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IPL - Imperial Holdings Limited - Audited Preliminary Results for the year ended
25 June 2007
Imperial Holdings Limited
Registration number (1946/021048/06)
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN: ZAE000088076
Headline earnings per share up 17% to 1 434 cents
Revenue up 22% to R66,2 billion
Attributable profit up 24% to R2 776 million
Annual distribution to shareholders up 18% to 560 cents per share
Overview of results
These satisfying results, achieved amid significant challenges to some of our
businesses, bear testimony to the resilience of the group`s business model.
Revenue grew by 22% to R66,2 billion, with the strongest contributions coming
from the Leasing and Capital Equipment, and Distributorships divisions. New
acquisitions contributed approximately 10% to revenue growth. Despite operating
profit being 17% lower in our distributorship division, the group`s total
operating profit grew by 13% and pre-tax profit by 16%. A lower effective tax
rate, the change from consolidation to equity accounting of our investment in
Lereko Mobility and some exceptional items resulted in attributable profit
increasing by 24%. Headline earnings per share were 17% higher.
Challenges to the group included a weaker rand which affected margins in our
vehicle import businesses, a slowdown in vehicle sales due to interest rate
hikes and the introduction of the National Credit Act (NCA), even though it was
only in effect for the month of June. In addition, Commercial Vehicle Holdings
(CVH), our heavy commercial vehicle distribution business incurred a loss at the
operating level, which necessitated decisive management interventions.
The net effect on the group`s operating margin was a reduction to 7.6% from
8.2%.
The diversification of the Leasing and Capital Equipment division by its entry
into the earth moving equipment market delivered excellent results, increasing
revenue and operating profit by 73% and 60% respectively.
The relative contributions of the group`s international operations increased
strongly, with 25% of revenue (2006: 20%), and 13% of operating profit (2006:
8%) earned from sources outside South Africa. Operating margins across the group
were largely maintained against last year, with the exception of
Distributorships where the weaker rand and the operating loss in CVH reduced the
margin from 9.4% to 6.0%. The margin in the second half in distributorships
improved to 6.2% from 5.8% in the first half, largely driven by the passenger
vehicle import business.
Finance cost, including net fair value adjustments, was 31% higher whilst the
net effect of other financial items had a favourable impact.
Income from associates increased by 16%. This included growth of 13% to R203
million from our 49.9% interest in Imperial Bank. Associate income in the
Distributorships division, from our investment in Renault SA, disappointed.
The effective tax rate was 29.2%, down from 35.4%, as a result of the absence of
several unusual charges and non-deductible expenses in the previous year.
The distribution to shareholders will be 18% higher at 560 cents for the full
year, consisting of interim and final distributions of 280 cents each.
Total assets grew by 21.2%, of which investments in associates contributed 3.0%,
property, plant and equipment 3.2%, fleets 2.3%, inventory and trade receivables
6.8% and the others 5.9%.
Whilst the net debt/equity ratio reduced from 91% to 85%, net debt increased by
17% to R11,5 billion in absolute terms. The bulk of the increase was used to
fund expansion in productive capacity such as property, plant and equipment and
revenue-earning fleets. Net working capital increased by R401 million in
absolute terms but, as a percentage of revenue, reduced to 7.0% from 7.8%.
Cash flow
Net cash flow from operating activities decreased by 9% to R3,9 billion, mainly
caused by higher interest costs, and cash tax payments which were R509 million
higher than last year. Replacement capital expenditure was 9% higher and
expansion expenditure was 2% lower. Payments to shareholders were 21% lower due
to R1,5 billion in share buybacks in the previous year. New funding, net of cash
movements was 19% lower at R2,5 billion.
Vehicle sales
The group retailed 106 621 new and 60 406 used vehicles in South Africa,
respectively 104% and 108% of last year`s sales. In addition, we sold 20 251 new
vehicles to outside dealers as a distributor, a 1% increase over last year. The
Australian, Swedish and United Kingdom operations sold 13 259 new and 5 540 used
vehicles, respectively 105% and 120% of last year`s sales.
