been restated to reallocate the R2 271 million from Vehicle Retail and Rental to Eliminations. The impact 
  was a decrease in the revenue of Vehicles Retail and Rental with an opposite increase in Eliminations. Motus' total 
  revenue remained the same.    


Segmental information - continuing operations
at 30 June 2018

Financial position
                                                              Logistics            Logistics             Logistics                 
                                       Imperial             South Africa        African Regions        International                
R million                          2018         2017       2018       2017       2018       2017        2018        2017    
Assets                                                                                                                      
Goodwill and intangible assets    8 575        9 529        860        920      2 601      2 210       5 105       5 540    
Property, plant and equipment     3 042       10 371      1 333      1 256        387        356       1 433       2 278    
Transport fleet                   5 358        5 560      2 475      2 528        156        306       2 760       2 763    
Vehicles for hire                              3 963                                                                        
Investments in associates      
(excluding loans advanced      
to associates)                      510          686         70         17        296        298         176         137    
Investments                          30          403         29         23                                 5           5    
Inventories                       2 194       16 953        417        324      1 623      1 157         154         249    
Trade and other receivables       9 774       13 353      4 080      3 824      1 993      1 356       3 744       3 830    
Cash resources                                   207                                                                        
Operating assets#                29 483       61 025      9 264      8 892      7 056      5 683      13 377      14 802    
- South Africa                    9 050       34 668      9 264      8 892                                                  
- Rest of Africa                  7 056        6 464                            7 056      5 683                            
- International                  13 377       19 893                                                  13 377      14 802    
Liabilities                                                                                                                 
Retirement benefit             
obligations                       1 216        1 229                                                   1 216       1 229    
Maintenance and warranty       
contracts                                      3 022                                                                        
Trade and other payables       
and provisions                   10 087       21 350      3 727      4 076      2 387      1 922       3 680       3 945    
Other financial liabilities         194          399         24         33        157         76           2                
Operating liabilities#           11 497       26 000      3 751      4 109      2 544      1 998       4 898       5 174    
- South Africa                    4 055       15 773      3 751      4 109                                                  
- Rest of Africa                  2 544        2 223                            2 544      1 998                            
- International                   4 898        8 004                                                   4 898       5 174    
Net working capital#              1 881        8 956        770         72      1 229        591         218         134    
- South Africa                      434        6 963        770         72                                                  
- Rest of Africa                  1 229          914                            1 229        591                            
- International                     218        1 079                                                     218         134    
Net debt#                         5 720       15 088      2 217      1 108        659      2 473       3 117       5 516    
- South Africa                    1 944        7 182      2 217      1 108                                                  
- Rest of Africa                    659        2 781                              659      2 473                            
- International                   3 117        5 125                                                   3 117       5 516    
Net capital expenditure^#          (839)      (2 710)      (397)       141        216        (93)       (373)       (554)   
- South Africa                   (1 213)      (1 900)      (397)       141                                                  
- Rest of Africa                    161         (165)                             216        (93)                           
- International                     213         (645)                                                   (373)       (554)   
* The assets and liabilities of Motus at 30 June 2018 have been reclassified to assets held for distribution to 
  owners of Imperial and are therefore not included on this segment balance sheet for 2018. Refer to the Motus segment 
  balance sheet.
^ Net capital expenditure for 2017 exclude Regent's net capital expenditure inflow of R47 million. The net capital 
  expenditure on the statement of cash flows amounts to R2 663 million which include the R47 million inflow from Regent.
# Refer to glossary of terms below.

