| Wed 23 Feb 2011, 7:05 | | IPL / IPLP - Imperial Holdings Limited - Unaudited interim results for the six |
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IPL IPLP
IPL
IPL / IPLP - Imperial Holdings Limited - Unaudited interim results for the six
months ended 31 December 2010
IMPERIAL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1946/021048/06
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN: ZAE000088076
UNAUDITED INTERIM RESULTS for the six months ended 31 December 2010
HIGHLIGHTS
- HEPS up 44% to 725 cps
- Operating profit up 48% to R2 126 million
- Revenue 22% higher to R31 360 million
- An interim dividend of 220 cps
Overview of results
Imperial`s revenue increased by 22% as the group benefited from the recovery
in the domestic consumer market which boosted the automotive and Southern
African logistics businesses. The group`s new vehicle retail unit sales in
South Africa grew by 49,4% which is well in excess of the growth experienced
by the industry. The Logistics division increased its revenue by 16% as both
the Southern African and the European divisions performed well in their
respective markets.
The combined operating margin increased to 6,8% from 5,6% with the main
contributor being the Distributorships division which reached a margin of
8,2% on turnover growth of 48%. Automotive Retail grew its margin to 2,6% from
2,2%. Logistics slightly improved its margin to 6,1%, although it was lower
than the second half of last year, mainly due to the inclusion of the newly
acquired CIC Holdings Limited ("CIC") for the first time. The Car Rental and
Tourism division improved its margin slightly to 11,9% on revenue which was
15% higher in a still sluggish market. Premium income in the insurance division
was stable. The improved underwriting margin, largely due to a better claims
experience,
saw underwriting profits grow by 11,5%. Insurance investment income fell short
of the strong performance in the corresponding period due to a lower interest
rate environment and a conservatively managed equity portfolio. The acquisition
of Midas, which only contributed for one month in the previous period, returned
a healthy contribution to the results of the Distributorships division.
In aggregate, the group`s operating profit grew strongly by 48%, and Headline
Earnings per Share (HEPS) increased by 44%. Below the operating line, the most
significant variations from the corresponding previous period which impacted
on HEPS were the income from the Lereko BEE structure of R279m compared to R72m
in the prior period and a contribution from Imperial Bank of R151m in the prior
period which did not recur as a result of the sale of our shareholding in the
bank.
The interest charge reduced by 7,8% to R294m on lower interest rates and lower
borrowings following the receipt of the proceeds of the sale of Imperial Bank.
The increase in the minorities` share of profit is largely attributable to the
strong performance of the Distributorships division where a number of minority
shareholders participate.
The results of discontinued operations are no longer
disclosed separately as they are no longer material to the group`s results.
Balance sheet and cash flow
Net debt to equity (excluding preference shares) at 48% was slightly lower than
in December 2009 (50%), but higher than the 39% at June 2010. The final
installment on the sale of Imperial Bank of R477m was received during the
period and a net R930 million was spent on the acquisition of subsidiaries
and businesses of which CIC was the most significant. Net working capital
increased by R437m since end of June 2010, mainly due to higher trade
receivables resulting from the increased revenue. The current debt level
is still low against our target gearing range of 60% to 80% and leaves room
for further expansion of the group.
Shareholders` equity was impacted by the strengthening of the Rand and losses
on cash flow hedges which are accounted for through the statement of other
comprehensive income. In addition, the Imperial shares owned by Lereko are
now treated as treasury stock and this decreased equity by R665m.
The group raised R2 billion by the issue of a fixed rate 7 year corporate bond
for R1,5 billion (IPL6) and a five year floating rate bond for R500 million
(IPL5) in September 2010 at spreads of approximately 200 bps over the
appropriate risk free rates. The issues provided long-term liquidity and the
proceeds were used to settle IPL3 and IC01 amounting to R2 billion which
matured. The group`s liquidity position is strong with R5,1 billion in
unutilised facilities and only 13% of debt is due within one year. 43% of
the group`s debt is at a fixed interest rate.
Working capital and capital expenditure on rental assets were higher than in
the corresponding period. This was as a result of increased turnover and
resultant higher trade receivables as well as the delayed de-fleeting of car
rental vehicles in a sluggish used car market. The buoyant new car market has
negatively impacted on sales in the used car market, which has slowed down our
de-fleeting initiatives. Cash generated by operations after these items was
2,9% higher than in the prior period. After financing costs and taxation
payments, net cash flow from operations increased by 27%. Net expansion and
replacement capital expenditure was also higher than in the prior period, as
economic circumstances now warrant renewed expansion.
Taxation
The tax rate was below the statutory rate of 28% because of the revaluation
of the Lereko call option, and partly offset by the cost of secondary tax on
companies.
Associates
The significant decrease in income from associates mainly relates to the sale
of our shareholding in Imperial Bank. Imperial Bank contributed R151m in the
prior period. Our newly acquired associate, Mix Telematics, contributed R6m
and the contribution from smaller associates also improved from the prior year.
Renault had an excellent six months but its profits will only be recognised
once previous losses have been recouped.
Lereko
The third party debt in the Lereko BEE structure of R856m was settled on 1
October 2010 from the proceeds of forward sales of Imperial and Eqstra ordinary
shares during the 2010 financial year. The gain in the Imperial share price
from 30 June 2010 to 30 September 2010 resulted in a fair value gain of R279m,
which was credited to earnings. No further gains or losses in the value of
these shares will impact on the income statement, and the shares remaining
in the Lereko structure are now treated as treasury stock.
Vehicle sales
In South Africa, the group retailed 45 045 new and 28 228 used vehicles in
the half year, respectively, 49,4% and 5,7% more than the prior period. The
national vehicle market grew by 25,6% year on year. The strong increase in
Imperial`s sales largely occurred in the sale of fully built up imported
models by AMH, which was assisted by the variety of new models launched during
the period, the attraction of its model range and the stable currency. The
exceptional exposure which Hyundai and Kia enjoyed through their sponsorship
of the 2010 FIFA World Cup also contributed.
The group further sold 6 674 new vehicles to outside dealers as a distributor,
a 47% increase from last year. The Australian and United Kingdom operations
sold 4 406 new vehicles, which was level with the prior period and 1 891 used
vehicles, which was 15% higher.
Expansion of the group during the year
Acquisitions during the period consisted of:
- 100% of CIC, a distributor of fast moving consumer goods throughout Namibia,
Botswana, Swaziland, Mozambique and South Africa;
- 80% of EWC Express, which trades in the parcel and express delivery sector
of the logistics market;
- 100% of Danmar Autobody, a manufacturer approved panelbeater and vehicle
repair facility in the Johannesburg area;
- 100% of E-Z-GO South Africa, a distributor of the leading brand of golf carts;
- 60% of Graffiti Designs, a leading vehicle branding and digital print company;
and
- 60% of 777 Logistics, a fuel and chemicals bulk tanker business.
In the aggregate, acquisitions finalised over the past eighteen months will
have added approximately R7 billion of annual turnover to the group.
Business conditions in our markets
Trading conditions in the automotive retail market rebounded strongly in
2010. This recovery is from a very low base where vehicle sales in 2009 were
almost 50% down from its peak in 2006. Consumer demand is being stimulated
by historic low interest rates, an increased appetite by banks for vehicle
finance, and pent-up demand as motorists extended their vehicle replacement
cycles during the economic crisis. The growth in commercial vehicle sales
lagged the upturn in passenger vehicle sales, but sales in all segments
have reversed their negative trend since the fourth quarter of 2010. The
used car market is however not as buoyant as the new car market.
The consumer logistics market has been stronger than during the prior period and
represents approximately 55% of the revenue for the local logistics division.
Other sectors like construction and steel were still weak, although ahead of the
prior period.