Expansion of the group
In the Distributorships division, five new car dealerships and three motor cycle
dealerships (including a new Aprilla distributorship for South Africa) were
opened in South Africa, and a Mitsubishi dealership was opened in Sydney,
Australia. The Distributorships division also established a Tata truck hire
business.
The Dealerships division opened two new and eleven used car operations and a new
commercial vehicle operation during the year. As a value-added operation in this
division, we acquired a controlling interest in JurgensCi (Pty) Ltd (Jurgens),
the manu-facturer and distributor of leisure caravans and camping equipment.
Jurgens manufactures and sells approximately 2 500 caravans per annum through a
network of franchised dealers.
Imperial Logistics International acquired 100% of Laabs GmbH Tank-Logistic, a
liquid transport specialist effective from the new financial year. The company
has a fleet of 110 tanker trucks servicing the chemical and food industries in
Europe.
Our parts distribution business in the Distributor-ships division was extended
with the acquisition of Alert Engine Parts, a distributor of engine parts.
Tourvest made seven new investments in individual tourist products in South
Africa, Nigeria and the Caribbean. After the year end, it announced the
acquisition of Drifters, an overland safari business.
In the Leasing and Capital Equipment division, Terex Africa and the distribution
rights for New Holland Construction and JCB Teletruck earthmoving equipment, and
Excelrate battery-handling equip-ment for forklifts were acquired.
Imperial Air Cargo was successfully established in the Aviation division and has
gained a meaningful share of the domestic air cargo market.
Regent Life entered the employee benefits market with the acquisition of the
business of an existing employee benefits consultancy.
Divisional reports
Logistics
The domestic operations had a solid performance with revenue and pre-tax profit
growing by 10.6% and 14.1% respectively, although growth was somewhat impaired
by the partial sale of the division`s fuel distribution business to BEE
entities. The consumer logistics operation performed well, but the car carrier,
Forecourt suffered from lower volumes.
The local division stabilised the margin decline in the first half to achieve a
full-year margin of 7.7% against 7.9% last year. Strict working capital
management and lower net capital expenditure caused a reduced interest charge in
this part of the division.
Imperial Logistics International achieved excellent results with revenue growing
by 5% and operating profit by 13% in euros. After currency conversions, growth
in rand terms was 26% and 32% respectively. The improvement was balanced
throughout the division, having benefited from strong demand for German exports.
Leasing and Capital Equipment
The division achieved an excellent performance, with revenue increasing by 73%
and operating profit by 60%. After finance charges, which increased by 43%, net
profit before tax was 67% higher. The division grew its asset base by R2.0
billion. The diversification into the ownership and operation of higher yielding
earth moving equipment benefited the division, as MCC and Terex gained several
new opencast mining contracts in the platinum industry and executed them well.
These contracts are continuing and substantial new business is under
consideration. The plant-hire business, although a relatively small contributor
to earnings, is also benefiting from increased demand.
The passenger and commercial vehicle leasing business grew its fleet by 13% to
17 462 units, excluding the run-off of the government contract fleet. We
continue to expand our business into the rest of Africa with operations in
Namibia, Botswana, Kenya, Tanzania, Angola and Nigeria.
The forklift leasing business in South Africa performed well, growing its fleet
by 3% to 7 866 units. The forklift business in the UK surrendered the Toyota
forklift franchise during the year but continues to operate as a general
forklift leasing company and achieved good growth in earnings. The UK fleet is
3% higher at 3 138 units.
The division obtained the distributorships for Terex and New Holland
Construction equipment from January and set up a promising new operation which
can take advantage of strong demand for capital equipment throughout the sub-
continent and from the division`s own requirements. In addition we established a
battery power management business, supplying forklift batteries, charges and
generators.
R1.0 billion was added to the division`s fleet value during the year as net
capital expenditure grew by 60%. Inventories, principally stocks of Terex and
New Holland Construction equipment, increased by R640 million.
Aviation
Pleasing results were achieved by the Aviation division, with pre-tax profit
growth of 32%, although a substantial portion has been earned from the sale of
operational aircraft. Imperial has decided to limit new capital allocations to
this division which resulted in a reduction in debt of 17% to R1,9 billion. The
financial leasing operations of our associate, Safair Lease Finance, performed
well, as has the European freight business, Air Contractors. NAC recovered well
from a weak performance last year, with strongly increased sales of 64 new and
61 used fixed and rotor wing aircraft.
