| Wed 22 Feb 2012, 7:07 | | IPL/IPLP - Imperial Holdings Limited - Unaudited interim results for the six |
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IPL/IPLP - Imperial Holdings Limited - Unaudited interim results for the six
months ended 31 December 2011
Imperial Holdings Limited
Registration number: 1946/021048/06
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN:ZAE000088076
Unaudited interim results for the six months ended 31 December 2011
Highlights
* Revenue 22% higher to R38 385 million
* Operating profit improved 23% to R2 621 million
* HEPS in line with last year at 727cps
* Core EPS rose 30% to 756 cps
* An interim dividend up 36% to 300 cps
Overview of results
Imperial achieved an excellent first half result with strong revenue and profit
growth. Revenue was 22% higher at R38,4 billion and operating profit increased
by 23% to R2,6 billion. The annualised return on equity for the Group was 23%
based on core earnings.
The Group benefited from a good new vehicle market and improved trading by the
Logistics division. The Group`s new vehicle unit sales in South Africa grew by
14%, which was in line with the growth in the industry. The Logistics division
increased its revenue by 28% as both the southern African and the European
divisions performed well in their respective markets.
The operating margin of 6,8% was in line with the prior period. The
Distributorships division achieved an operating margin of 8,6% against 7,4% in
the prior period and increased revenue by 23%. Automotive Retail also improved
its margin to 2,6% from 2,5%, with revenue up 16%. The margin in the combined
southern African and European logistics business declined to 5,7% from 6,1%,
mainly due to the inclusion of the newly acquired consumer product distribution
business, CIC Holdings Limited (CIC), for a full six months versus two months in
the prior period. Due to the nature of the business, CIC does however generate
strong returns on capital. The Car Rental and Tourism division margin dropped to
10,8% from 11,9%, caused by a more difficult used car market and a challenging
trading environment for the Tourism businesses. In contrast, the Car Rental and
Tourism division enjoyed a boost from the 2010 FIFA World Cup in the prior
period.
The newly defined Financial Services division performed satisfactorily,
achieving an operating profit of R344 million, which was in line with the prior
period. The insurance businesses reported revenue growth of 9,4% and the
underwriting margin improved due to a good performance from the life assurance
unit. Insurance investment income fell short of the strong performance in the
corresponding period, as a result of lower yields on interest-bearing
investments and a flat equity market over the period. Operating profit from
other financial services grew strongly from the combination of annuity income
that includes service and maintenance plans, vehicle financing alliances and a
growing range of value-added financial products.
Over the past number of years, the Group has pursued a strategy to add parts,
components and industrial equipment businesses to its portfolio. This includes
Midas, Jurgens, Beekman Canopies and the recent acquisitions of Turbo Exchange,
Goscor and E-Z-GO. In total, across the Group including NAC, these businesses
contributed turnover of R3,5 billion and operating profit of R237 million, 5%
better than the prior period.
In aggregate, the Group`s operating profit grew by 23%, and Core Earnings per
Share (Core EPS) increased by 30%. The Group has decided to report a core
earnings number in order to exclude significant non-operational items of income
and expenditure from reported headline earnings. The table below summarises the
reconciliation from HEPS to Core EPS:
Cps December December
2011 2010
HEPS 727 725
Amortisation on intangibles other than 5
goodwill arising from business combinations
Fair value gain on Lereko call option (148)
Business acquisition costs 28 6
CGT on post acquisition earnings of 1
associates disposed
Headline earnings from discontinued (5) (2)
operations
Core EPS 756 581
Net finance costs increased by 4% to R305 million on marginally higher debt
during the period. Interest covered by operating profit has risen from 7,2 times
to 8,4 times.
The increase in the non-controlling interests share of profit is largely
attributable to the performance of the Distributorships division in which a
number of non-controlling shareholders participate.
The effective tax rate at 30% was above the statutory rate of 28% because of the
cost of secondary tax on companies and certain disallowed expenses.
The significant decrease in income from associates mainly relates to Ukhamba,
which was negatively impacted by the impairment of its investment in
Distribution and Warehousing Network Limited (DAWN). It also incurred a
significant STC charge on the dividend paid out to its shareholders, of which
Imperial Holdings` share of the STC amounted to R34 million. Mix Telematics, in
which Imperial holds a 26,5% interest performed well and contributed R9 million.
The contribution from smaller associates also increased from the prior year.
Balance sheet
Net debt to equity (excluding preference shares) at 39% was significantly lower
than in December 2010 (48%), but higher than the 31% at June 2011. The
Lehnkering acquisition became effective on 2 January 2012 when payment was made.
After adjusting for the Lehnkering acquisition, the net debt to equity
(excluding preference shares) would have increased to approximately 59%. After
the acquisition, the net debt level is still below the target gearing range of
60% to 80% and leaves room for further expansion of the Group.
The Group`s liquidity position is strong with R7 billion in unutilised
facilities and only 18% of debt is due within one year. Forty-eight percent of
the Group`s debt is at a fixed interest rate.
Net working capital increased by R2 715 million from 30 June 2011. In June 2011,
inventory levels were exceptionally low due to stock shortages, which have now
been alleviated. The imported stock situation has improved significantly and
Imperial`s ability to satisfy demand for the majority of Group products has
improved, reflecting various recent new product launches in the inventory mix.
In addition, there has been an increased investment in stock and debtors to
support higher revenue, especially in the automotive businesses. Debtors also
include fair value adjustments for cash flow hedges which increased by R505
million.
Shareholders` equity increased due to the strong profits and the weakening of
the Rand which resulted in gains on cash flow hedges accounted for through the
statement of comprehensive income. In addition, equity increased by R305 million
from the dividend declared by Ukhamba on the fair value adjustments on its
Imperial shares.
On the back of strong vehicle sales, new business written on maintenance and
warranty contracts generated through the Financial Services division,
contributed to the robust growth of 22% in insurance, investment, maintenance
and warranty contracts on the balance sheet.
Cash flow
Cash generated by operations before capital expenditure on rental assets was 14%
lower than the prior period, which amounted to R1,8 billion. After financing
costs, tax payments and capital expenditure on rental assets, net cash flow from
operating activities decreased by 84%. This was mainly due to the increase in
net working capital of R2 billion referred to above. Capital expenditure on
rental assets was higher than in the corresponding period.
Net replacement and expansion capital expenditure excluding car rental vehicles
was higher than the prior period, as trading conditions warranted renewed
expansion and replacement. Capex in the second half is anticipated to be lower,
as the majority of capex for the year has been spent in the current period.
A net R77 million was spent on the acquisition of subsidiaries and businesses.
Business conditions in Imperial`s markets
Trading conditions in the automotive retail market continue to be favourable.
The higher growth experienced in 2010 continued into the 2011 calendar year,
with new vehicle sales up approximately 16%. Demand continues to be driven by
low interest rates and increased appetite by banks for vehicle finance. The
commercial vehicle market, which lags the upturn in passenger vehicle sales, has
also reversed its negative trend and has shown good growth. The used car market
is more difficult, partly because of stronger new car sales. New vehicle price
increases could relieve some of the pressure in the used car market as the price
gap between new and used vehicles widens.
Volumes in the Consumer Logistics market, which represents approximately 45% of
the revenue of SA Logistics, remain under pressure, as volume throughput in some
areas was lower. The construction sector is still weak, although volumes in
steel, bulk food, chemicals and fuel were positive. Acquisitions and the
inclusion of CIC for a full six-month period contributed positively to the
performance of the SA Logistics division.
Despite the European debt crisis, the German economy remained solid, especially
in the sectors and industries which we serve, i.e. mainly the steel, automotive
manufacturing and export industries, which benefit from the weaker Euro. There
are, however, initial signs of a slowdown in the steel industry.
Lower volumes in the international and local leisure car rental segments persist
and competition is fierce in this industry. A difficult used car market also
places pressure on car rental margins. The tourism business continues to operate
in challenging market conditions with low inbound tourism volumes and the
oversupply of coaches following the 2010 FIFA World Cup.