The transport workers strike in South Africa commenced on the 13th February 2011
and a resolution between the Road Freight Employers Association (RFEA) and the
unions was reached on the 21st February 2011. The strike was disruptive to the
industry.
The German economy, where Imperial Logistics International is based, has
recovered remarkably from the financial crisis. A relatively weak Euro and
strong demand for German manufactured goods, particularly in the steel and
automotive sectors where the bulk of our customer base operate, contributed to
this.
The international and local leisure travel sector, in which our Car Rental and
Tourism division operates, is still suffering from low demand and oversupply of
capacity, some of which was created for the 2010 FIFA World Cup.
The recovery in vehicle sales which is underway is beneficial to our related
financial services products. Underwriting conditions are driven by many factors
which, on balance, benefited the underwriting margin in our insurance group.
Investment markets were also favourable with good gains in equities, albeit at
lower levels than in the prior period. Interest rates were also lower.
Divisional reports
Logistics
Southern African Logistics
Change %
R million 1H2011 1H2010 Change % on H2 2010 H2 2010
Revenue 6 502 5 114 27,1 25,2 5 194
Operating profit 436 367 18,8 10,1 396
Operating margin (%) 6,7 7,2 7,6
The division`s results show a significant increase to the comparative period.
The acquisition of CIC, which was effective from 1 November 2010 contributed to
the positive performance. CIC operates within the Fast Moving Consumer Goods
("FMCG") industry through distributor agreements with manufacturers, both
locally and internationally. Its service offering includes wholesaling,
merchandising, warehousing, distribution, debtors administration, staffing
and security solutions. CIC has facilities in the main centres throughout
Namibia, Botswana, Swaziland, Mozambique and South Africa, which enhances
the group`s physical network across Southern Africa significantly.
The operating margin was lower than the prior period mainly due to the
inclusion of CIC`s results for two months. Due to the nature of its operations,
CIC operates at lower margins than our current mix of businesses but is able
to generate superior returns.
The division is exposed to diverse industries and benefited as volumes improved
on the back of higher economic activity. Our Transport and Warehousing business,
which mainly services the manufacturing, mining, commodities and construction
industries, performed well, despite a difficult environment.
The Specialised Freight business produced good results as volumes grew in the
food and chemicals businesses and additional volumes were gained in the liquid,
petroleum and gas markets. New contract gains also contributed to the positive
performance.
The Consumer Logistics business continues to improve in a more positive
macro-economic climate. Manufacturing volumes were still depressed although a
fairly good peak in December 2010 was experienced. The division`s performance
was also enhanced by contract gains and the acquisition of 100% of CIC and 80%
of EWC Express, which trades in the parcel and express delivery sector of the
logistics market.
Integration Services yielded disappointing results. Erratic import and export
volumes have resulted in decreased profitability in our freight forwarding
business, Megafreight. However, this sub-division which includes Volition
and e-Logics continues to make a valuable contribution to the intellectual
capital of the group.
A new division, Imperial Logistics Africa, was established in the period by
combining the businesses which operate on the continent outside of South Africa
into one management and strategic structure. The objective of establishing this
division is to provide a sharper focus on the expansion of our footprint into
Africa. With the acquisition of CIC, and our extensive existing African
operations, we believe we have the ideal platform to build a significant
logistics business in Africa`s fast growing regions.
Gross capital expenditure of R558 million was incurred. The net investment in
the fleet is in line with the prior year.
International
Logistics
Change %
R million 1H2011 1H2010 Change % on H2 2010 H2 2010
Revenue 3 209 3 252 (1,3) 2,7 3 126
Operating profit 156 131 19,1 (6,6) 167
Operating margin (%) 4,9 4,0 5,3
Change %
EUR million 1H2011 1H2010 Change % on H2 2010 H2 2010
Revenue 339 292 16,1 8,7 312
Operating profit 16 12 33,3 (11,1) 18
Operating margin (%) 4,7 4,1 5,8
Imperial Logistics International achieved an outstanding result on the back
of a buoyant German economy, which has overcome the global economic crisis
better than most other European countries. The results in Euro terms are better
than reflected in the ZAR table due to the stronger Rand, with revenue up 16%
and operating profit 33% higher.
Revenue growth was experienced across all three business units, despite
continued depressed freight and handling rates. New contracts gained by
Gillhuber for in-plant logistics contributed to the increase in revenue.
Imperial Reederei, our inland waterway shipping business, benefited from near
record high transport volumes, especially in dry bulk goods. Two major steel
furnaces for which we perform shipping services operated at full capacity
whilst one was undergoing maintenance in the prior period.
Panopa, which provides parts distribution and in-plant logistics services to
automotive and steel manufacturers improved satisfactorily. Gillhuber`s new
business and a major turnaround in the automotive and steel industries in
Germany contributed positively. Our new parts logistics warehouse at Herten
Is now fully occupied and serves seven key customers.
The port operator, Neska, performed well due to increased volumes at container,
bulk and paper terminals. The good performance was achieved despite the
additional start up costs and weak demand at the newly completed KCT terminal.
The bulk food road transport business is also still under pressure.
Due to much improved economic conditions and a more positive outlook, capital
expenditure for the period was higher when compared to the prior period.
After the reporting period, an accident occurred on the Rhine River which
involved a sub-contractor of Imperial Reederei. This caused a disruption in the
movement of barges and ships during January and part of February in the upper
Rhine area but has not affected our shipping from Rotterdam to the Ruhr district
where our main industrial customers are situated. Apart from a slight reduction
in volumes, no financial impact on the group is expected.
Car Rental and
Tourism
Change %
R million 1H2011 1H2010 Change % on H2 2010 H2 2010
Revenue 1 667 1 444 15,4 11,4 1 497
Operating profit 198 169 17,2 (12,4) 226
Operating margin (%) 11,9 11,7 15,1
The division achieved very good year-on-year growth in revenue and operating
profit. Strong growth was experienced in the car rental business with revenue
days increasing by 12%. Utilisation decreased by 1% but revenue per day
increased by 3%. Volumes and rates of International and leisure business were
lower than the prior year.
Rental volumes and the coach touring business were impacted positively by the
2010 FIFA World Cup in the second half of the prior financial year.
The average rental fleet size was 14% up from last year, mainly due to higher
rental days and the delayed de-fleeting of vehicles in a flat used vehicle
market which was affected by strong new car sales. Retail unit sales at Auto
Pedigree, our used car dealer franchise, were however higher, despite the
sluggish used car market.
Danmar Autobody was acquired on 1 October 2010. The acquisition provides scale
and broadens the geographic footprint for our Panelshop business.
The global recession continues to impact negatively on all our touring
operations as international inbound volumes remain under pressure. The coach
charter businesses have benefited from the 2010 FIFA World Cup and much improved
domestic marketing initiative. Tourism revenue in the prior year was also
boosted by a major convention that took place during December 2009.
Distributorships
Change %
R million 1H2011 1H2010 Change % on H2 2010 H2 2010
Revenue 11 277 7 633 47,7 15,8 9 739
Operating profit 928 380 144,2 27,1 730
Operating margin (%) 8,2 5,0 7,5
Excluding our Australian operation, new vehicle registrations as reported to
NAAMSA by Associated Motor Holdings ("AMH") and Amalgamated Automobile
Distributors ("AAD") were 46% up compared to a market increase of 25,6%. The
successful launch of new models, increased sales to car rental companies and
the improvement in the new vehicle market in the past six months all
contributed to the exceptional growth in revenue and operating profit. The
timely arrival of new models especially in the entry level segment, allowed us
to strengthen our position in the market.
The improved margin is as a result of the substantial increase in sales volumes,
network throughput, effective cost control and a stable currency.