Car Rental and Tourism
The car rental operations grew turnover by 15% on a 13% larger average fleet.
Good margin increases were achieved in the rental business in the second half
amid higher accident-related costs and operational challenges due to
exceptionally high demand at peak periods. The used vehicle business experienced
declining volumes and margins which detracted from overall performance, while
the wholly owned tourism operations achieved good growth in profit and
contributed well.
Following the successful extension of the Europcar agency agreement for a
substantial period, we have consolidated the back offices of the Imperial Car
Rental and Europcar businesses effective from the new financial year. We expect
benefits from this initiative to be realised later in the financial year.
Tourvest enjoyed an excellent year with headline earnings per share increasing
by 26%. Operating profit grew by 18% with the strongest contributions coming
from financial services and tourist retail. The company benefited from the
weaker rand which boosted foreign tourist numbers and spending. Several
hospitality products were acquired where synergies exist with our tour
operators. Tourvest`s comprehensive offering to foreign tourists positions the
company well for an expected tourist upswing in the medium term. In addition,
the company has increased its exposure to popular destinations in east Africa to
complement its South African presence.
Distributorships
The division increased revenue by 30%, assisted by the addition of the UK
operations. However, margins in the UK are significantly lower than the South
African businesses. In addition, problems in the South African truck
distribution business and the weaker rand further depressed margins, to leave
divisional operating margin lower at 6.0% compared to last year`s 9.4%. The
division`s operating margin of 5.8% in the first half improved to 6.2% in the
second half.
Associated Motor Holdings, the importer and distributor of popular Asian, and
European vehicle brands, continued to grow market share but recorded a lower
operating margin in the first half due to a weaker rand. Sales of motor cycles
have increased strongly, becoming a notable part of the division. Profitability
from after-sales services and financial services income improved markedly over
the period. The effects of higher interest rates and the settling in of the
National Credit Act have been negative for new car volumes.
An operating loss was incurred in Commercial Vehicle Holdings, where the
increased variety of brands - with the addition of DAF, Renault Trucks and VDL
buses to the original International model range - added significant complexity
to the business. Management changes were made and fundamental restructuring is
under way. We believe that, with the necessary management focus and strong
demand for heavy commercial vehicles, we will be able to effect a turnaround to
underpin a resumption of earlier growth levels.
The DAF and LDV van dealership group in the UK, which was acquired from the Lex
group in April last year, performed in line with our expectations. Multipart, a
distributor of automotive parts from a new state-of-the-art distribution centre
in the Manchester area, performed satisfactorily. The commissioning of the new
distribution centre was successful and further improvements to the business can
now be expected.
The South African auto parts business made a healthy contribution to profits
this year. Management responsibility for the UK and SA auto parts business has
been consolidated and further opportunities in this field are being
pursued.Significant exchange of know how between these businesses will be
achieved.
Dealerships
Revenue rose by 13% to R16,9 billion against a background of increasing
competition and the introduction of new vehicle brands.
Unit sales in the division increased by 10%. Much of this is attributable to the
used car market where unit sales were up 17%. Light commercial vehicle sales
grew by 28%.
Operating margin was 2.7% compared to 2.5% last year. This is attributable to
satisfactory gross margins coupled with good income earned from the sale of
financial intermediary products.
Finance costs increased mainly due to the division`s investments in new
facilities, resulting in pre-tax profit increasing by 9.2% to R343 million.
The introduction of the National Credit Act in June 2007, coupled with interest
rates hikes during the year, had a negative impact on new vehicle sales.
However, we are confident that this is a temporary setback in a long-term growth
phase in the automotive industry.
The Nissan dealer group in Sweden is performing well and made a strong
contribution for the year.
We acquired Jurgens caravans with effect from 1 April 2007 as part of our
strategy of acquiring related accessories businesses.
Insurance
The three businesses in this division - Regent Life Assurance, Regent Insurance
and Imperial Re-Insurance - grew pre-tax profit by 20%, as premium income
increased by 21%. Investment income, including portfolio gains, grew by 30%, an
excellent result from the high base set last year.