Strong vehicle sales, especially in the vehicle brands which Imperial
distributes, benefit the Financial Services division. The majority of products
sold generate a valuable annuity earnings stream. Insurance underwriting
conditions, particularly in the short-term industry, were difficult and
deteriorated significantly from the second half of the previous financial year.
Investment markets were less favourable, with lower interest yields and flat
equity markets.
Vehicle sales
In South Africa, the Group sold 55 800 new and 29 556 used vehicles in the
financial period, respectively 14% and 5% more than the prior period. The
national vehicle market grew by approximately 16% year-on-year for the six-month
period to December 2011, according to NAAMSA.
The Australian and United Kingdom operations sold 5 463 new vehicles, which was
24% higher than the prior period, and 2 366 used vehicles, which was 25% higher.
Expansion of the Group during the year
Acquisitions during the period consisted of:
* 74,9% of Dettmar Bulk Reederei, a dry bulk shipping business operating on
the Rhine and other areas;
* 70% of Datadot, a business that uses microdots as a security identification
system used in the detection of theft. DataDots are most widely used to
identify and protect motor vehicles, motor cycles, trailers, marine craft,
home, business and personal assets;
* 75% of Safari Centre, a vehicle accessories and outdoor equipment business;
* 60% of IJ Snyman Transport, a logistics service provider to leading retail,
FMCG and construction brands in Angola, DRC, Namibia, South Africa and
Zambia;
* 80% of Kings Transport, which specialises in the break bulk sector of the
logistics market;
* 60% of Segway SA, which imports and distributes electric personal
transporters; and
* 60% of Synchronized Logistical Solutions, operating in the automotive
logistics industry.
Acquisitions after the period consisted of:
* 100% of Lehnkering was acquired for an enterprise value of R2.8 billion
(Euro270 million). Lehnkering is one of Europe`s leading full-service
specialist logistics companies that primarily serves the chemical,
agricultural, petrochemical and steel industries. It offers a complete
range of logistics solutions, including inland waterway shipping of gas,
liquid and dry bulk cargo; road transportation, chemical warehousing and
outsourced manufacturing services. The Lehnkering acquisition became
effective on 2 January 2012. The acquisition was funded from new Euro-
denominated banking facilities with a term of five years at a pre-tax
interest rate of approximately 3,8%.
Divisional reports
Logistics
Southern African Logistics
R million H1 H1 Change H2 Change %
2012 2011 % 2011 on H2
Revenue 8 311 6 502 27,8 7 286 14,1
Operating profit 513 436 17,7 350 46,6
Operating margin 6,2% 6,7% 4,8%
Despite a challenging trading environment, which included strike action at
several customers during July, the division recorded an impressive 17,7% growth
in operating profit. Acquisitions made a positive contribution, with CIC, the
consumer product distribution business, being the most significant. CIC was
included for a full six months versus two months in the prior period and is
performing in line with expectations.
There was also a significant improvement from the second half of the previous
financial year with operating profit up 47%. The second half of last year was
negatively impacted by the strike in February and the restructuring at The Cold
Chain. The operations at The Cold Chain have been stabilised and continue to
improve.
The inclusion of CIC, which generates good returns, resulted in a decline in
operating margin as it operates at lower margins than the existing businesses.
The operating margin was also negatively impacted by the strike at a number of
customers in July.
Transport and Warehousing, which mainly services the manufacturing, mining,
commodities and construction industries, performed well, despite inconsistent
volumes and route imbalances.
The specialised freight business performed well as fuel and gas, food and
chemical volumes continue to grow. This was offset to some extent by difficult
market conditions in the cement industry, which impacted negatively on the
business. New contract gains and the acquisition of 60% of 777 Logistics in the
prior year also contributed to the positive performance.
The consumer logistics business operated in a challenging environment, with
volume throughput in the manufacturing segment significantly lower than the
prior period. This resulted in high utilisation of warehouses but low fleet
utilisation. The Cold Chain is still not performing optimally, but has improved
from the second half of last year. The division`s performance was enhanced by
contract gains and the acquisition of 80% of Kings Transport, which specialises
in the break bulk sector of the logistics market.
Integration Services, which makes a valuable contribution to the intellectual
capital of the division, produced good results with Volition, Imperial Air
Cargo, e-Logics and the 34%-held associate, Pragma also performed well. The
capabilities of these companies are used to offer integrated outsourced supply
chain solutions, leveraging the logistics capability of various Imperial
Logistics companies and divisions. Through this, many existing client
relationships were strengthened and some new contracts gained. Megafreight
performed well but we are currently in a dispute with our non-controlling
shareholders who own 40%.
Imperial Logistics Africa was established in the prior period to focus on
expanding Imperial`s footprint in the region, which is a strong strategic
imperative. The acquisition of CIC significantly increased the scope of
operations on the continent and is performing well. The Namibian transport
businesses were however under pressure. IJ Snyman Transport was acquired during
the period and strengthens the business in Namibia, Zambia, Angola and the DRC.
Gross capital expenditure of R697 million was incurred. The net investment in
the fleet is higher than the prior period, which is in line with the scheduled
replacement cycle.
International Logistics
EURO million Change %
H1 H1 Change H2 on H2
2012 2011 % 2011 2011
Revenue 397 339 17,1 377 5,3
Operating profit 20 16 25,0 22 (9,1)
Operating margin 5,0% 4,7% 5,8%
Change %
R million H1 H1 Change H2 on H2
2012 2011 % 2011 2011
Revenue 4 159 3 209 29,6 3 639 14,3
Operating profit 202 156 29,5 194 4,1
Operating margin 4,9% 4,9% 5,3%
Imperial Logistics International continues to perform well and its results
exceeded expectations. Despite the European debt crisis, the German economy
remains solid, especially in the sectors and industries in which our operations
are concentrated, namely, the steel, automotive manufacturing and export
industries. Revenue grew across all major business units, assisted by new
contract gains.
Imperial Reederei, the inland waterway shipping business, benefited from strong
transport volumes in the chartering unit and in dry and liquid bulk goods.
Increased freight rates, due to low water levels, contributed positively to
revenue.
Panopa, which provides parts distribution and in-plant logistics services to
automotive and steel manufacturers, performed well. Gillhuber`s new business
gains and the strong momentum in the automotive industry contributed positively.
The port operator, Neska, benefited from increased volumes at bulk and paper
terminals while volumes at container terminals were not as buoyant. Rates at
container and bulk terminals remained subdued. The bulk food transport
businesses performed better than in the prior period.
The Lehnkering acquisition became effective on 2 January 2012 and is performing
in line with expectations; it will make a significant contribution to this
division in the second half. ?
Car Rental and Tourism
Change
%
R million H1 H1 Change H2 on H2
2012 2011 % 2011 2011
Revenue 1 939 1 667 16,3 1 646 17,8
Operating profit 210 198 6,1 153 37,3
Operating margin 10,8% 11,9% 9,3%
The above table excludes contributions from the sale of financial
services products that are of an annuity nature, i.e. results
derived from maintenance funds and JV alliances with financial
institutions. These results are now reported under the newly
created Financial Services division. Comparatives have been
restated.
Despite difficult trading conditions during the period, the division produced
satisfactory results. The prior year`s results were boosted by the 2010 FIFA
World Cup. Revenue growth was recorded in the car rental business with revenue
days up by 11%; utilisation was good at 70% and revenue per day increased by 1%.
The average rental fleet size was 11% up from last year, mainly due to higher
demand. Both volumes and rates from the international and leisure business
remain subdued.
The decline in the margin is mainly due to lower unit sales in Auto Pedigree and
a challenging trading environment for the Tourism business.
Retail unit sales at Auto Pedigree were significantly lower with operating
margins under severe pressure. Auto Pedigree continues to actively manage its
stock position.
The panel business did not perform well during the period, but significant
management and structural changes were made to the business.
The tourism business produced a pleasing improvement due to particularly good
performances of Edusport and Grosvenor Tours. However, overall it continues to
operate in challenging market conditions. Low inbound tourism volumes persist
and the oversupply of coaches following the 2010 FIFA World Cup is putting
further pressure on the charter business. Edusport, acquired in March 2011,
performed well and benefited from arranging outbound tours for the Rugby World
Cup in New Zealand.