Liquid Capital, which provides financial services related to the vehicle
industry is expanding its base to external markets and is performing well.
The Goscor Group, whose primary business involves importation, distribution
and rental of cleaning equipment, forklifts and power products performed
exceptionally well and traded ahead of expectation. The Lift Truck business
in particular showed exceptional growth and continues to maintain a strong
order book.
Graffiti, the newly acquired vehicle branding and print media company also
performed well. This was driven by new contract wins, the 2010 FIFA World Cup
and increased capacity in the business.
During the period, AMH acquired E-Z-GO South Africa, a distributor of the
leading brand of golf carts. E-Z-GO also provides fleet management solutions,
after-sales service and spare parts for its product range. The need for its
products by industrial users, especially in the healthcare and hospitality
industries offers good growth potential. The business is complementary in
terms of our existing skills set in distribution and warehousing.
In the Auto Parts division, which specialises in the supply of after-market
spare parts and accessories, the Midas acquisition contributed for the full
six month period against one month in the comparative period. Midas made a
meaningful contribution to the results of the division. The business continues
to perform well and has positioned Imperial as the leader in this market
segment. It creates a base to enter adjacent parts and component markets.
Earnings from the general aviation business, NAC, declined as aircraft sales
came under pressure, both from lower demand and a lack of availability of bank
funding for this asset class.
New retail unit sales in the Australian dealerships were down while used
vehicle sales improved. The business remains profitable but refurbishments
and lack of new product impacted negatively on performance. Renault continues
performing very well and has experienced a marked improvement in sales volumes
as a result of new product launches.
Automotive Retail
Change %
R million 1H2011 1H2010 Change % on H2 2010 H2 2010
Revenue 8 522 7 714 10,5 8,9 7 829
Operating profit 219 169 29,6 20,3 182
Operating margin (%) 2,6 2,2 2,3
The Automotive Retail division`s results have improved significantly over
the prior year. The division`s new unit sales in passenger cars were 28% up,
which was in line with market growth in this segment of the vehicle market.
The commercial vehicle market has shown a slow but steady improvement in the
period. Used vehicle sales volumes have remained consistent despite the change
in buying patterns towards entry level new vehicles. The operating margin
improved strongly to 2,6% from 2,2% in the comparative period and from 2,3%
in the second half of the previous financial year. Margins also benefited
from strict cost control.
Current trends indicate that passenger and light commercial vehicle volumes
will continue to improve. The total market has improved by 25% for the 2010
calendar year with passenger cars 31% up. The commercial vehicle market has
started to grow off a low base.
The UK truck dealerships have settled down following the rationalisation and
cost reductions in the prior financial year. The business turned in a result
ahead of expectations despite a market which remained depressed.
Beekmans Canopies` sales were marginally up on last year and the focus is to
improve sales through existing channels. Sales volumes in Jurgens Caravans
improved markedly and the joint strategy of Beekmans and Jurgens to improve
volumes and utilise group strengths are beginning to pay off.
Regent group
Change %
R million 1H2011 1H2010 Change % on H2 2010 H2 2010
Revenue 1 354 1 349 0,4 0,7 1 345
Investment income* 143 165 (13,3) 30,0 110
Underwriting result 107 96 11,5 (12,3) 122
Operating profit 250 261 (4,2) 7,8 232
Net underwriting
margin (%) 7,9 7,1 9,1
Note: Investment income and underwriting income have been adjusted by the
inclusion in underwriting income of policy holder benefits attributable to
investment linked policies in the amount of R42 million (2009: R38 million).
The marginal decline in operating profit compared to the prior year is primarily
due to the lower investment income of R143 million compared to the R165 million
in the prior year. This reflects the lower interest rate environment and good
gains in equity markets albeit lower than the prior year. Equities represented
approximately 25% of the investment portfolio over the period and continue to
be managed in a conservative manner.
Gross written premium increased marginally for the period under review. The
short-term business experienced tough trading conditions in most classes of
business while the life business was negatively impacted by the Public Servants
strike. These factors curtailed revenue growth which was lower than anticipated.
However, an improved claims experience more than offset the lower revenue
resulting in a 11,5% increase in the underwriting result.
The underwriting margin has improved when compared to the same period of the
previous financial year. This reflects the improved loss ratio in both the
life and short-term businesses, largely due to an improved claims experience.
We anticipate continued growth in gross written premiums in the second half
of the financial year, particularly in the life business as the effects of the
Public Servants strike slowly diminish.
Skills development and Corporate Social Investment
Imperial strongly supports the Government`s emphasis on skills formation in
the economy and continues with substantial investment in the development of our
people at all levels.
Almost, 500 trainees are enrolled at the group`s Cape Town and Germiston based
Technical Training Academies in order to become skilled artisans.
Sixty senior executives participated in a leadership development programme of
the Gordon Institute of Business Science which was customised for Imperial`s
diversified and decentralised business model with its need for entrepreneurial
and innovative leaders. The programme is continuing and more leaders in the
group will participate in it.
A future talent pipeline is being nurtured through a graduate development
programme which currently provides 76 university graduates with hands-on
workplace experience and mentorship in the insights and knowledge of the
Imperial culture.
The Imperial and Ukhamba Community Development Trust, continues to promote
effective learning and teaching at seven under privileged schools serving 7 500
learners in Gauteng.
Ordinary dividend
An interim ordinary dividend of 220 cents per share (2009: 150 cents per share)
has been declared.
Strategic intentions
The group`s strategy remains to focus on its three core pillars, namely
Logistics, Vehicle Rental and Tourism and Vehicle Distribution, Retail and
ancillary Financial Services. The group`s strong capital position will support
the expansion of our Southern African logistics business into the African
continent and further growth and diversification of our domestic and
international logistics businesses. Our objective of optimizing the synergies
in our vehicle operations will lead to selected acquisitions and greenfield
investments in vehicle-related activities. In the tourism division, we will
focus on seeking further asset light service businesses which match our skills
base and can add value to our existing car rental and coach touring businesses.
Prospects
Improving consumer demand will have a positive impact on the performance in our
Southern African logistics unit, although strike action and a weaker than
expected start during January 2011 will dampen performance in the second half.
The acquisition of CIC provides an ideal platform to take advantage of the
growth opportunities in the rest of Africa.
In Europe, prospects remain good for the rest of the financial year, as trade
volumes remain robust and show no signs of slowing down, especially in the
markets we serve.
The growth in our Car Rental and Tourism business will be tempered by the higher
base set by the 2010 FIFA World Cup in the past financial year. An abnormally
high car rental fleet will also impact on the performance in the second half as
we continue to de-fleet in a used car market which is expected to remain soft
for the remainder of the financial year. Forward bookings in our tourism
business look more positive and having been responsible for the logistics around
recent major events, the company is ideally positioned to take advantage of
future conferences and sporting events hosted in South Africa.
We expect our combined motor retailing businesses to benefit from the continued
recovery in the new vehicle market. We do, however, expect the rate of growth in
new vehicle sales to reduce as the base increases. Used vehicle demand is
expected to remain flat as the gap between the cost of a new and used cars
continues to narrow. Our annuity-based income from the industry, including part
sales, vehicle servicing and related financial services income continue to grow.
The replacement vehicle parts business should make a good contribution to
profits for the 2011 financial year because Midas will be accounted for a full
year and the vehicle parts business remains buoyant due to an ageing car park.
Goscor which distributes industrial equipment is performing well and will also
contribute for a full year.
A sound overall insurance underwriting result is expected from the short-term
insurance business. The Regent group continues to make progress in improving its
distribution channels and penetrating new niche markets. The investment
portfolio will continue to be prudently managed.