The underwriting margin in Regent Insurance remained high and underwriting
profit grew by 16% despite strong upward pressure on accident repair costs.
In the short term, our insurance businesses will be negatively affected by the
new National Credit Act, mainly because single premiums will be replaced by
monthly premiums. Accordingly, premium income in 2008 will be much lower than
last year, but will build up to normal levels despite a possible increase in
policy lapses. Levying monthly premiums instead of single premiums will slow
down the introduction of new investment funds and affect investment income. The
impact on earned premiums, and thus operating profit, will be less.
The effect of these statutory changes will, of course, impact on all players in
the market, but we believe customers` needs for competitive insurance products
for their own peace of mind will soon restore the balance and the long-term
growth prospects of our insurance operations will remain strong.
Black economic empowerment
The impact on the broad range of beneficiaries of our BEE transactions is still
very positive. Since inception an aggregate amount of R1,4 billion has been
earned by previously disadvantaged individuals and communities from the Ukhamba
and Lereko Mobility transactions, which jointly put 16.7% of Imperial`s equity
under black ownership. Ukhamba`s primary investments are a 10.1% stake in
Imperial and a 34% stake in Distribution and Warehousing Network, a distributor
and manufacturer of building materials, which grew headline earnings by 47% for
the year. In addition, Ukhamba has made several smaller strategic investments in
areas related to Imperial`s business.
Accounting for our 49% interest in Lereko Mobility, which holds 6.6% of
Imperial`s equity, has been changed with effect from November 2006, from
consolidation to equity accounting. This was made possible by the improvement in
the assessment of the risk to the group of a R600 million tranche of vendor
finance provided by Imperial to Lereko during June 2005.
Investment in skills development
We announced in February that the board has allocated R100 million to establish
a skills development and training fund. A detailed needs analysis has been
performed throughout the group and a training facility will be launched early in
the new year. The facility will be aimed at improving managerial and other
skills levels throughout the organization and promoting the transformation
process.
Strategic intentions
The group`s portfolio of businesses is being reassessed in pursuit of the
optimal business mix, given the economic outlook, the cost of capital and our
proven skills set. Whereas it is the group`s core business to own, operate and
trade in mobility assets, the capital intensity of this strategy has to be
carefully considered against our gearing capacity. Accordingly, capital has to
be allocated to areas where we expect optimal returns to be achieved, and which
are aligned to our broader strategy for achieving long-term sustainable growth.
The group has proven its ability to create and build businesses of considerable
scale, some of which have reached a stage of maturity to pursue their own
destinies and attract their own investor bases. To this end, advisors have been
appointed and we are evaluating initiatives to release capital from non-core
activities and capital-intensive businesses. A process has been initiated
regarding our 62% stake in the listed tourism company, Tourism Investment
Corporation Limited, which we regard as falling outside of our chosen frame of
tourism activities. In addition, our aviation division (excluding NAC) has been
earmarked for disposal because of its high demand on capital. Whilst the
division is home to fine businesses with exceptional skills in the aviation
industry, it was decided to offer our shares therein for sale to trade buyers
who are willing to commit the necessary capital to realize their full potential.
Lastly, opportunities are being defined for acqui-sitions and the creation and
development of new businesses which fit our business model and area of focus.
Position of the Deputy Chairman and Chief Executive Officer
The board is pleased to announce the appointment of Mr Thulani Gcabashe as the
new Deputy Chairman of Imperial, with effect 1 January 2008. Mr Gcabashe is the
Special Advisor to the Office of the Chairman of Eskom and previously Chief
Executive Officer of Eskom. The position of Deputy Chairman has been vacant
since the death in 2006 of Mr Eric Molobi, who served on the board since 1998.
Mr Bill Lynch retired as chief executive on 4 July 2007 and Mr Hubert Brody was
appointed in his stead.
The board expressed its sincere gratitude to Bill for the 36 years that he
served the group and wished Hubert success in his new position.
Prospects
The retail environment for consumers has deteriorated over the past year and we
expect difficult trading conditions in our motor operations to persist for most
of the new financial year. In addition, the impact of the National Credit Act in
the insurance operations and possible weaker investment markets may limit growth
in our insurance division. However, we have several contra-cyclical businesses
which stand to benefit from continuing strength in the South African and global
economies. In addition, certain businesses in the group have not performed to
their full potential in the past year and their recovery should further assist
in enabling us to achieve overall good growth in earnings.