?
Distributorships
Change %
H1 H1 Change H2 on H2
R million 2011 % 2011 2012 2011
Revenue 13 590 11 043 23,1 10 904 24,6
Operating profit 1 162 816 42,4 1 028 13,0
Operating margin 8,6% 7,4% 9,4%
The above table excludes contributions from the sale of financial
services products that are of an annuity nature, i.e. results
derived from maintenance funds and JV alliances with financial
institutions. These results are now reported under the newly created
Financial Services division. Comparatives have been restated.
The Distributorships division continued its exceptional performance, with
operating profit up 42% from the prior period. Excluding the Australian
operation, new vehicle registrations as reported to NAAMSA by Associated Motor
Holdings (AMH) and Amalgamated Automobile Distributors (AAD) were 13% higher,
compared to a market increase of approximately 16%. AMH experienced stock
shortages which inhibited sales growth, although stock availability improved
through the period. The successful launch of new models and the improvement in
the new vehicle market over the past 12 months all contributed to growth in
revenue and operating profit. The strongly growing vehicle parc of imported
brands, which includes Hyundai, Kia, Daihatsu, Tata and Proton, has resulted in
annuity revenue streams from after-sales parts and service becoming a much more
significant contributor to results.
Margins improved due to the growth in sales volumes and effective cost control.
Forward exchange contracts assisted with a volatile currency throughout the
period.
The Australian dealerships performed well with new and used retail unit sales up
7% and 34% respectively.
In the Auto Parts division, Midas performed satisfactorily in a sluggish market.
The engine parts businesses performed better than the prior period. The recent
acquisition of 75% of Turbo Exchange was a valuable addition to the division.
The Goscor Group performed very well, trading ahead of expectations. Crown and
Doosan increased market share while maintaining a strong order book. The
cleaning equipment associate also performed well.
E-Z-GO South Africa, a distributor of the leading brand of golf carts, is also
performing in line with expectations and has seen strong demand for its
products, especially in the short-term rental market.
The Graffiti Group continues to gain market share and is performing in line with
expectations.
Over the years, the division has added a number of businesses that augment and
are allied to Imperial`s motor related activities. The contribution from these
businesses - which include Car Find, KMSA, Graffiti, Bid 4 Cars and the recently
acquired Segway and DataDot - continue to grow.
NAC performed better than in the prior period, with aircraft sales activities
increasing, and the maintenance divisions also experienced a positive turnaround
as costs were reduced significantly.
?
Automotive Retail
Change %
H1 H1 Change H2 on H2
R million 2012 2011 % 2011 2011
Revenue 9 877 8 522 15,9 8 628 14,5
Operating profit 261 217 20,3 280 (6,8)
Operating margin 2,6% 2,5% 3,2%
The above table excludes contributions from the sale of financial
services products that are of an annuity nature, i.e. results derived
from maintenance funds and JV alliances with financial institutions.
These results are now reported under the newly created Financial Services
division. Comparatives have been restated.
The division produced good growth in operating profit for the period. New
passenger car sales rose 21%, ahead of the overall market growth of
approximately 16%. There was a notable shift in the mix to entry-level vehicles,
reflecting continued pressure on consumer debt levels and disposable income. As
a result, the mid-priced and luxury vehicle markets were less buoyant and
impacted margins to some extent. Used car volumes were flat, as consumers
continue to prefer well-priced entry-level new cars.
The commercial vehicle market was strong during the period, with a 16% rise in
unit sales across all brands mirroring increased activity, particularly in the
logistics and construction sectors, although the latter is still at a low level
of activity.
Growth in parts and service revenues was encouraging during the period. The
strong growth in new car sales over the last two years bodes well for the future
growth of these revenue streams.
Imperial`s truck dealerships in the UK performed well, aided by the
diversification of brands. The business performed ahead of expectations despite
a depressed market.
Beekman Canopies performed well, with sales up on the prior period. Sales
volumes at Jurgens Ci also improved, albeit at a slower rate.
Financial Services
Change %
R million H1 H1 Change H2 on H2
2012 2011 % 2011 2011
Revenue
Insurance 1 481 1 354 9,4 1 454 1,9
Other financial services 352 285 23,5 316 11,4
Total 1 833 1 639 11,8 1 770 3,6
Operating profit
Insurance
Adjusted investment 80 143 (44,1) 63 27,0
income, including fair
value adjustments
Adjusted underwriting 133 107 24,3 212 (37,3)
results
Total insurance
operating profit 213 250 (14,8) 275 (22,5)
Net underwriting margin 9,0% 7,9% 14,6%
Other financial services 131 95 37,9 140 (6,4)
Operating margin 37,2% 33,3% 44,3%
Total operating profit 344 345 (0,3) 415 (17,1)
Operating margin 18,8% 21,0% 23,4%
Note: The profit before tax of an insurance business is made up of the
underwriting result and investment return. Policyholder investment
returns include investment income and fair value gains for the benefit
of policyholders. The above table reflects a reallocation of
policyholder investment returns between the underwriting result and the
investment return. The adjusted underwriting result and investment
return more accurately reflect the performance from a shareholder point
of view.
The comparatives have been restated for the inclusion of results from
maintenance funds and JV alliances previously reported under other
divisions.
The Financial Services division as a whole performed satisfactorily. The
individual life business made a solid contribution to results, with gross
premium written up 16% for the period. In the short-term insurance business,
gross written premiums were up 7%, reflecting success achieved in the broadening
of the product range.
The adjusted underwriting result was up 24% from R107 million to R133 million,
despite much more challenging underwriting conditions, where the claims
experience in the short-term business deteriorated significantly from the second
half of the previous financial year.
Investment returns were lower year-on-year, reflecting the low interest rate
environment and a largely flat equity market performance during the period.
Regent`s exposure to equity markets remains low.
LiquidCapital continues to perform well and generates valuable annuity earnings
streams. The current positive cycle in the motor industry favours this unit, as
increased vehicle volumes provide an opportunity for the sale of its broad range
of financial products and services. These include service and maintenance plans,
manufacturer warranties and roadside assistance. Penetration levels also
continue to improve as new channels are developed. The joint venture alliances
with financial institutions also continue to show good growth.
Imperial Fleet Management is experiencing improved activity and volumes are
starting to gain traction.
Jurie Strydom who has been with the Group since January 2007 has been appointed
as the CEO of the Regent Group.
Skills development and corporate social investment
The Group continues with its substantial investment in the development of
employees at all levels.
To date, 160 senior executives have participated in a leadership development
programme which was customised for Imperial`s diversified and decentralised
business model, focusing on its need for entrepreneurial and innovative leaders.
The Group`s formal development strategy includes the next level of management,
and there are currently 90 participants enrolled in the programme.
A future talent pipeline is being nurtured through a graduate development
programme which currently provides 150 university graduates with hands-on
workplace experience and mentorship, providing insight into the Imperial culture
and the practical skills required in business.
Ukhamba
Since its establishment, Ukhamba has generated significant value from its
investments, of which 47% is owned by the Ukhamba Trust and 6% by the Ukhamba
Community Development Trust. A portion of the value created was liquidated and
paid out to Ukhamba`s shareholders during December 2011. As a result, the
Ukhamba Trust made a distribution of approximately R350 million to its 15 000
beneficiaries. The Imperial and Ukhamba Community Development Trust also
received a payout of approximately R50 million and continues to promote
effective learning and teaching at seven under privileged schools serving 7 500
learners in Gauteng.
I-Pledge campaign
Road safety has been identified as a social project in which the Imperial Group,
with its vast presence on South Africa`s roads, can make a difference. The Group
launched its I-Pledge road safety campaign publicly in November 2011, after an
internal campaign in which 25 500 of the Group`s staff pledged their own
commitment. The campaign is aimed at improving the behavior of all road users
and attaining the goal of safer and friendlier roads in South Africa. I-Pledge
has already made a meaningful impact on road safety in the areas in which its
activities are concentrated. Valuable partnerships have been established with
important role players in the field of road safety, including the Department of
Transport.
Ordinary dividend
An interim ordinary dividend of 300 cents per share reflecting a 36% improvement
(2011: 220 cents per share) has been declared.