Our balance sheet remains strong despite significant organic and acquisitive
growth during the period under review. We are therefore well positioned to take
advantage of attractive acquisition opportunities as they arise.
Overall, we expect our businesses to continue benefiting from the momentum
experienced in most of the markets in which we operate.
By order of the board
TS Gcabashe, Chairman
HR Brody, Chief Executive
AH Mahomed, Financial Director
Declaration of Dividends for the Interim period ended 31 December 2010
Preference shareholders and Ordinary shareholders
Notice is hereby given that:
- a preference dividend of 361,233 cents per preference share has been declared
payable to holders of non-redeemable, non-participating preference shares; and
- an interim dividend in an amount of 220 cents per ordinary share has been
declared payable to ordinary shareholders.
The company has determined the following salient dates for the payment of the
preference dividend and ordinary dividend:
2011
Last day for preference shares and ordinary
shares, respectively, to trade cum preference
dividend and cum ordinary dividend Thursday, 17 March
Preference and ordinary shares commence
trading ex- preference dividend and ex ordinary
dividend, respectively Friday, 18 March
Record date Friday, 25 March
Payment date Monday, 28 March
Share certificates may not be dematerialised/rematerialised between Friday, 18
March 2011 and Friday, 25 March 2011, both days inclusive.
On Monday, 28 March 2011, 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 28 March 2011 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, 28 March 2011.
On behalf of the board
RA Venter
Group Company Secretary
23 February 2011
CONDENSED CONSOLIDATED INCOME STATEMENT
Represented
Represented Audited
Unaudited Unaudited 12 months
for the six months ended Dec 10 Dec 09 % Jun 10
Rm Rm Change Rm
Revenue 31 360 25 683 22 53 438
Net operating expenses (28 497) (23 564) (48 771)
Profit from operations
before depreciation
and recoupments 2 863 2 119 4 667
Depreciation,amortisation,
impairments and recoupments (737) (678) (1 379)
Operating profit 2 126 1 441 48 3 288
Recoupments from sale of
properties, net of impairments 26 38 51
Foreign exchange (losses) gains(24) (1) 49
Fair value losses on
foreign exchange derivatives (16) (5) (38)
Impairment reversals of
share scheme loans 24 24
Gain on early settlement of
European bond 27 27
Fair value gain on Lereko
call option 279 72 78
Exceptional items (19) 10 58
Profit before net
financing costs 2 372 1 606 48 3 537
Net finance cost
including fair value
gains and losses (294) (319) (597)
Income from associates
and joint ventures 19 152 174
Profit before taxation 2 097 1 439 46 3 114
Income tax expense (555) (345) (911)
Profit from operations 1 542 1 094 2 203
Discontinued operations 12 59
- Trading (loss) profit
from operations (5) 29
- Fair value profit on
discontinuation 17 30
Net profit for the period 1 542 1 106 2 262
Net profit attributable to:
Equity holders of
Imperial Holdings Limited 1 379 1 012 2 021
Non-controlling interest 163 94 241
1 542 1 106 2 262
CONDENSED STATEMENT OF OTHER COMPREHENSIVE INCOME
Represented
Represented Audited
Unaudited Unaudited 12 months
for the six months ended Dec 10 Dec 09 Jun 10
Rm Rm Rm
Net profit for the period 1 542 1 106 2 262
Exchange losses arising on
translation of foreign operations (148) (45) (184)
Movement on hedge accounting reserves (305) 50 22
Fair value gains on available for sale
financial assets 9 15
Share of other comprehensive income
of associates and joint ventures (5) (37)
Fair value gain on Lereko call option 244 244
Income tax relating to components of
other comprehensive income (1) (1) 1
Total comprehensive income 1 083 1 363 2 323
Total comprehensive income
attributable to:
Equity holders of Imperial Holdings
Limited 957 1 261 2 085
Non-controlling interest 126 102 238
1 083 1 363 2 323
Represented Audited
Unaudited Unaudited 12 months
Earnings per share Dec 10 Dec 09 % Jun 10
Information Rm Rm Change Rm
Headline earnings
reconciliation
Attributable profit 1 379 1 012 2 021
Attributable to preferred
ordinary shareholders (39) (78)
Attributable to ordinary
shareholders 1 379 973 1 943
Profit on sale of property,
plant and equipment (44) (46) (98)
Impairment of assets 2 6 39
Exceptional items 19 (27) (88)
Exceptional items -
included in income from
associates and joint ventures 11 4
Taxation 12 19 31
Non-controlling interests 10
Headline earnings - basic 1 368 936 1 841
Attributable to preferred
ordinary shareholders 39 78
Headline earnings - diluted 1 368 975 1 919
Earnings per share (cents)
- Basic 731 523 40 1 047
- Diluted 695 497 40 991
Headline earnings per
share (cents)
- Basic 725 503 44 992
- Diluted 690 479 44 941
Preferred ordinary shares
cents)
- Basic 268 535
ADDITIONAL INFORMATION
Net asset value per share
(cents) 5 557 5 289 5 5 529
Number of ordinary shares
(million)
- in issue 196.6 189.2 187.0
- weighted average 188.6 185.9 185.7
- weighted average for
diluted earnings 198.4 203.7 204.0
Number of other shares in
issue (million)
- Preferred ordinary 14.5 14.5
- Deferred ordinary 15.0 15.9 15.9
Dividends per ordinary
share (cents) 220 150 47 350
Net finance cost Rm Rm Rm
Net interest paid 303 340 633
Foreign exchange gain on
monetary items (97) (37) (222)
Fair value loss on
interest-rate swaps 88 16 186
Net finance cost 294 319 597
Net finance cost -
discontinued operations 14 25
Exceptional items Rm Rm Rm
Impairment of goodwill (18) (8) (108)
Profit on sale of
Imperial Bank Limited 131
Recognition of deferred
profit on sale of
Dawn Limited 22 22
Net (loss) profit on
disposal and
rationalisation
of investments in
subsidiaries, associates
and joint ventures (1) (4) 13
(19) 10 58
Fair value profit on
Aviation disposal group -
discontinued operations 17 30
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
At 31 December Dec 10 Dec 09 Jun 10
Rm Rm Rm
ASSETS
Intangible assets 1 741 1 069 1 006
Investments in associates and joint
ventures 787 2 876 1 190
Property, plant and equipment 6 357 5 946 5 983
Transport fleet 3 626 3 557 3 399
Vehicles for hire 2 558 1 809 2 237
Deferred tax assets 686 644 658
Other investments and loans 2 539 1 392 2 021
Other non-current financial assets 239 231 206
Inventories 6 725 5 614 6 809
Taxation in advance 60 110 126
Trade and other receivables 7 446 6 437 6 165
Cash resources 1 985 2 786 3 199
Assets classified as held for sale 816 747
Final instalment on sale of
Imperial Bank Limited 477
Total assets 34 749 33 287 34 223
EQUITY AND LIABILITIES
Capital and reserves
Share capital 9 10 10
Shares repurchased (220) (1 816) (1 816)
Other reserves (51) 527 433
Retained earnings 11 188 12 052 12 513
Attributable to Imperial Holdings`
shareholders 10 926 10 773 11 140
Non-controlling interests 882 709 806
Total shareholders` equity 11 808 11 482 11 946
Liabilities
Non-redeemable, non-participating
preference shares 441 441 441
Retirement benefit obligations 209 249 222
Interest-bearing borrowings 7 696 8 559 7 833
Insurance and investment contracts 1 096 1 272 1 093
Deferred tax liabilities 624 676 656
Other non-current financial liabilities 380 134 312
Trade and other payables and provisions 11 883 9 594 11 123
Current tax liabilities 612 419 335
Liabilities directly associated with assets
classified as held for sale 461 262
Total liabilities 22 941 21 805 22 277
Total equity and liabilities 34 749 33 287 34 223
Capital commitments 525 503 882
Contingent liabilities 49 171 201
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Audited
Unaudited Unaudited 12 months
for the six months ended Dec 10 Dec 09 % Jun 10
Rm Rm change Rm
Cash flows from
operating activities
Cash generated by operations
before movements in
working capital 2 820 2 039 4 498