By order of the board
L Boyd, Chairman
HR Brody, Chief Executive
A H Mahomed, Financial Director
Declaration of distributions
Preference shareholders and Ordinary shareholders
Notice is hereby given that:
* a preference dividend of R4.6932 per preference share has been declared
payable to holders of non-redeemable, non-participating preference shares; and
* a capital distribution from share premium in an amount of 280 cents per
ordinary share has been declared payable to ordinary shareholders.*
* payable in terms of the general authority granted at the annual general
meeting of shareholders held on 1 November 2006.
The company has determined the following salient dates for the payment of the
preference dividend and the capital distribution on ordinary shares:
2007
Last day for preference shares and ordinary shares Thursday, 20 September
respectively to trade cum-preference dividend and cum
capital distribution
Preference and ordinary shares commence trading ex- Friday, 21 September
preference dividend and ex capital distribution
respectively
Record date Friday, 28 September
Payment date Monday, 1 October
Share certificates may not be dematerialised / rematerialised between Friday, 21
September 2007 and Friday, 28 September 2007, both days inclusive.
On Monday, 1 October 2007, amounts due in respect of the preference dividend and
the capital distribution 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 2007 will be posted on or about that date.
Shareholders who have dematerialised their shares will have their accounts, held
at their CSDP or Broker, credited on Monday, 1 October 2007.
In terms of the Exchange Control Regulations of the Republic of South Africa,
cash payments based on emigrant`s shares controlled in terms of the Exchange
Control Regulations will be forwarded to an Authorised Dealer in foreign
exchange controlling their blocked assets. The elections by emigrants for the
above purpose must be made through the Authorised Dealer in foreign exchange
controlling their blocked assets. Payments due to non-residents are freely
transferable from the Republic.
Preferred ordinary shareholders (Unlisted)
Notice is hereby further given that a capital distribution of 267,5 cents per
preferred ordinary share has been declared and is payable to preferred ordinary
share-holders recorded in the registers of the company at the close of business
on Thursday, 27 September 2007.
On Friday, 28 September 2007 the capital distribution will be electronically
transferred to the bank accounts of preferred ordinary shareholders.
On behalf of the board
RA Venter
Group Company Secretary
28 August 2007
Condensed income statement
2007 2006 %
For the years ended 25 June Rm Rm change
Revenue 66 214 54 105 22
Profit from operations before
depreciation and recoupments 6 945 6 090
Depreciation and recoupments (1 921) (1 632)
Operating profit 5 024 4 458 13
Foreign exchange losses (28) (138)
Fair value (losses) gains to
foreign exchange derivatives (11) 26
Fair value gains (losses) on
other financial instruments 19 (74)
Exceptional items 10 (53)
Profit before net financing costs 5 014 4 219 19
Net financing costs (1 026) (782)
Income from associates and
joint ventures 327 282
Profit before taxation 4 315 3 719 16
Income tax expense 1 161 1 234
Profit after taxation 3 154 2 485 27
Attributable to:
Equity holders of Imperial
Holdings Limited 2 776 2 247
Minority interest 378 238
3 154 2 485 27
Cents Cents
Earnings per share*
Ordinary shares
- Basic 1 470,5 1 198,1 23
- Diluted 1 362,8 1 125,8 21
Preferred ordinary shares
- Basic (8 months) 356,7
Additional information
Headline earnings per share*
- Basic 1 434,1 1 222,1 17
- Diluted 1 329,6 1 148,3 16
Earnings per share
reconciliation*