Proposed change to STC and introduction of dividend tax
As a result of the proposed changes to secondary tax on companies (STC) and the
introduction of taxation on dividends, the Board intends to pass on any savings
in STC (subsequent to the proposed changes) to shareholders by increasing the
dividend payment.
Strategic intentions
Since the Group`s restructuring in 2008, more emphasis has been placed on
businesses which generate higher returns on capital and have defensive annuity
income streams. In pursuit of this strategy, the majority of expansion capital
will be applied to:
* The further expansion of the European and southern African logistics
businesses in markets where attractive opportunities continue to exist
* Expanding the Imperial logistics business into Africa. The skills resident
in our southern African and European logistics businesses are well suited
to the opportunities being pursued
* The expansion of current, and acquisition of new, distribution businesses
that require a similar set of skills to that of Imperial`s auto
distribution businesses, which will serve to smooth cycles that result from
motor retail and distribution
* Expanding the motor-related financial services offering - this activity has
gained sufficient scale and importance in our automotive divisions. Its
results are now disclosed separately from the motor businesses where it
originated. The consistency in its results will demonstrate the success
achieved in reducing the Group`s exposure to the natural cyclicality of the
car market
These growth initiatives take place organically and through acquisition,
partnerships and grassroots development. Acquisitions and partnerships are
preferred where the Group does not have the necessary skills and relationships.
Grassroots development will be considered where the expansion initiative is
sufficiently closely related that it forms a natural extension to an existing
business.
Imperial`s growth into Africa will be driven by selective acquisitions and
following the customer base into the continent. Due to the nature and size of
the opportunities in Africa, Imperial`s expansion will be cautious and will take
place over a number of years.
Prospects
In the southern African logistics division, year-on-year growth will benefit
partly from the low base in the second half of the prior year, which included
strike action and the rationalisation of The Cold Chain. Given Imperial`s
infrastructure and network, it is ideally positioned to capitalise on growth
opportunities presented by the logistics industry, while its exposure to diverse
industries, markets, countries and clients offers resilience. Current transport
volumes are, however, under pressure.
The Lehnkering acquisition and the favourable terms of the financing
arrangements will make a positive impact on the results of the European
logistics business. Despite the debt crisis in Europe, the German economy
remains solid in the sectors and industries in which Imperial operates. However,
there are initial signs of a slowdown in the steel industry.
Conditions in the car rental and tourism industry will continue to be tough,
although some improvement can be expected in the used car market due to new car
price increases. Difficult conditions in the tourism businesses are expected to
persist.
The outlook for new vehicle sales is for a slowing rate of growth as the base is
now substantially higher. We will benefit from the strong positioning of
Imperial`s imported brands, significantly improved product supply and the
benefits that flow from parts and service revenue streams, as the car parc of
these brands grew strongly over the recent past. In the longer term, high
consumer debt levels, possible interest rate hikes and any prolonged currency
weakness all present potential headwinds in the new vehicle market.
The auto parts business has proven to be resilient through economic cycles and
will benefit from a growing car parc. The lift truck and other businesses in the
Goscor Group are also expected to perform well.
While underwriting conditions are unpredictable, earnings in the Financial
Services division should be robust in the second half. The investment portfolio
continues to be conservatively managed. LiquidCapital will continue to generate
increasing annuity earnings due to new business being placed on its book in the
current strong vehicle sales cycle.
Imperial`s balance sheet remains strong despite significant organic and
acquisitive growth during the period under review, and the Group is well
positioned to take advantage of attractive acquisition opportunities as they
arise.
While the current economic environment will continue to be challenging,
Imperial`s businesses should continue performing well in most of their markets.
The strong performance of the first half of the 2012 financial year is expected
to continue into the second half.
By order of the Board
T S Gcabashe H R Brody A H Mahomed
Chairman Chief Executive Financial Director
Declaration of dividends for the six months ended 31 December 2011
Preference shareholders and ordinary shareholders
Notice is hereby given that:
* a preference dividend of 338,425 cents per preference share has been
declared payable, by the Board of Imperial, to holders of non-redeemable,
non-participating preference shares; and
* an ordinary dividend in an amount of 300 cents per ordinary share has been
declared payable, by the Board of Imperial, to holders of ordinary shares.
The company has determined the following salient dates for the payment of the
preference dividend and ordinary dividend:
2012
Last day to trade cum preference dividend and Thursday, 15 March
cum ordinary dividend
Preference and ordinary shares commence
trading ex preference dividend and
ex ordinary dividend respectively Friday, 16 March
Record date Friday, 23 March
Payment date Monday, 26 March
Share certificates may not be dematerialised/rematerialised between Friday, 16
March 2012 and Friday, 23 March 2012, both days inclusive.
On Monday, 26 March 2012, amounts due in respect of the preference dividend and
the ordinary dividend will be electronically transferred to the bank accounts of
certificated shareholders who utilise this facility. In respect of those who do
not, cheques dated 26 March 2012 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, 26 March 2012.
On behalf of the Board
RA Venter
Group Company Secretary
22 February 2012
Condensed consolidated income statement
for the six months ended Unaudited Unaudite Audited
d
December December June
2011 2010 % 2011
Rm Rm change Rm
Revenue 38 385 31 360 22 64 667
Net operating expenses (34 930) (28 497) (58 646)
Profit from operations before 3 455 2 863 6 021
depreciation and recoupments
Depreciation, amortisation, (834) (737) (1 495)
impairments and recoupments
Operating profit 2 621 2 126 23 4 526
Recoupments from sale of (38) 26 7
properties, net of impairments
Amortisation of intangible (13) (15)
assets arising on business
combinations
Foreign exchange gains (losses) 9 (24) (33)
Fair value losses on foreign (9) (16) (18)
exchange derivatives
Business acquisition costs (53)
Fair value gain on Lereko call 279 279
option
Exceptional items 3 (19) (46)
Profit before net financing 2 520 2 372 6 4 700
costs and associates
Net finance cost including fair (305) (294) (554)
value gains and losses
Income from associates and (17) 19 34
joint ventures
Profit before tax 2 198 2 097 5 4 180
Income tax expense (664) (555) (1 272)
Net profit for the period 1 534 1 542 2 908
Net profit attributable to:
Equity holders of Imperial 1 350 1 379 2 562
Holdings Limited
Non-controlling interests 184 163 346
1 534 1 542 2 908
Condensed consolidated statement of comprehensive income
for the six months ended Unaudited Unaudited Audited
December December June
2011 2010 2011
Rm Rm Rm
Net profit for the period 1 534 1 542 2 908
Other comprehensive income:
Exchange gains (losses) arising on 199 (148) 26
translation of foreign operations
Realisation of available for sale (23)
investment by Ukhamba
Movement in hedge accounting reserves 594 (310) 35
- Movement in hedge accounting 576 (305) 39
reserves
- Share of associates and joint 18 (5) (4)
ventures hedging reserve
Income tax relating to components of (1)
other comprehensive income
Total comprehensive income for the 2 304 1 083 2 969
period
Total comprehensive income
attributable to:
Equity holders of Imperial Holdings 2 040 957 2 618
Limited
Non-controlling interests 264 126 351
2 304 1 083 2 969
Earnings per share information
for the six months ended Unaudit Unaudit Audited
ed ed
Decembe Decembe June
r r
2011 2010 % 2011
Rm Rm Change Rm
Headline earnings reconciliation
Net attributable profit 1 350 1 379 2 562
Profit on sale of property, plant and (19) (44) (60)
equipment
Impairment of assets 46 2 24
Exceptional items (3) 19 46
Exceptional items - included in income
from associates
and joint ventures 48 17
Gain on sale of available for sale (23)
investments
Tax 3 12 15
Non-controlling interests (6) 4
Headline earnings - basic and diluted 1 396 1 368 2 608
Earnings per share (cents)
- Basic 703 731 (4) 1 346
- Diluted 666 695 (4) 1 266
Headline earnings per share (cents)
- Basic 727 725 1 370
- Diluted 688 690 1 289
Core earnings reconciliation
Headline earnings - basic and diluted 1 396 1 368 2 608
Amortisation on intangibles arising on 13 15
business combinations, other than
goodwill
Fair value gain on Lereko call option (279) (279)
Business acquisition costs 53 11 15
Headline earnings from discontinued (9) (4) (7)
operations