Net working capital movements (704) (161) 255
Cash generated by operations
before capital expenditure on
rental assets 2 116 1 878 13 4 753
Expansion capital expenditure
- rental assets (207) (120) (521)
Net replacement capital
expenditure
- rental assets (321) (215) (367)
- Expenditure (1 283) (918) (1 489)
- Proceeds 962 703 1 122
Cash generated by operations 1 588 1 543 3 865
Net financing costs (303) (354) (658)
Taxation paid (241) (369) (1 075)
1 044 820 2 132
Cash flows from investing
activities
Net acquisition of subsidiaries
and businesses (930) (314) (415)
Expansion capital expenditure
- excluding rental assets (342) (200) (442)
Net replacement capital
expenditure
- excluding rental assets (372) (296) (463)
Proceeds from the sale of
Imperial Bank Limited 477 1 374
Net movement in other
associates and joint ventures 50 (89) (271)
Net movement in investments,
loans and other non-current
financial instruments (195) (206) (778)
(1 312) (1 105) (995)
Cash flows from financing
activities
Hedge cost premium paid (160) (4) (5)
Purchase of ordinary shares
for hedging of share scheme (200)
Cost incurred on cancellation
of shares repurchased (8)
Dividends paid (494) (303) (653)
Net decrease in
interest-bearing borrowings (273) (1 227) (697)
Change in non-controlling
interest 19 (24) (29)
(916) (1 558) (1 584)
Net decrease in cash resources (1 184) (1 843) (447)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Shares Other Retained
capital repurchased reserves earnings
for the six months ended Rm Rm Rm Rm
Balance at 30 June 2009 - Audited 10 (1 816) 280 11 300
Total comprehensive income 249 1 012
Transfer of reserves on
disposal of assets 5 (5)
Statutory reserves 2 (2)
Share-based equity reserve
utilisation (63)
Share-based equity reserve
charged to the income statement 74
Dividends paid (253)
Non-controlling interest
arising on business
combinations net of disposals
Net decrease in
non-controlling interest (20)
Non-controlling interest
share of dividends
Balance at 31 December 2009
- Unaudited 10 (1 816) 527 12 052
Total comprehensive income (185) 1 009
Transfer of reserves on
disposal of assets (5) 5
Statutory reserves 36 (36)
Share-based equity reserve
utilisation 6
Share-based equity reserve
charged to the income statement 60
Dividends paid (317)
Purchase and cancellation of
2 123 775 ordinary shares (200)
Non-controlling interest
arising on business
combinations net of disposals
Net increase in
non-controlling interest (6)
Non-controlling interest
share of dividends
Balance at 30 June 2010 -
Audited 10 (1 816) 433 12 513
Total comprehensive income (422) 1 379
Share-based equity reserve
transferred to retained
earnings on vesting 29 (29)
Share-based equity reserve
utilisation including
hedging cost (157)
Share-based equity reserve
charged to the income statement 62
Dividends paid (407)
Reclassification of Imperial
shares held by Lereko to
shares repurchased (665)
Purchase and cancellation of
16 000 000 ordinary shares (1) 2 000 (2 007)
Reserve reallocation 261 (261)
Non-controlling interest
arising on business
combinations net of disposals
Net increase in
non-controlling interest 4
Non-controlling interest
share of dividends
Balance at 31 December 2010
- Unaudited 9 (220) (51) 11 188
Non-
controlling
Total interest Total equity
for the six months ended Rm Rm Rm
Balance at 30 June 2009 - Audited 9 774 587 10 361
Total comprehensive income 1 261 102 1 363
Transfer of reserves on disposal
of assets
Statutory reserves
Share-based equity reserve utilisation (63) (63)
Share-based equity reserve charged to
the income statement 74 74
Dividends paid (253) (253)
Non-controlling interest arising on
business combinations net of disposals 74 74
Net decrease in non-controlling interest (20) (4) (24)
Non-controlling interest share of
dividends (50) (50)
Balance at 31 December 2009
- Unaudited 10 773 709 11 482
Total comprehensive income 824 136 960
Transfer of reserves on disposal of assets
Statutory reserves
Share-based equity reserve utilisation 6 6
Share-based equity reserve charged to
the income statement 60 (2) 58
Dividends paid (317) (317)
Purchase and cancellation of 2 123 775
ordinary shares (200) (200)
Non-controlling interest arising on
business combinations net of disposals (5) (5)
Net increase in non-controlling
interest (6) 1 (5)
Non-controlling interest share of
dividends (33) (33)
Balance at 30 June 2010 - Audited 11 140 806 11 946
Total comprehensive income 957 126 1 083
Share-based equity reserve transferred
to retained earnings on vesting
Share-based equity reserve utilisation
including hedging cost (157) (157)
Share-based equity reserve charged to
the income statement 62 1 63
Dividends paid (407) (407)
Reclassification of Imperial shares
held by Lereko to shares repurchased (665) (665)
Purchase and cancellation of 16 000
000 ordinary shares (8) (8)
Reserve reallocation
Non-controlling interest arising on
business combinations net of disposals 21 21
Net increase in non-controlling interest 4 15 19
Non-controlling interest share of dividends (87) (87)
Balance at 31 December 2010 - Unaudited10 926 882 11 808
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of preparation
The condensed consolidated financial statements have been prepared in accordance
with the recognition and measurement criteria of International Financial
Reporting Standards (IFRS) and its interpretations adopted by the International
Accounting Standards Board (IASB) in issue and effective for the Group at 31
December 2010 and the AC 500 standards issued by the Accounting Practices Board
or its successor. The results are presented in terms of IAS 34 - Interim
Financial Reporting, and comply with the Listings Requirements of the JSE
Limited. These financial statements do not include all the information required
for full annual financial statements and should be read in conjunction with the
consolidated financial statements as at and for the year ended 30 June 2010.
These condensed consolidated financial statements have not been reviewed or
audited by the Group`s auditors and were approved by the board of directors on
22 February 2011.
Accounting policies
The accounting policies adopted and methods of computation used in the
preparation of the condensed consolidated financial statements are in terms of
IFRS and are consistent with those of the annual financial statements for the
year ended 30 June 2010, except for the adoption of new or revised accounting
standards and interpretations as outlined below.
New accounting standards
The Group adopted accounting standards and interpretations that became
applicable during the current reporting period.
None of these have had a significant impact on the Group`s accounting policies
and methods of computation.
Consolidation of Lereko Mobility (Pty) Limited
The preferred ordinary shares in Imperial Holdings Limited and Eqstra Holdings
Limited held by Lereko Mobility converted into ordinary shares on 30 September
2010. A portion of these shares were sold on the open market and the proceeds
were used to settle Lereko Mobility`s funding obligations to third parties. It
is likely that the remaining shares will be delivered to Imperial Holdings
Limited and Eqstra Holdings Limited to settle Lereko Mobility`s vendor funding
obligations to Imperial Holdings Limited and Eqstra Holdings Limited
respectively. As it is likely that the remaining Imperial Holdings Limited
shares will revert back to Imperial, these shares are treated as shares
repurchased.
Ordinary shares cancelled
Imperial Corporate Services (Pty) Limited, a wholly owned subsidiary of Imperial
Holdings Limited, held 23 864 456 shares as treasury shares. Sixteen million of
these shares were sold to Imperial Holdings Limited and subsequently cancelled.
