| Tue 1 Dec 2009, 10:15 | | IPL / IPLP - Imperial - Update On Trading Environment |
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IPL IPLP
IPL
IPL / IPLP - Imperial - Update On Trading Environment
Imperial Holdings Limited
Registration number: 1946/021048/06
Ordinary share code: IPL & ISIN: ZAE000067211
Preference share code: IPLP & ISIN: ZAE000088076
("Imperial" or "the group")
UPDATE ON TRADING ENVIRONMENT
Imperial wishes to provide investors with an update on trading conditions in the
markets in which it operates and the impact thereof on the group for the first
five months of the financial year.
The most important markets in which the group operates are:
- Logistics in Southern Africa and Europe
- Car rental and tourism
- Motor vehicle importation, distribution and retailing
- Motor related and other financial services
Logistics Southern Africa
Trading conditions remained subdued with reduced volumes in most markets. The
seasonal pick-up ahead of the festive season which is currently being
experienced is slightly lower than previous periods, especially in higher value
items. Logistics for non-consumer items such as steel and other building
materials is still under pressure in Southern Africa, while container logistics
and freight forwarding are suffering from low trade volumes. Volumes transported
into other African countries are mixed.
Logistics Europe
Although conditions are still subdued compared to the corresponding period last
year, improved conditions are being experienced in Europe compared to the first
half of the calendar year. Inland waterway shipping volumes and port terminal
operations are growing steadily after a severe downturn which started
approximately 12 months ago. Contract logistics aligned to the motor vehicle
industry are good as the vehicle industry in Europe has benefitted from
government assistance. Results are further benefitting from cost savings which
were rapidly introduced when markets fell. Businesses acquired last year are
making a positive contribution and we have been able to extend a number of
important contracts.
Car Rental and Tourism
We are satisfied with the market response to our rebranding to Europcar and
although demand remains weak from international leisure and corporate travel, we
have improved total rental days satisfactorily. Used car sales in the division
have been satisfactory.
Our tourism business started the year slowly mainly due to lower inbound tour
volumes, however prospects for the division have improved. The coach touring
business has increased its fleet in anticipation of the FIFA World Cup, for
which good reservations have been received.
Motor retail, import and distribution
Both our vehicle retailing divisions have cut their cost bases in the previous
financial year and the impact of this is positive for profitability. New car
sales to the retail market have not recovered from the low levels of the second
half of our 2009 financial year. There has however been a good improvement in
fleet sales to car rental companies which contributed to market share gains in
our vehicle import business. Used car sales improved markedly in recent months,
which is proof of pressure on the affordability of new vehicles. A strong rand
is beneficial to our distribution business. In the vehicle dealerships division,
commercial vehicle sales have been lower than the comparative period and have
further reduced from levels in the first half of the calendar year.
The acquisition of 72% of Midas is effective from December 1st, 2009 and is
expected to make a meaningful contribution to our aftermarket parts distribution
business.
Insurance and banking
Gross premium income in the Regent group is still under pressure from low
vehicle sales, however underwriting results are satisfactory given the current
economic conditions. Investment results are significantly better due to good
equity markets relative to the comparative period.
Completion of the sale of our 49,9% interest in Imperial Bank is on track.
Payment is expected in four tranches over a period of six months following
regulatory approval.
Aviation business
Collection of the aviation assets of the discontinued operations is progressing
according to their contractual terms.
Credit rating
Moody`s Investors Service recently affirmed the group`s long term issuer rating
of Baa3 and changed its outlook to stable from negative. Furthermore Imperial`s
long term national scale issuer ratings and senior unsecured issuer ratings were
upgraded to A2.za from A3.za by Moody`s.
Imperial Capital`s national scale Domestic Medium Term Note programme long term
rating were upgraded to A1.za from A2.za and Imperial and Imperial Capital`s
short term national scale ratings of P-1.za were affirmed.
Company Secretary
RA Venter
By order of the Board
1 December 2009
BEDFORDVIEW
Sponsor to Imperial
Merrill Lynch South Africa (Pty) Limited
This announcement may contain certain forward looking statements which are
subject to factors which are outside the group`s control. Such forward looking
statements are based on the knowledge of the group at today`s date. Any
statement or information that could be considered as being forecasted financial
information has not been reviewed and reported on by the auditors of Imperial
either in accordance with ISAE 3400 or ISAE 3000 (Revised). Shareholders should
note that this is not a trading statement as contemplated in section 3.4 of the
JSE Listings Requirements.
Date: 01/12/2009 10:15:01 Produced by the JSE SENS Department.
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