CGT on post acquisition earnings of 2 1
associates disposed
Tax (3) (4)
Core earnings - basic and diluted 1 452 1 096 2 349
Core earnings per share (cents)
- Basic 756 581 30 1 234
- Diluted 716 552 30 1 161
Additional information
Net asset value per share (cents) 7 052 5 557 27 6 137
Number of ordinary shares (million)
- in issue
total shares 209,8 210,3 208,8
net off shares repurchased and 196,1 196,6 195,1
Lereko Mobility
- weighted average 192,0 188,6 190,3
- weighted average for diluted 202,8 198,4 202,3
earnings
Number of other shares in issue
(million)
- Deferred ordinary 14,1 15,0 15,0
Dividends per ordinary share (cents) 300 220 36 480
Details of net finance cost and exceptional
items
for the six months ended Unaudit Unaudit Audited
ed ed
Decembe Decembe June
r r
2011 2010 2011
Rm Rm Rm
Net finance cost
Net interest paid 305 303 563
Foreign exchange loss (gain) on monetary 106 (97) 62
items
Fair value (gain) loss on interest swaps (106) 88 (71)
305 294 554
Exceptional items
Impairment of goodwill (31) (18) (52)
Net profit (loss) on disposal and
rationalisation of investments
in subsidiaries, associates and joint 8 (1) 6
ventures
Fair value adjustments on Aviation disposal 26
assets
3 (19) (46)
Condensed consolidated statement of financial position
at 31 December Re-
presente
d
Unaudite Unaudite Audited
d d
December December June
2011 2010 2011
Rm Rm Rm
ASSETS
Intangible assets 1 921 1 741 1 823
Investments in associates and joint 759 787 770
ventures
Property, plant and equipment 6 970 6 357 6 550
Transport fleet 3 999 3 626 3 627
Vehicles for hire 2 587 2 558 2 057
Deferred tax assets 766 686 661
Investments and loans 2 604 2 539 2 413
Non-current financial assets 259 239 244
Inventories 9 295 6 725 7 589
Tax in advance 192 60 138
Trade and other receivables 8 860 7 446 7 130
Cash resources 2 203 1 985 3 531
Total assets 40 415 34 749 36 533
EQUITY AND LIABILITIES
Capital and reserves
Share capital and premium 22 9 9
Shares repurchased (220) (220) (220)
Other reserves 818 (51) 111
Retained earnings 13 209 11 188 12 073
Attributable to Imperial Holdings` 13 829 10 926 11 973
shareholders
Non-controlling interests 1 125 882 1 043
Total shareholders` equity 14 954 11 808 13 016
Liabilities
Non-redeemable, non-participating 441 441 441
preference shares
Retirement benefit obligations 250 209 233
Interest-bearing borrowings 8 099 7 696 7 508
Insurance, investment, maintenance and 2 825 2 318 2 465
warranty contracts
Deferred tax liabilities 548 624 549
Non-current financial liabilities 243 380 323
Trade and other payables and provisions 12 195 10 661 11 474
Current tax liabilities 860 612 524
Total liabilities 25 461 22 941 23 517
Total equity and liabilities 40 415 34 749 36 533
Capital commitments 437 525 1 007
Contingent liabilities 57 49 61
Condensed consolidated statement of cash flows
for the six months ended Re-
presente
d
Unaudited Unaudite Audited
d
December December June
2011 2010 2011
Rm Rm Rm
Cash flows from operating activities
Cash generated by operations before movements 3 842 3 011 6 375
in working capital
Net working capital movements (2 021) (895) (298)
Cash generated by operations before net 1 821 2 116 6 077
capital expenditure on rental assets
Expansion capital expenditure - rental assets (671) (207) (157)
Net replacement capital expenditure - rental (174) (321) (174)
assets
- Expenditure (1 022) (1 283) (1 900)
- Proceeds 848 962 1 726
Cash generated by operations 976 1 588 5 746
Net financing costs (305) (303) (563)
Tax paid (501) (241) (1 221)
Cash flows from investing activities
Net acquisition of subsidiaries and businesses (77) (930) (943)
Expansion capital expenditure - excluding (346) (342) (530)
rental assets
Net replacement capital expenditure - (655) (372) (667)
excluding rental assets
Proceeds from the sale of Imperial Bank 477 477
Limited
Dividend received from Ukhamba 387
Net movement in other associates and joint (37) 50 78
ventures
Net movement in investments, loans and other (173) (195) (15)
non-current financial instruments
(901) (1 312) (1 600)
Cash flows from financing activities
Hedge cost premium paid (160) (205)
Purchase of ordinary shares (156)
Cost incurred on cancellation of shares (8) (8)
repurchased
Dividends paid (620) (494) (983)
Change in non-controlling interests (137) 19 (51)
Repayment of IPL 3 and IC 01 corporate bonds (2 026) (2 026)
Proceeds from the issuance of IPL 5 and IPL 6 2 034 2 034
corporate bonds
Net decrease in other interest-bearing 89 (281) (225)
borrowings
(668) (916) (1 620)
Net (decrease) increase in cash resources (1 399) (1 184) 742
Condensed consolidated statement of changes in equity
for the six months ended
Share
capital
and
premuim Shares Other Retain
ed
Rm re- reserv earnin
purchased es gs
capital Rm Rm Rm
Balance at 30 June 2010 - Audited 10 (1 816) 433 12 513
Total comprehensive income for the (422) 1 379
period
Share-based equity reserve transferred 29 (29)
to retained earnings on vesting
Share-based equity reserve utilisation (157)
including hedging cost
Share-based equity reserve charged to 62
the income statement
Dividends paid (407)
Consolidation of 5 864 944 Imperial (665)
shares held by Lereko Mobility as
shares repurchased
Purchase and cancellation of 16 000 000 (1) 2 000 (2
ordinary shares from wholly owned 007)
subsidiary
Reserve reallocation 261 (261)
Non-controlling interests arising on
business combination
Net increase in non-controlling 4
interests
Non-controlling interests share of
dividends
Balance at 31 December 2010 - Unaudited 9 (220) (51) 11 188
Total comprehensive income for the 478 1 183
period
Movement in statutory reserves 20 (20)
Share-based equity reserve transferred 1 (1)
to retained earnings on vesting
Share-based equity reserve utilisation (48)
including hedging cost
Share-based equity reserve charged to 60
the income statement
Dividends paid (430)
Transfer of reserves on consolidation
of
5 864 944 Imperial shares held by (309) 309
Lereko Mobility
Purchase and cancellation of 1 465 719 (156)
ordinary shares from open market
Non-controlling interests arising on
business combination
Net decrease in non-controlling (40)
interests
Non-controlling interests share of
dividends
Balance at 30 June 2011 - Audited 9 (220) 111 12 073
Total comprehensive income for the 690 1 350
period
Movement in statutory reserves 4 (4)
Share-based equity reserve transferred 8 (8)
to retained earnings on vesting
Share-based equity reserve utilisation (12)
including hedging cost
Share-based equity reserve charged to 63
the income statement
Issue of 115 060 ordinary shares 13
Dividends paid (507)
Dividend declared by Ukhamba on 305
unrecognised fair value adjustments on
Imperial shares
Non-controlling interests arising on
business combination
Net decrease in non-controlling (46)
interests
Non-controlling interests share of
dividends
Balance at 31 December 2011 - Unaudited 22 (220) 818 13 209
Condensed consolidated statement of changes in equity
for the six months ended
Attributab Total
le
to Non- share-
Imperial
Holdings` controlli holders
ng `
shareholde interests equity
rs
Rm Rm Rm
Balance at 30 June 2010 - Audited 11 140 806 11 946
Total comprehensive income for the period 957 126 1 083
Share-based equity reserve transferred to
retained earnings on vesting
Share-based equity reserve utilisation (157) (157)
including hedging cost
Share-based equity reserve charged to the 62 1 63
income statement
Dividends paid (407) (407)
Consolidation of 5 864 944 Imperial shares (665) (665)
held by Lereko Mobility as shares
repurchased
Purchase and cancellation of 16 000 000 (8) (8)
ordinary shares from wholly owned subsidiary
Reserve reallocation
Non-controlling interests arising on 21 21
business combination
Net increase in non-controlling interests 4 15 19
Non-controlling interests share of dividends (87) (87)
Balance at 31 December 2010 - Unaudited 10 926 882 11 808
Total comprehensive income for the period 1 661 225 1 886
Movement in statutory reserves
Share-based equity reserve transferred to
retained earnings on vesting
Share-based equity reserve utilisation (48) (48)
including hedging cost
Share-based equity reserve charged to the 60 (5) 55
income statement
Dividends paid (430) (430)
Transfer of reserves on consolidation of
5 864 944 Imperial shares held by Lereko
Mobility
Purchase and cancellation of 1 465 719 (156) (156)
ordinary shares from open market
Non-controlling interests arising on 30 30
business combination
Net decrease in non-controlling interests (40) (30) (70)
Non-controlling interests share of dividends (59) (59)
Balance at 30 June 2011 - Audited 11 973 1 043 13 016
Total comprehensive income for the period 2 040 264 2 304
Movement in statutory reserves
Share-based equity reserve transferred to
retained earnings on vesting
Share-based equity reserve utilisation (12) (12)
including hedging cost
Share-based equity reserve charged to the 63 63
income statement
Issue of 115 060 ordinary shares 13 13
Dividends paid (507) (507)
Dividend declared by Ukhamba on unrecognised 305 305
fair value adjustments on Imperial shares
Non-controlling interests arising on (7) (7)
business combination
Net decrease in non-controlling interests (46) (62) (108)
Non-controlling interests share of dividends (113) (113)
Balance at 31 December 2011 - Unaudited 13 829 1 125 14 954
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 2011 and the AC500 standards issued by the Accounting Practices Board
or its successor. The results are presented in accordance with 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 2011.