As an intra-group transaction this had no significant financial effect on the
Group`s results, financial position or cash flows other than transaction costs
that are normally incurred in transactions of this nature.
Discontinued operations
Discontinued operations are now immaterial to the Group. Their results are now
included in continuing operations in the income statement and under head office
and eliminations on the segment report and this impact is insignificant.
Representation of income statement and statement of other comprehensive income
In the prior reporting period a combined statement of comprehensive income was
reported. This has now been represented into a separate income statement and a
statement of other comprehensive income.
Subsequent events
There were no material events that require disclosure that has occurred
subsequent to the balance sheet date.
Operational segmental reporting
For management purposes, the Group is organised into five major operating
divisions - logistics, car rental and tourism, distributorships, automotive
retail and insurance. These divisions are the basis on which the Group reports
its primary segment information. The principal services and products of each
of these divisions are as follows:
Logistics - provides complete logistics solutions including transportation,
warehousing, inland waterway shipping, container handling and related
value-added services.
Car rental and tourism - vehicle rental operations span the domestic corporate
and leisure sectors as well as inbound tourists, with extensive support
services. Tourism operations include inbound tour operations and niche tourism
services.
Distributorships - this segment imports and distributes a range of passenger,
commercial vehicles, automotive products, industrial equipment, motorcycles and
light aircraft.
Automotive retail - consists of a large network of motor vehicle and commercial
vehicle dealerships in South Africa representing most of the major original
equipment manufacturers (OEM`s). It also manufactures and sells caravans and
canopies.
Insurance - the insurance operations are focused on a range of short-,
medium- and long-term insurance and assurance products that are predominantly
associated with the automotive market.
BUSINESS COMBINATIONS
Nature of Operational Date
Subsidiaries and business segment acquired
businesses
acquired
CIC Holdings FMCG industry Logistics November 2010
Limited
E-Z-GO South Golf carts distribution Distributorships September 2010
Africa
EWC Express SA Express logistics Logistics October 2010
(Pty) Ltd
Danmar Autobody Panelshops Car rental October 2010
Graffiti Designs Signage and advertising Distributorships July 2010
(Pty) Ltd
Individually
immaterial
business
combinations
Total
Purchase
Interest consideration
acquired transferred
Subsidiaries and (%) (Rm)
businesses
acquired
CIC Holdings 100 724
Limited
E-Z-GO Golf 100 101
carts
EWC Express SA 80 44
(Pty) Ltd
Danmar Autobody 100 92
Graffiti Designs 60 41
(Pty) Ltd
Individually 86
immaterial
business
combinations
Total 1 088
Reasons for the acquisitions
CIC Holdings Limited, a previously JSE Limited listed entity, was acquired to
expand our logistics business into the rest of Africa.
E-Z-GO South Africa was acquired to expand our distribution business.
EWC Express was acquired as a strategic entry into the parcel and express
logistics market.
Danmar Autobody was acquired to increase market share in the panelshops
industry.
Graffiti Designs was acquired to enter into the vehicle signage business.
EWC
CIC Holdings Express SA
Total Limited E-Z-GO (Pty) Ltd
Golf carts
Fair value of assets Rm Rm Rm Rm
acquired and liabilities
assumed at date of
acquisition:
Assets
Intangible assets 77 71
Investments, loans, 36 29
associates and joint
ventures
Property, plant and 114 38 1 2
equipment
Transport fleet 160 15
Vehicles for hire 37 30
Deferred tax assets 15
Inventories 216 183 17
Trade and other receivables 499 313 1 31
Cash resources 91 80 4
1 245 714 49 52
Liabilities
Deferred tax liabilities (16) (5) (1)
Interest-bearing borrowings (239) (58) (24)
Other non-current financial (1)
liabilities
Due to group companies (11) 16
Trade and other payables (582) (414) (3) (24)
and provisions
Current taxation 4 5
(845) (456) (3) (49)
Acquirees` carrying amount 400 258 46 3
at acquisition
Less: Non-controlling (21) (6) (1)
interest
Net assets acquired 379 252 46 2
Purchase consideration 1 088 724 101 44
transferred
- Cash 1 021 724 101 24
- Contingent consideration 67 20
Excess of purchase price 709 472 55 42
over net assets acquired
(intangibles)
Graffiti Individually
Danmar Designs immaterial
Autobody (Pty) Ltd acquisitions
Fair value of assets Rm Rm Rm
acquired and liabilities
assumed at date of
acquisition:
Assets
Intangible assets 6
Investments, loans, 7
associates and joint
ventures
Property, plant and 56 4 13
equipment
Transport fleet 145
Vehicles for hire 7
Deferred tax assets 15
Inventories 2 1 13
Trade and other receivables 18 136
Cash resources 1 6
58 24 348
Liabilities
Deferred tax liabilities (10)
Interest-bearing borrowings (5) (152)
Other non-current financial (1)
liabilities
Due to group companies 7 (34)
Trade and other payables (4) (10) (127)
and provisions
Current taxation (1)
(4) (8) (325)
Acquirees` carrying amount 54 16 23
at acquisition
Less: Non-controlling (7) (7)
interest
Net assets acquired 54 9 16
Purchase consideration 92 41 86
transferred
- Cash 92 41 39
- Contingent consideration 47
Excess of purchase price 38 32 70
over net assets acquired
(intangibles)
The value of the intangible assets arising on acquisition is provisional. Work
is still being done to analyse and split the intangible assets into their
component parts between goodwill and other intangible assets.
Details of contingent consideration
The contingent consideration requires the Group to pay the vendors an additional
total amount of R67 million over three years if the entities` net profit after
tax exceeds certain earnings targets. Acquisition-related cost amounting to R11
million have been excluded from the purchase consideration and have been
recognised as an expense in the period, within `Net operating expenses` in the
income statement.
Impact of the acquisitions on the results of the Group
From the dates of acquisition,
the acquired businesses
contributed:
Revenue 892 545 18 53 33 53 190
Attributable profit 32 15 5 4 (5) 6 7
Had all the acquisitions been
consolidated from 1 July 2010
the income statement would
have included:
Revenue 1 918 1 429 26 96 89 53 225
Attributable profit 56 29 8 4 (3) 6 12
The trade and other receivables acquired had gross contractual amounts of R509
million of which R10 million was doubtful. None of the goodwill is expected to
be deductible for tax purposes. Non-controlling interest has been calculated
based on their proportionate share in net assets.