Headline earnings per share 1 434,1 1 222,1
Impairment of property, plant
and equipment 1,9 (4,2)
Profit on sale of property,
plant and equipment 30,0 5,5
Exceptional items 4,5 (25,3)
Basic earnings per share 1 470,5 1 198,1
*Based on the weighted average
number of shares in issue for the
year
Net asset value per share (cents) 6 223,2 5 330,3
Number of ordinary shares
(million)
- in issue 186,7 187,6
- weighted average 185,2 187,5
Number of other shares in issue
(million)
- Preferred ordinary 14,5
- Deferred ordinary 19,3 21,0
Net financing cost Rm Rm
Net interest paid 1 042 812
Capitalised to property,
plant and equipment (13) (4)
Foreign exchange loss on
monetary items 60 284
Fair value gains on borrowings
and interest swaps (63) (310)
1 026 782
Exceptional items
Impairment of goodwill (14) (43)
Profit (loss) on disposal of
investments in subsidiaries,
associates and joint ventures 39 (10)
Loss on closure of business (15)
10 (53)
Condensed balance sheet
2007 2006
At 25 June Rm Rm
ASSETS
Intangible assets 1 238 945
Investments in associates and
joint ventures 2 732 1 602
Property, plant and equipment 5 441 4 231
Transport fleet 2 789 2 570
Leasing assets 6 990 6 443
Vehicles for hire 1 012 896
Deferred tax assets 450 426
Other investments and loans 2 793 2 208
Other non-current financial 842 718
assets
Inventories 9 436 7 535
Taxation in advance 140 108
Trade and other receivables 8 883 8 248
Cash and cash equivalents 2 788 1 630
Total assets 45 534 37 560
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 876 1 762
Shares repurchased and
consolidated shares (1 955) (2 497)
Other reserves 1 203 1 272
Retained earnings 12 397 9 465
Attributable to Imperial
Holdings`
shareholders 12 521 10 002
Minority interest 946 785
Total shareholders` equity 13 467 10 787
Liabilities
Non-redeemable, non-participating
preference shares 441
Equity-settled interest-bearing
borrowings of Lereko Mobility 794
Retirement benefit obligations 230 218
Interest-bearing borrowings 13 845 10 699
Liabilities under insurance
contracts 1 722 1 331
Deferred tax liabilities 1 196 941
Other non-current financial
liabilities 13 127
Trade and other payables
and provisions 13 680 11 545
Current tax liabilities 940 1 118
Total liabilities 32 067 26 773
Total equity and liabilities 45 534 37 560
Supplementary information
Investments in associates
and joint ventures
- At carrying value 1 423 1 029
- Loans 640 573
- Call option (Lereko Mobility) 669
2 732 1 602
Other investments and loans
- Listed, at market value 1 656 1 479
- Unlisted, at fair value 220 171
- Loans receivable 917 558
2 793 2 208
Capital commitments 1 426 1 038
Contingent liabilities 600 810
Basis of preparation
This audited preliminary financial information has been prepared in accordance
with IAS 34 - Interim Financial Reporting and are a summary of the group`s
unqualified audited financial statements.
Our Black Economic Empowerment associate, Lereko Mobility (Proprietary) Limited,
of whom we hold 49% was previously consolidated because there was significant
risk relating to the recovery of the notional capital provided by the group. The
directors are now of the opinion that as the Imperial share price has risen
substantially this risk is now remote and Lereko was equity accounted with
effect from 26 October 2006.
Accounting policies
The accounting policies and methods of computation adopted in preparation of the
audited preliminary financial statements are consistent with those of the annual
financial statements for the year ended 25 June 2006.
Audit report
The annual financial statements have been audited by the group`s auditors,
Deloitte & Touche. Their signed, unmodified audit opinion is available for
inspection at the company`s registered office.