These condensed consolidated financial statements have not been reviewed or
audited by the Group`s auditors.
These condensed consolidated financial statements were approved by the Board of
Directors on 21 February 2012.
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 2011, except where the Group has adopted new or revised
accounting standards. The Group has adopted the required new or revised
accounting standards in the current period, none of which had a material impact
on the Group`s results.
Core earnings
The Group has decided to report a core earnings number, which excludes
significant non-operational items of income and expenditure from reported
headline earnings.
Discontinued operations
Discontinued operations are immaterial to the Group. Their results are included
in the income statement and under Head Office and Eliminations on the segment
report. The impact on the trading result is insignificant and fair value
adjustments of R26 million have been included in exceptional items.
Re-presentation of the comparative information
New financial services segment
The Group sells financial services products in a number of its segments.
Since 30 June 2011, a Financial Services division has been reported, combining
the results of insurance operations, the sale of warranty and maintenance
products, income from joint ventures on the sale of financial services, cell
captive arrangements and factoring of premium finance operations. This qualifies
as a reportable segment in terms of IFRS 8 Operating segments.
At 31 December 2010, these operations were reported in the Car Rental and
Tourism, Distributorships, Automotive Retail, Insurance and Head Office
segments.
The Insurance segment has been renamed Financial Services and includes all of
the above operations. These reallocations have been re-presented for the prior
period.
None of this has had an impact on the Group`s earnings.
The financial services segment results in the following changes:
2010
Rm
Statement of financial position
Insurance and investment contracts* 1 096
Deferred revenue transferred 1 222
Insurance, investment, maintenance and warranty contracts 2 318
- as re-presented
Trade and other payables* 11 883
Deferred revenue transferred (1 222)
Trade and other payables - as re-presented 10 661
Group income statement
No impact
Group statement of cash flows
Cash generated by operations before movements in working 2 820
capital*
Transfer of the net movement in deferred revenue to 191
movements in insurance funds
Cash generated by operations before movements in working 3 011
capital - as re-presented
Net movement in working capital* (704)
Transfer of the net movement in deferred revenue to (191)
movement in insurance funds
Net movement in working capital - as re-presented (895)
The above reclassification had no impact on cash generated
by operations.
The deferred revenue relates to obligations to provide
services for warranty and maintenance products that extend
beyond the end of the financial period.
*Previously reported
Head
Car Office
Rental Distr Auto- and
i-
and butor- motiv Financi Elimi-
e al
Total Logisti Tourism ships Retai Service nations
cs l s
Rm Rm Rm Rm Rm Rm Rm
2010 2010 2010 2010 2010 2010 2010
Segmental
information -
Financial
position
Operating
assets
Operating 32 526 11 316 3 466 9 028 4 387 3 957 372
assets*
Transfer of (19) (630) (17) 1 279 (613)
financial
services
Operating 32 526 11 316 3 447 8 398 4 370 5 236 (241)
assets - as re-
presented
Operating
liabilities
Operating 13 568 4 319 476 4 132 1 470 2 272 899
liabilities*
Transfer of (5) (893) (7) 1 444 (539)
financial
services
Operating 13 568 4 319 471 3 239 1 463 3 716 360
liabilities -
as re-
presented
Segmental
information -
Income
statement
Profit before 2 116 506 131 827 160 251 241
tax and
exceptional
items*
Transfer of (134) (2) 101 35
financial
services
Profit before 2 116 506 131 693 158 352 276
tax and
exceptional
items - as re-
presented
*Previously
reported
Subsequent events
On 2 January 2012, the Group acquired 100% of the issued shares in Lehnkering
Holding GmbH (Lehnkering), a company incorporated in Germany. Lehnkering
provides the Group with an ideal opportunity to expand into global emerging
markets which are served by German exports. The purchase price was funded from a
new Euro facility established specifically for the acquisition. The details of
this acquisition are outlined under the heading "Business combinations
(including subsequent acquisitions)".
Preparer of financial statements
These condensed consolidated financial statements have been prepared under the
supervision of R Mumford CA(SA).
Operational segmental reporting
For management purposes, the Group is organised into five major operating
divisions - Logistics, Car Rental and Tourism, Distributorships, Automotive
Retail, and Financial Services. 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 tourism, with extensive support services.
Tourism operations include inbound tour operations and niche tourism services.
Distributorships - this segment imports and distributes a range of passenger and
commercial vehicles, automotive products, industrial equipment, motorcycles and
light aircrafts.
Automotive Retail - consists of a large network of motor vehicle and commercial
vehicle dealerships in South Africa and representing most of the major original
equipment manufacturers (OEMs). It also manufactures and sells caravans and
canopies.
Financial Services - comprises insurance operations which are focused on a range
of short-, medium- and long-term insurance and assurance products that are
predominantly associated with the automotive market, the sale of warranty and
maintenance products, income from joint ventures on the sale of financial
services, cell captive arrangements and factoring of premium finance operations.
Business combinations (including subsequent acquisitions)
As all the individual acquisitions are immaterial to the Group, the
disclosures have been made in total.
Subsidiaries and businesses Total of Lehnkering
acquired individual acquisition
immaterial Subsequent
acquisitions to
concluded December 2011
Rm Rm
Total purchase cosideration 118 1 883
transferred
Reason for the acquisition
These businesses were acquired to expand and diversify our distribution
businesses and our logistics businesses within South Africa, rest of
Africa and Europe.
Fair value of assets acquired and Total of Lehnkering
liabilities assumed at date of individual acquisition
acquisition:
immaterial subsequent to
acquisitions
concluded December 2011
Rm Rm
Assets
Intangible assets 7 5
Investments, loans, associates and 4
joint ventures
Property, plant and equipment 35 1 035
Transport fleet 104
Non-current financial assets 52
Deferred tax assets 2
Inventories 147 107
Tax in advance 1
Trade and other receivables 102 974
Loans due by group entities 3
Cash resources 7 249
412 2 422
Liabilities
Retirement benefit obligations 293
Deferred tax liabilities 17
Interest-bearing borrowings 199 1 169
Loans due to group entities 26
Trade and other payables and 163 927
provisions
Current tax liabilities 2 101
407 2 490
Acquirees` carrying amount at 5 (68)
acquisition
Less: Non-controlling interests 7
Net assets acquired 12 (68)
Purchase consideration transferred 118 1 883
- Cash 82 1 883
- Contingent consideration 48
- Fair value of other assets 5
transferred
- Fair value of previously held (17)
interest
Excess of purchase price over net 106 1 951
assets acquired
Trade and other receivables acquired had gross contractual amounts of
R114 million, of which R12 million were doubtful. None of the goodwill
is expected to be deductible for tax purposes. Non-controlling interests
has been calculated based on their proportionate share in net assets.