SEGMENT INFORMATION - Financial position
Group Group Logistics Logistics
at 31 December 2010 2009 2010 2009
Rm Rm Rm Rm
BUSINESS SEGMENTATION
Assets
Intangible assets 1 741 1 069 1 144 619
Investments, loans, associates
and joint ventures 2 702 3 830 116 165
Property, plant and equipment 6 357 5 946 1 740 1 757
Transport fleet 3 626 3 557 3 680 3 621
Vehicles for hire 2 558 1 809
Other non-current financial
assets 239 231
Inventories 6 725 5 614 309 100
Trade and other receivables 7 446 6 437 4 327 3 682
Cash in financial services
businesses 1 132 1 655
Operating assets 32 526 30 148 11 316 9 944
Deferred tax assets 686 644
Loans to associates and other
investments 624 438
Taxation in advance 60 110
Cash and cash equivalents 853 1 131
Assets classified as held for sale 816
Total assets per statement of
financial position 34 749 33 287
Liabilities
Retirement benefit obligations 209 249 209 249
Insurance and investment
contracts 1 096 1 272
Trade and other payables and
provisions 11 883 9 594 4 078 3 370
Other non-current financial
liabilities 380 134 32 22
Non-interest-bearing liabilities 13 568 11 249 4 319 3 641
Non-redeemable,
non-participating preference shares 441 441
Interest-bearing borrowings 7 696 8 559
Deferred tax liabilities 624 676
Current tax liabilities 612 419
Liabilities directly associated
with assets classified as
held for sale 461
Total liabilities per statement
of financial position 22 941 21 805
GEOGRAPHIC SEGMENTATION
Operating assets 32 526 30 148 11 316 9 944
- South Africa 27 159 25 176 7 825 6 654
- Rest of Africa 1 479 757 973 319
- Rest of world 3 888 4 215 2 518 2 971
Non-interest-bearing liabilities 13 568 11 249 4 319 3 641
- South Africa 11 357 9 398 2 758 2 420
- Rest of Africa 724 287 493 58
- Rest of world 1 487 1 564 1 068 1 163
Interest-bearing borrowings 7 696 8 559 2 973 3 081
- South Africa 4 732 5 151 2 304 2 217
- Rest of Africa 278 262 172 167
- Rest of world 2 686 3 146 497 697
Gross capital expenditure 2 467 1 692 693 565
- South Africa 2 261 1 503 528 401
- Rest of Africa 33 106 30 92
- Rest of world 173 83 135 72
Gross capital expenditure 2 467 1 692 693 565
Less: Proceeds on disposal (1 225) (806) (202) (186)
Net capital expenditure 1 242 886 491 379
Car Rental Car Rental
and and Distributor- Distributor-
Tourism Tourism ships ships
at 31 December 2010 2009 2010 2009
Rm Rm Rm Rm
BUSINESS SEGMENTATION
Assets
Intangible assets 68 35 377 241
Investments, loans, associates
and joint ventures 6 5 131 191
Property, plant and equipment 422 243 2 188 2 010
Transport fleet
Vehicles for hire 2 239 1 624 351 186
Other non-current financial
assets 8
Inventories 360 231 4 358 3 663
Trade and other receivables 371 177 1 623 1 483
Cash in financial services
businesses
Operating assets 3 466 2 315 9 028 7 782
Deferred tax assets
Loans to associates and other
investments
Taxation in advance
Cash and cash equivalents
Assets classified as held
for sale
Total assets per statement
of financial position
Liabilities
Retirement benefit obligations
Insurance and investment
contracts
Trade and other payables and
provisions 475 422 4 132 3 122
Other non-current financial
liabilities 1
Non-interest-bearing liabilities 476 422 4 132 3 122
Non-redeemable, non-participating
preference shares
Interest-bearing borrowings
Deferred tax liabilities
Current tax liabilities
Liabilities directly associated
with assets
classified as held for sale
Total liabilities per statement
of financial position
GEOGRAPHIC SEGMENTATION
Operating assets 3 466 2 315 9 028 7 782
- South Africa 3 411 2 278 8 173 7 117
- Rest of Africa 55 37 79 50
- Rest of world 776 615
Non-interest-bearing liabilities 476 422 4 132 3 122
- South Africa 462 405 3 957 2 974
- Rest of Africa 14 17 54 30
- Rest of world 121 118
Interest-bearing borrowings 1 843 839 1 903 1 875
- South Africa 1 843 839 1 300 1 424
- Rest of Africa 106 95
- Rest of world 497 356
Gross capital expenditure 1 264 874 438 153
- South Africa 1 262 861 417 145
- Rest of Africa 2 13
- Rest of world 21 8
Gross capital expenditure 1 264 874 438 153
Less: Proceeds on disposal (635) (422) (326) (103)
Net capital expenditure 629 452 112 50
Automotive Automotive
Retail Retail Insurance Insurance
at 31 December 2010 2009 2010 2009
Rm Rm Rm Rm
BUSINESS SEGMENTATION
Assets
Intangible assets 127 142 27 31
Investments, loans,
associates and joint ventures 2 205 1 403
Property, plant and
equipment 1 734 1 730 115 112
Transport fleet
Vehicles for hire
Other non-current
financial assets 239 210
Inventories 1 700 1 639
Trade and other
receivables 826 778 293 342
Cash in financial
services businesses 1 078 1 620
Operating assets 4 387 4 289 3 957 3 718
Deferred tax assets
Loans to associates and
other investments
Taxation in advance
Cash and cash equivalents
Assets classified as
held for sale
Total assets per
statement of financial
position
Liabilities
Retirement benefit
obligations
Insurance and investment
contracts 1 093 1 265
Trade and other payables
and provisions 1 470 1 270 1 179 1 126
Other non-current
financial liabilities
Non-interest-bearing
liabilities 1 470 1 270 2 272 2 391
Non-redeemable,
non-participating
preference shares
Interest-bearing
borrowings
Deferred tax liabilities
Current tax liabilities
Liabilities directly
associated with assets
classified as held for sale
Total liabilities per
statement of financial position
GEOGRAPHIC SEGMENTATION
Operating assets 4 387 4 289 3 957 3 718
- South Africa 3 870 3 754 3 583 3 367
- Rest of Africa 374 351
- Rest of world 517 535
Non-interest-bearing
liabilities 1 470 1 270 2 272 2 391
- South Africa 1 254 1 076 2 118 2 270
- Rest of Africa 154 121
- Rest of world 216 194
Interest-bearing
borrowings 1 236 1 342
- South Africa 1 122 1 219
- Rest of Africa
- Rest of world 114 123
Gross capital expenditure 95 109 9 16
- South Africa 78 106 8 16
- Rest of Africa 1
- Rest of world 17 3
Gross capital expenditure 95 109 9 16
Less: Proceeds on disposal (26) (94) (1)
Net capital expenditure 69 15 9 15
Head office and Head office and
Eliminations* Eliminations
at 31 December 2010 2009
Rm Rm
BUSINESS SEGMENTATION
Assets
Intangible assets (2) 1
Investments, loans, associates and joint
ventures 244 2 066
Property, plant and equipment 158 94
Transport fleet (54) (64)
Vehicles for hire (32) (1)
Other non-current financial assets 13
Inventories (2) (19)
Trade and other receivables 6 (25)
Cash in financial services businesses 54 35
Operating assets 372 2 100
Deferred tax assets
Loans to associates and other investments
Taxation in advance
Cash and cash equivalents
Assets classified as held for sale
Total assets per statement of financial position
Liabilities
Retirement benefit obligations
Insurance and investment contracts 3 7
Trade and other payables and provisions 549 284
Other non-current financial liabilities 347 112
Non-interest-bearing liabilities 899 403
Non-redeemable, non-participating
preference shares
Interest-bearing borrowings
Deferred tax liabilities
Current tax liabilities
Liabilities directly associated with assets
classified as held for sale
Total liabilities per statement of
financial position
GEOGRAPHIC SEGMENTATION
Operating assets 372 2 100
- South Africa 297 2 006
- Rest of Africa (2)
- Rest of world 77 94
Non-interest-bearing liabilities 899 403
- South Africa 808 253
- Rest of Africa 9 61
- Rest of world 82 89
Interest-bearing borrowings (259) 1 422
- South Africa (1 837) (548)
- Rest of Africa
- Rest of world 1 578 1 970
Gross capital expenditure (32) (25)
- South Africa (32) (26)
- Rest of Africa 1
- Rest of world
Gross capital expenditure (32) (25)
Less: Proceeds on disposal (36)
Net capital expenditure (68) (25)
* Head office and eliminations includes discontinued operations in the current
reporting period.