Financial position (continued)  
                                                                                  Head office
                                  Eliminations          Total Logistics        and eliminations           Motus*                 
R million                        2018       2017        2018        2017       2018       2017       2018         2017    
Assets                                                                                                                    
Goodwill and intangible assets     21          4       8 587       8 674        (12)         9                     846    
Property, plant and equipment      54        178       3 207       4 068       (165)        90                   6 213    
Transport fleet                                        5 391       5 597        (33)       (37)                           
Vehicles for hire                                                                                                3 963    
Investments in associates      
(excluding loans advanced      
to associates)                    (39)                   503         452          7          8                     226    
Investments                                               34          28         (4)        54                     321    
Inventories                                            2 194       1 730                                        15 223    
Trade and other receivables       (11)        83       9 806       9 093        (32)       (16)                  4 276    
Cash resources                                                                                                     207    
Operating assets#                  25        265      29 722      29 642       (239)       108                  31 275    
- South Africa                     25        265       9 289       9 157       (239)       (15)                 25 526    
- Rest of Africa                                       7 056       5 683                                           781    
- International                                       13 377      14 802                   123                   4 968    
Liabilities                                                                                                               
Retirement benefit             
obligations                                            1 216       1 229                                                  
Maintenance and                
warranty contracts                                                                                               3 022    
Trade and other payables       
and provisions                    142        276       9 936      10 219        151        228                  10 903    
Other financial liabilities        (1)                   182         109         12        172                     118    
Operating liabilities#            141        276      11 334      11 557        163        400                  14 043    
- South Africa                    141        276       3 892       4 385        163        372                  11 016    
- Rest of Africa                                       2 544       1 998                                           225    
- International                                        4 898       5 174                    28                   2 802    
Net working capital#             (153)      (193)      2 064         604       (183)      (244)                  8 596    
- South Africa                   (153)      (193)        617        (121)      (183)      (369)                  7 453    
- Rest of Africa                                       1 229         591                                           323    
- International                                          218         134                   125                     820    
Net debt#                        (195)       198       5 798       9 295        (78)        14                   5 779    
- South Africa                   (195)       198       2 022       1 306        (78)       817                   5 059    
- Rest of Africa                                         659       2 473                                           308    
- International                                        3 117       5 516                  (803)                    412    
Net capital expenditure^#         (24)        14        (578)       (492)        61        (45)      (322)      (2 173)   
- South Africa                    (24)        14        (421)        155         61        (44)      (853)      (2 012)   
- Rest of Africa                                         216         (93)                             (55)         (71)   
- International                                         (373)       (554)                   (1)       586          (90)   
* The assets and liabilities of Motus at 30 June 2018 have been reclassified to assets held for distribution to 
  owners of Imperial and are therefore not included on this segment balance sheet for 2018. Refer to the Motus segment 
  balance sheet.
^ Net capital expenditure for 2017 exclude Regent's net capital expenditure inflow of R47 million. The net capital 
  expenditure on the statement of cash flows amounts to R2 663 million which include the R47 million inflow from Regent.
# Refer to glossary of terms below.

Segmental information - discontinued operations
at 30 June 2018

Financial position                                                                                                   
                                                                         Vehicle Import           Vehicle Retail                  
                                                    Motus               and Distribution           and Rental                 
R million                                      2018         2017       2018         2017        2018         2017    
Assets                                                                                                               
Goodwill and intangible assets                1 230          846        122          110         649          355    
Property, plant and equipment                 6 787        6 213        682          511       5 590        5 279    
Vehicles for hire                             3 924        3 963      1 685        1 991       2 231        1 959    
Investments in associates                 
(excluding loans advanced                 
to associates)                                  263          226         27           21          53           17    
Investments                                     653          321          4            4                             
Inventories                                  15 636       15 223      3 798        5 445      10 167        8 350    
Trade and other receivables                   5 258        4 276      2 649        1 977       3 131        2 295    
Cash resources                                               207                                                     
Operating assets#                            33 751       31 275      8 967       10 059      21 821       18 255    
- South Africa                               24 471       25 526      8 448        9 439      13 333       13 198    
- Rest of Africa                                710          781        519          620         172          139    
- International                               8 570        4 968                               8 316        4 918    
Liabilities                                                                                                          
Maintenance and warranty contracts            2 846        3 022                                                     
Trade and other payables and provisions      14 014       10 903      5 766        5 212       9 435        6 936    
Other financial liabilities                      94          118         50          102          43           11    
Operating liabilities#                       16 954       14 043      5 816        5 314       9 478        6 947    
- South Africa                               11 571       11 016      5 593        5 105       4 365        4 132    
- Rest of Africa                                253          225        223          209          23           13    
- International                               5 130        2 802                               5 090        2 802    
Net working capital#                          6 880        8 596        681        2 210       3 863        3 709    
- South Africa                                5 183        7 453        493        1 916       2 429        2 871    
- Rest of Africa                                229          323        188          294          32           18    
- International                               1 468          820                               1 402          820    
Net debt#                                     5 845        5 779      1 099        2 895       4 648        3 678    
- South Africa                                4 796        5 059        960        2 658       3 638        3 239    
- Rest of Africa                                196          308        139          237          39           52    
- International                                 853          412                                 971          387    
Net capital expenditure#                       (322)      (2 173)      (124)      (1 227)       (170)      (1 112)   
- South Africa                                 (853)      (2 012)      (120)      (1 212)       (706)        (967)   
- Rest of Africa                                (55)         (71)        (4)         (15)        (51)         (55)   
- International                                 586          (90)                                587          (90)   
# Refer to glossary of terms below.