Details of contingent consideration
The contingent consideration requires the Group to pay the vendors an
additional total amount of R48 million over three years if the entities`
net profit after tax exceeds certain earnings targets.
Acquisition costs
Acquisition costs amounting to R53 million has been recognised as an
expense in the period. This includes acquisition costs relating to
Lehnkering which has been acquired after the reporting period, of R51
million.
Lehnkering acquisition subsequent to December 2011
In respect of this acquisition, the Group has translated the Euro-based
balance sheet at a closing rate of R10,5178 and the income statement at
an average rate of R10,7789. The purchase price, assets acquired and
liabilities assumed are still provisional and work is still being done
to finalise them. This may impact the excess of the purchase price over
the net assets acquired. In addition, the total intangible assets will
need to be split into their components between goodwill and other
intangible assets. Other intangible assets will have to be amortised
over their useful lives.
Impact of the acquisitions on the Total of Lehnkering
results of the Group individual acquisition
immaterial subsequent to
acquisitions
concluded December 2011
Rm Rm
From the dates of acquisition, the
acquired businesses contributed:
?Revenue 379
?Attributable profit 6
Had all the acquisitions been
consolidated from 1 July 2011, the
income statement
would have included:
?Revenue 386 2 874
?Attributable profit 7 84
The attributable profits for Lehnkering disclosed above, amounting to
R84 million, include costs which are once-off in nature and are not
expected to occur again in the future, amounting to R10 million.
Segmental information - Financial position
Car Rental
Group Group Logisti Logisti and Tourism
cs cs
2011 2010 2011 2010 2011
at 31 December Rm Rm Rm Rm Rm
Business segmentation
Assets
Intangible assets 1 921 1 741 1 265 1 144 84
Investments, 2 701 2 702 118 116 7
associates and joint
ventures
Property, plant and 6 970 6 357 1 998 1 740 440
equipment
Transport fleet 3 999 3 626 4 050 3 680
Vehicles for hire 2 587 2 558 2 119
Non-current financial 259 239
assets
Inventories 9 295 6 725 296 309 416
Trade and other 8 860 7 446 5 341 4 327 290
receivables
Cash resources in 973 1 132
financial services
businesses
Operating assets 37 565 32 13 068 11 316 3 356
526
Deferred tax assets 766 686
Loans to associates 662 624
and other investments
Tax in advance 192 60
Cash resources 1 230 853
Total assets per 40 415 34
statement of 749
financial position
Liabilities
Retirement benefit 250 209 250 209
obligations
Insurance, 2 825 2 318
investment,
maintenance and
warranty contracts
Trade and other 12 195 10 4 886 4 078 330
payables and 661
provisions
Non-current financial 243 380 131 32
liabilities
Non-interest-bearing 15 513 13 5 267 4 319 330
liabilities 568
Non-redeemable, non- 441 441
participating
preference shares
Interest-bearing 8 099 7 696
borrowings
Deferred tax 548 624
liabilities
Current tax 860 612
liabilities
Total liabilities per 25 461 22
statement of 941
financial position
Geographic
segmentation
Operating assets 37 565 32 13 068 11 316 3 356
526
- South Africa 30 660 27 8 437 7 825 3 316
159
- Rest of Africa 1 795 1 479 1 276 973 40
- Rest of world 5 110 3 888 3 355 2 518
Non-interest-bearing 15 513 13 5 267 4 319 330
liabilities 568
- South Africa 12 680 11 3 217 2 758 314
357
- Rest of Africa 773 724 534 493 16
- Rest of world 2 060 1 487 1 516 1 068
Interest-bearing 8 099 7 696 3 601 2 973 1 778
borrowings
- South Africa 4 493 4 732 2 691 2 304 1 812
- Rest of Africa 419 278 337 172 (34)
- Rest of world 3 187 2 686 573 497
Gross capital 2 894 2 467 851 693 1 182
expenditure
- South Africa 2 627 2 261 618 528 1 174
- Rest of Africa 87 33 79 30 8
- Rest of world 180 173 154 135
Gross capital 2 894 2 467 851 693 1 182
expenditure
Less: Proceeds on (1 048) (1 (147) (202) (523)
disposal 225)
Net capital 1 846 1 242 704 491 659
expenditure
* ?Head Office and Eliminations includes discontinued operations.
+ ?Financial Services was previously named Insurance and now includes the
financial services businesses from Distributorships, Car Rental and
Tourism, Automotive Retail and Head Office and Eliminations.
These segments have been re-presented taking the financial services
aspects out of these divisions and including them within the Financial
Services division.
Segmental information - Financial position
Car
Rental
and Distri- Distri- Automoti Automotive
ve
Tourism butorsh butorshi Retail Retail
ips ps
2010 2011 2010 2011 2010
at 31 December Rm Rm Rm Rm Rm
Business
segmentation
Assets
Intangible assets 68 418 374 129 127
Investments, 6 140 45 (2)
associates and
joint ventures
Property, plant 422 2 437 2 185 1 766 1 734
and equipment
Transport fleet
Vehicles for hire 2 239 320 190
Non-current
financial assets
Inventories 360 6 075 4 175 2 259 1 700
Trade and other 352 1 961 1 429 864 809
receivables
Cash resources in
financial
services
businesses
Operating assets 3 447 11 351 8 398 5 016 4 370
Deferred tax
assets
Loans to
associates and
other investments
Tax in advance
Cash resources
Total assets per
statement of
financial
position
Liabilities
Retirement
benefit
obligations
Insurance, 33 29
investment,
maintenance and
warranty
contracts
Trade and other 470 4 034 3 210 1 826 1 463
payables and
provisions
Non-current 1
financial
liabilities
Non-interest- 471 4 067 3 239 1 826 1 463
bearing
liabilities
Non-redeemable,
non-participating
preference shares
Interest-bearing
borrowings
Deferred tax
liabilities
Current tax
liabilities
Total liabilities
per statement of
financial
position
Geographic
segmentation
Operating assets 3 447 11 351 8 398 5 016 4 370
- South Africa 3 392 10 309 7 543 4 318 3 853
- Rest of Africa 55 68 79
- Rest of world 974 776 698 517
Non-interest- 471 4 067 3 239 1 826 1 463
bearing
liabilities
- South Africa 457 3 895 3 064 1 452 1 247
- Rest of Africa 14 38 54
- Rest of world 134 121 374 216
Interest-bearing 1 843 2 711 2 527 1 257 1 233
borrowings
- South Africa 1 843 1 975 1 924 1 145 1 119
- Rest of Africa 117 106
- Rest of world 619 497 112 114
Gross capital 1 264 258 69 157 95
expenditure
- South Africa 1 262 249 48 140 78
- Rest of Africa 2
- Rest of world 9 21 17 17
Gross capital 1 264 258 69 157 95
expenditure
Less: Proceeds on (635) (39) (17) (22) (26)
disposal
Net capital 629 219 52 135 69
expenditure
* ?Head Office and Eliminations includes discontinued operations.
+ ?Financial Services was previously named Insurance and now includes the
financial services businesses from Distributorships, Car Rental and
Tourism, Automotive Retail and Head Office and Eliminations.
These segments have been re-presented taking the financial services
aspects out of these divisions and including them within the Financial
Services division.