Condensed statement of changes in equity
Share Shares Other Retained Minority Total
capital Repur- reserves earnings interest
and chased/
premium Consoli-
dated
shares
For the years Rm Rm Rm Rm Rm Rm
ended 25 June
Balance at 26 1 929 (1 760) 476 7 245 465 8 355
June 2005
Net gains 261 18 279
arising on
translation of
foreign
operations
Movement in 535 74 609
hedge
accounting
reserve
Payments on (27) (27)
share option
hedging
Net gains not 769 92 861
recognised in
the income
statement
Net 2 247 238 2 485
attributable
profit for the
year
Net 128 128
acquisition of
minority
interest
Contingency 57 (57)
reserve
created in
terms of the
Insurance Act
Release of (34) 34
distributable
reserves of
associates and
joint ventures
to retained
earnings
Realised gain 4 (4)
on the sale of
subsidiary
Issue of 761 39 39
500 ordinary
shares
Issue of 14 806 (802) 4
516 617
preferred
ordinary
shares
Purchase of (101) (101)
772 116
ordinary
shares
Capital (456) 43 (413)
distribution
of 220 cents
per ordinary
share in
October 2005
Capital (478) 45 (433)
distribution
of 230 cents
per ordinary
share in April
2006
Capital (39) 39
distribution
of 267,5 cents
per preferred
ordinary share
in September
2005
Capital (39) 39
distribution
of 267,5 cents
per preferred
ordinary share
in March 2006
Minority share (138) (138)
of dividends
Balance at 25 1 762 (2 497) 1 272 9 465 785 10 787
June 2006
Net gains 142 1 143
arising on
translation of
foreign
operations
Movement in (569) (77) (646)
hedge
accounting
reserve
Payments on (66) (66)
share option
hedging
Net losses not (493) (76) (569)
recognised in
the income
statement
Net 2 776 378 3 154
attributable
profit for the
year
Net 25 25
acquisition of
minority
interest
Contingency 47 (47)
reserve
created in
terms of the
Insurance Act
Transfer of 16 (16)
Imperial
Banks` credit
risk reserve
to statutory
reserve
Purchase of 2 (298) (298)
630 386
ordinary
shares
Deconsolidatio 715 361 482 1 558
n of Lereko
Mobility
Capital (511) 49 (462)
distribution
of 244 cents
per ordinary
share in
October 2006
Capital (336) 37 (299)
distribution
of 160 cents
per ordinary
share in April
2007
Dividend of (224) (224)
120 cents per
ordinary share
in April 2007
Capital (39) 39
distribution
of 267.5 cents
per preferred
ordinary share
in September
2006
Dividend of (39) (39)
267.5 cents
per preferred
ordinary share
in March 2007
Minority share (166) (166)
of dividends
Balance at 25 876 (1 955) 1 203 12 397 946 13 467
June 2007
Condensed cash flow statement
2007 2006
Rm Rm
For the years ended 25 June
Cash flows from operating activities
Cash generated by operations before changes in 6 786 5 889
working capital
Net working capital movements (775) (255)
Cash generated by operations 6 011 5 634
Net financing costs (1 026) (782)
Taxation paid (1 106) (597)
Net cash flows from operating activities 3 879 4 255
Cash flows from investing activities
Net acquisition of subsidiaries and businesses (462) (755)
Expansion capital expenditure (2 616) (2 662)
Net replacement capital expenditure (1 208) (1 104)
Investments, equities and loans (462) (321)
Net cash flows from investing activities (4 748) (4 842)
Cash flows from financing activities
Cash flow from financing activities 1 513 2 270
Dividends paid (429) (138)
Capital distribution (761) (846)
Net cash flows from financing activities 323 1 286
Net (decrease) increase in cash and cash (546) 699
equivalents
Cash and cash equivalents at beginning of year (1 643) (2 342)
Cash and cash equivalents at end of year (2 189) (1 643)
For detailed segmental information please refer to: www.imperial.co.za
Non-executive directors
L Boyd (Chairman), PL Erasmus, P Langeni, MJ Leeming, WG Lynch (Irish),
JR McAlpine, VJ Mokoena, PS Molefe, MV Moosa, CE Scott, M Sisulu,
RJA Sparks, A Tugendhaft, Y Waja
Executive directors
HR Brody (Chief Executive), OS Arbee, MP de Canha, RL Hiemstra, WS Hill,
N Hoosen, AH Mahomed, GW Riemann (German)
Company secretary
RA Venter
Business address and registered office
Imperial Place, Jeppe Quondam, 79 Boeing Road East, Bedfordview, 2007
Share transfer secretaries
Computershare Investor Services 2004 (Proprietary) Limited, 70 Marshall Street,
Johannesburg, 2001
Sponsor
Merrill Lynch SA (Pty) Limited, 138 West Street, Sandown, Sandton, 2196
Available on the Imperial Holdings website: www.imperial.co.za
Date: 29/08/2007 08:00:17 Produced by the JSE SENS Department.
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