SEGMENT INFORMATION - Income statement
Total Continuing
Group operations Logistics Logistics
for the six months ended
31 December 2010 2009 2010 2009
Rm Rm Rm Rm
BUSINESS SEGMENTATION
Revenue
- Sales of goods 18 712 14 151 881 381
- Rendering of services 11 421 10 279 8 694 7 901
- Gross premiums received 1 188 1 218
- Other 39 35 39 33
31 360 25 683 9 614 8 315
Inter-segment revenue 97 51
31 360 25 683 9 711 8 366
Operating expenses
including cost of sales (28 683) (23 769) (8 762) (7 508)
Investment income 106 113
Fair value gains on investments 80 92
Depreciation, amortisation
and impairments (755) (687) (366) (370)
Recoupments (excluding
properties) 18 9 9 10
Operating profit 2 126 1 441 592 498
Recoupments from sale of
properties, net
of impairments 26 38 26 29
Foreign exchange
(losses)gains (24) (1) (4)
Fair value (losses)gains
on foreign exchange
derivatives (16) (5)
Impairment reversals of
share scheme loans 24
Gain on early settlement
of European bond 27
Fair value gain on other
financial instruments 279 72
Profit before net
financing costs and
exceptional items 2 391 1 596 614 527
Net finance cost including
fair value gains
and losses (294) (319) (115) (93)
Income from associates and
joint ventures 19 152 7 11
Profit before taxation and
exceptional items 2 116 1 429 506 445
GEOGRAPHIC SEGMENTATION
Revenue 31 360 25 683 9 711 8 366
- South Africa 24 961 19 662 5 675 4 839
- Rest of Africa 1 179 580 827 275
- Rest of world 5 220 5 441 3 209 3 252
Operating profit 2 126 1 441 592 498
- South Africa 1 830 1 194 379 334
- Rest of Africa 113 88 57 33
- Rest of world 183 159 156 131
Net financing costs 294 319 115 93
- South Africa 256 271 107 82
- Rest of Africa 10 13 6 7
- Rest of world 28 35 2 4
Car Rental Car Rental
and and Distributor-Distributor-
Tourism Tourism ships ships
for the six months ended 31
December 2010 2009 2010 2009
Rm Rm Rm Rm
BUSINESS SEGMENTATION
Revenue
- Sales of goods 613 510 9 785 6 610
- Rendering of services 1 038 915 889 698
- Gross premiums received
- Other 1
1 651 1 426 10 674 7 308
Inter-segment revenue 16 18 603 325
1 667 1 444 11 277 7 633
Operating expenses including cost
of sales (1 245) (1 086) (10 255) (7 174)
Investment income 4 28 1
Fair value gains on investments
Depreciation, amortisation and
impairments (231) (189) (123) (80)
Recoupments (excluding properties) 3 1
Operating profit 198 169 928 380
Recoupments from sale of
properties, net
of impairments
Foreign exchange (losses)gains (5) (12)
Fair value (losses)gains on
foreign exchange
derivatives (1) (3) 5
Impairment reversals of share
scheme loans
Gain on early settlement of
European bond
Fair value gain on other
financial instruments
Profit before net financing costs
and
exceptional items 197 169 920 373
Net finance cost including fair
value gains
and losses (67) (39) (106) (89)
Income from associates and joint
ventures 1 1 13 10
Profit before taxation and
exceptional items 131 131 827 294
GEOGRAPHIC SEGMENTATION
Revenue 1 667 1 444 11 277 7 633
- South Africa 1 574 1 340 9 936 6 274
- Rest of Africa 93 104 141 82
- Rest of world 1 200 1 277
Operating profit 198 169 928 380
- South Africa 173 142 916 360
- Rest of Africa 25 27 (2)
- Rest of world 12 22
Net financing costs 67 39 106 89
- South Africa 67 37 91 77
- Rest of Africa 2 4 4
- Rest of world 11 8
Automotive Automotive
Retail Retail Insurance Insurance
for the six months ended
31 December 2010 2009 2010 2009
Rm Rm Rm Rm
BUSINESS SEGMENTATION
Revenue
- Sales of goods 7 403 6 651
- Rendering of services 728 707 52 44
- Gross premiums received 1 188 1 218
- Other 1
8 131 7 358 1 241 1 262
Inter-segment revenue 391 356 113 87
8 522 7 714 1 354 1 349
Operating expenses
including cost of sales (8 260) (7 496) (1 278) (1 276)
Investment income 5 105 111
Fair value gains on
investments 80 92
Depreciation,
amortisation and
impairments (48) (48) (11) (15)
Recoupments (excluding
properties) (1)
Operating profit 219 169 250 261
Recoupments from sale of
properties, net
of impairments 10
Foreign exchange
(losses)gains (1)
Fair value
(losses)gains on
foreign exchange derivatives
Impairment reversals of
share scheme loans
Gain on early settlement
of European bond
Fair value gain on other
financial instruments
Profit before net
financing costs and
exceptional items 219 179 249 261
Net finance cost
including fair value
gains and losses (59) (75)
Income from associates
and joint ventures (9) 2 8
Profit before taxation
and exceptional items 160 95 251 269
GEOGRAPHIC SEGMENTATION
Revenue 8 522 7 714 1 354 1 349
- South Africa 7 714 6 804 1 236 1 229
- Rest of Africa 118 120
- Rest of world 808 910
Operating profit 219 169 250 261
- South Africa 207 156 220 230
- Rest of Africa 30 31
- Rest of world 12 13
Net financing costs 59 75
- South Africa 57 73
- Rest of Africa
- Rest of world 2 2
Head office and Head office and
Eliminations* Eliminations
for the six months ended 31 December 2010 2009
Rm Rm
BUSINESS SEGMENTATION
Revenue
- Sales of goods 30 (1)
- Rendering of services 20 14
- Gross premiums received
- Other (1) 1
49 14
Inter-segment revenue (1 220) (837)
(1 171) (823)
Operating expenses including cost of sales 1 117 771
Investment income (36) 1
Fair value gains on investments
Depreciation, amortisation and impairments 24 15
Recoupments (excluding properties) 5
Operating profit (61) (36)
Recoupments from sale of properties, net
of impairments (1)
Foreign exchange (losses)/gains (14) 11
Fair value (losses)/gains on foreign
exchange derivatives (12) (10)
Impairment reversals of share scheme loans 24
Gain on early settlement of European bond 27
Fair value gain on other financial instruments 279 72
Profit before net financing costs and
exceptional items 192 87
Net finance cost including fair value gains
and losses 53 (23)
Income from associates and joint ventures (4) 131
Profit before taxation and exceptional items 241 195
GEOGRAPHIC SEGMENTATION
Revenue (1 171) (823)
- South Africa (1 174) (824)
- Rest of Africa (1)
- Rest of world 3 2
Operating profit (61) (36)
- South Africa (65) (28)
- Rest of Africa 1 (1)
- Rest of world 3 (7)
Net financing costs (53) 23
- South Africa (66) 2
- Rest of Africa
- Rest of world 13 21
* Head office and eliminations includes discontinued operations in the current
reporting period.
CORPORATE INFORMATION
Non-executive directors
TS Gcabashe (Chairman), T Dingaan, S Engelbrecht, P Langeni, MJ Leeming,
JR McAlpine, MV Moosa, RJA Sparks, A Tugendhaft (Deputy chairman), Y Waja
Executive Directors
HR Brody (Chief Executive), OS Arbee, MP de Canha, RL Hiemstra,
AH Mahomed, GW Riemann (German), M Swanepoel
Other Executive Committee Members
M Akoojee, BB Francis, DD Gnodde, M Mosola
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 (Pty) Limited, 70 Marshall Street,
Johannesburg, 2001
Sponsor
Merrill Lynch SA (Pty) Limited, 138 West Street, Sandown, Sandton, 2196
Imperial Holdings Limited
Registration number: 1946/021048/06
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN: ZAE000088076
The results announcement is available on the Imperial Holdings Website:
www.imperial.co.za
Date: 23/02/2011 07:05:12 Produced by the JSE SENS Department.
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