Financial position (continued)
                                                Aftermarket              Motor Related
                                                    Parts             Financial Services           Eliminations
R million                                      2018       2017         2018         2017         2018         2017    
Assets                                                                                                                
Goodwill and intangible assets                  455        364            4            9                         8    
Property, plant and equipment                   420        413          109           11          (14)          (1)   
Vehicles for hire                                                     1 732        1 915       (1 724)      (1 902)   
Investments in associates               
(excluding loans advanced               
to associates)                                  122        119           52           61            9            8    
Investments                                                             653          317           (4)                
Inventories                                   1 446      1 121          270          397          (45)         (90)   
Trade and other receivables                     691        592          453          682       (1 666)      (1 270)   
Cash resources                                                                       207                              
Operating assets#                             3 134      2 609        3 273        3 599       (3 444)      (3 247)   
- South Africa                                2 912      2 588        3 273        3 599       (3 495)      (3 298)   
- Rest of Africa                                 19         21                                                   1    
- International                                 203                                                51           50    
Liabilities                                                                                                           
Maintenance and warranty contracts                                    2 895        2 915          (49)         107    
Trade and other payables and provisions       1 127        987          709          747       (3 023)      (2 979)   
Other financial liabilities                       1          5                                                        
Operating liabilities#                        1 128        992        3 604        3 662       (3 072)      (2 872)   
- South Africa                                1 082        989        3 604        3 662       (3 073)      (2 872)   
- Rest of Africa                                  7          3                                                        
- International                                  39                                                 1                 
Net working capital#                          1 010        726           14          332        1 312        1 619    
- South Africa                                  933        716           14          332        1 314        1 618    
- Rest of Africa                                 10         10                                     (1)           1    
- International                                  67                                                (1)                
Net debt#                                       945        555       (1 426)      (1 450)         579          101    
- South Africa                                1 068        536       (1 426)      (1 450)         556           76    
- Rest of Africa                                 18         19                                                        
- International                                (141)                                               23           25    
Net capital expenditure#                        (14)      (263)           8         (596)         (22)       1 025    
- South Africa                                  (14)      (262)           8         (596)         (21)       1 025    
- Rest of Africa                                            (1)                                                       
- International                                                                                    (1)                
# Refer to glossary of terms below.

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                        - is the aggregate of interest-bearing borrowings, non-redeemable, non-participating 
                                  preference shares less cash resources.
Net capital expenditure         - is the aggregate of the expansion and replacement capital expenditure of rental 
                                  assets and non-rental assets net of proceeds on sale.
Net working capital             - is inventories plus trade and other receivables less trade and other payables 
                                  and provisions.
Operating assets                - total assets less loans receivable, tax assets, assets of discontinued operations, 
                                  assets of disposal group and in the prior year 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 operations and liabilities of 
                                  disposal groups.
Operating margin (%)            - operating profit divided by revenue.
Pre-tax profit                  - 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 (%)  - this is the return divided by invested capital.
                                - 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 Imperial operates, increased by the share of result of associates and 
                                  joint ventures.
                                - invested capital is a 12-month average of - total equity plus non-redeemable, 
                                  non-participating preference shares plus interest-bearing borrowings less 
                                  cash resources in non-financial services businesses.                                      
Weighted average cost           - calculated by multiplying the cost of each capital component by its 
of capital (WACC) (%)             proportional weight, therefore: WACC = (after tax cost of debt % multiplied by 
                                  average debt weighting) + (cost of equity multiplied by average equity weighting). 
                                  The cost of equity is blended recognising the cost of equity in the different 
                                  jurisdictions in which Imperial operates.    

Corporate information
Directors 
SP Kana# (Chairman), A Tugendhaft##, (Deputy Chairman), RJA Sparks# (Lead Independent Director), 
M Akoojee (Acting Chief Executive Officer and Chief Financial Officer), OS Arbee, P Cooper#, GW Dempster#, 
P Langeni#, MV Moosa##, T Skweyiya#, M Swanepoel
#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
1st Floor, Rosebank Towers
15 Biermann Avenue
Rosebank, 2196

Auditors
Deloitte & Touche
20 Woodlands Drive
The Woodlands
Woodmead
2052

Sponsor
Merrill Lynch SA Proprietary Limited
The Place, 1 Sandton Drive
Sandton, 2196

The results announcement is available on the Imperial website: http://www.imperial.co.za/results/annual-results-2018/index.php


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