Segmental information - Financial position
Head Office Head Office
Financia Financia and and
l l
Services Services Elimination Eliminations*
+ s*
2011 2010 2011 2010
at 31 December Rm Rm Rm Rm
Business segmentation
Assets
Intangible assets 29 31 (4) (3)
Investments, 2 426 2 386 12 149
associates and joint
ventures
Property, plant and 129 118 200 158
equipment
Transport fleet (51) (54)
Vehicles for hire 582 600 (434) (471)
Non-current financial 259 239
assets
Inventories 301 183 (52) (2)
Trade and other 549 547 (145) (18)
receivables
Cash resources in 973 1 132
financial services
businesses
Operating assets 5 248 5 236 (474) (241)
Deferred tax assets
Loans to associates
and other investments
Tax in advance
Cash resources
Total assets per
statement of financial
position
Liabilities
Retirement benefit
obligations
Insurance, investment, 2 792 2 286 3
maintenance and
warranty contracts
Trade and other 1 365 1 430 (246) 10
payables and
provisions
Non-current financial 112 347
liabilities
Non-interest-bearing 4 157 3 716 (134) 360
liabilities
Non-redeemable, non-
participating
preference shares
Interest-bearing
borrowings
Deferred tax
liabilities
Current tax
liabilities
Total liabilities per
statement of financial
position
Geographic
segmentation
Operating assets 5 248 5 236 (474) (241)
- South Africa 4 836 4 868 (556) (322)
- Rest of Africa 412 368 (1) 4
- Rest of world 83 77
Non-interest-bearing 4 157 3 716 (134) 360
liabilities
- South Africa 3 978 3 562 (176) 269
- Rest of Africa 179 154 6 9
- Rest of world 36 82
Interest-bearing (987) (621) (261) (259)
borrowings
- South Africa (987) (621) (2 143) (1 837)
- Rest of Africa (1)
- Rest of world 1 883 1 578
Gross capital 474 378 (28) (32)
expenditure
- South Africa 474 377 (28) (32)
- Rest of Africa 1
- Rest of world
Gross capital 474 378 (28) (32)
expenditure
Less: Proceeds on (313) (309) (4) (36)
disposal
Net capital 161 69 (32) (68)
expenditure
* ?Head Office and Eliminations includes discontinued operations.
+ ?Financial Services was previously named Insurance and now includes the
financial services businesses from Distributorships, Car Rental and
Tourism, Automotive Retail and Head Office and Eliminations.
These segments have been re-presented taking the financial services
aspects out of these divisions and including them within the Financial
Services division.
Segmental information - Income statement
Total Total Car Rental
Group Group Logisti Logisti and Tourism
cs cs
2011 2010 2011 2010 2011
for the six months Rm Rm Rm Rm Rm
ended 31 December
Business
segmentation
Revenue
- Sales of goods 23 245 18 712 1 959 881 575
- Rendering of 13 708 11 421 10 419 8 694 1 301
services
- Gross premiums 1 374 1 188
received
- Other 58 39 59 39
38 385 31 360 12 437 9 614 1 876
Inter-segment 33 97 63
revenue
38 385 31 360 12 470 9 711 1 939
Operating expenses (35 (28 (11 (8 762) (1 480)
including cost of 062) 683) 360)
sales
Investment income 97 106
Fair value gains on 35 80
investments
Depreciation, (847) (755) (406) (366) (250)
amortisation and
impairments
Recoupments 13 18 11 9 1
(excluding
properties)
Operating profit 2 621 2 126 715 592 210
Recoupments from (38) 26 26
sale of properties,
net of impairments
Amortisation of (13) (11)
intangible assets
arising on business
combinations
Foreign exchange 9 (24) 3 (4)
gains (losses)
Fair value (losses) (9) (16)
gains on foreign
exchange derivatives
Business acquisition (53) (51)
costs
Fair value gain on 279
Lereko call option
Profit before net 2 517 2 391 656 614 210
financing costs and
exceptional items
Net finance cost (305) (294) (108) (115) (66)
including fair value
gains and losses
Income from (17) 19 14 7
associates and joint
ventures
Profit before tax 2 195 2 116 562 506 144
and exceptional
items
Income tax excluding (664) (555) (187) (155) (41)
tax on exceptional
items
Profit after tax 1 531 1 561 375 351 103
before exceptional
items
Geographic
segmentation
Revenue 38 385 31 360 12 470 9 711 1 939
- South Africa 29 154 24 961 6 462 5 675 1 865
- Rest of Africa 2 201 1 179 1 849 827 74
- Rest of world 7 030 5 220 4 159 3 209
Operating profit 2 621 2 126 715 592 210
- South Africa 2 245 1 869 431 379 196
- Rest of Africa 135 99 82 57 14
- Rest of world 241 158 202 156
Net financing costs 305 294 108 115 66
- South Africa 255 256 97 107 66
- Rest of Africa 14 10 10 6
- Rest of world 36 28 1 2
* ?Head Office and Eliminations includes discontinued operations.
+ ?Financial Services was previously named Insurance and now includes
the financial services businesses from Distributorships, Car Rental and
Tourism, Automotive Retail and Head Office and Eliminations.
These segments have been re-presented taking the financial services
aspects out of these divisions and including them within the Financial
Services division.
Segmental information - Income statement
Car
Rental
and Distri- Distri- Automoti Automotive
ve
Tourism butorshi butorship Retail Retail
ps s
2010 2011 2010 2011 2010
for the six Rm Rm Rm Rm Rm
months ended 31
December
Business
segmentation
Revenue
- Sales of goods 613 12 037 9 785 8 667 7 403
- Rendering of 1 038 889 671 821 728
services
- Gross premiums
received
- Other
1 651 12 926 10 456 9 488 8 131
Inter-segment 16 664 587 389 391
revenue
1 667 13 590 11 043 9 877 8 522
Operating (1 241) (12 349) (10 167) (9 570) (8 258)
expenses
including cost of
sales
Investment income 1
Fair value gains
on investments
Depreciation, (231) (80) (61) (46) (48)
amortisation and
impairments
Recoupments 3 1 1
(excluding
properties)
Operating profit 198 1 162 816 261 217
Recoupments from (44)
sale of
properties, net
of impairments
Amortisation of (2)
intangible assets
arising on
business
combinations
Foreign exchange (18) (5) 1
gains (losses)
Fair value (1) 12 (3)
(losses) gains on
foreign exchange
derivatives
Business (2)
acquisition costs
Fair value gain
on Lereko call
option
Profit before net 197 1 108 808 262 217
financing costs
and exceptional
items
Net finance cost (67) (108) (128) (52) (59)
including fair
value gains and
losses
Income from 1 15 13 1
associates and
joint ventures
Profit before tax 131 1 015 693 211 158
and exceptional
items
Income tax (37) (329) (189) (59) (45)
excluding tax on
exceptional items
Profit after tax 94 686 504 152 113
before
exceptional items
Geographic
segmentation
Revenue 1 667 13 590 11 043 9 877 8 522
- South Africa 1 574 11 830 9 702 8 675 7 714
- Rest of Africa 93 139 141
- Rest of world 1 621 1 200 1 202 808
Operating profit 198 1 162 816 261 217
- South Africa 173 1 135 804 243 205
- Rest of Africa 25 1
- Rest of world 26 12 18 12
Net financing 67 108 128 52 59
costs
- South Africa 67 90 113 50 57
- Rest of Africa 3 4
- Rest of world 15 11 2 2
* ?Head Office and Eliminations includes discontinued operations.
+ ?Financial Services was previously named Insurance and now includes the
financial services businesses from Distributorships, Car Rental and
Tourism, Automotive Retail and Head Office and Eliminations.
hese segments have been re-presented taking the financial services
aspects out of these divisions and including them within the Financial
Services division.
Segmental information - Income statement
Head Office Head Office
Financial Financial and and
Services Services+ Elimination Elimination
s* s*
2011 2010 2011 2010
for the six months Rm Rm Rm Rm
ended 31 December
Business segmentation
Revenue
- Sales of goods 7 30
- Rendering of services 314 283 (36) 7
- Gross premiums 1 374 1 188
received
- Other 1 (1) (1)
1 688 1 472 (30) 36
Inter-segment revenue 145 167 (1 294) (1 258)
1 833 1 639 (1 324) (1 222)
Operating expenses (1 582) (1 429) 1 279 1 174
including cost of sales
Investment income 136 128 (39) (23)
Fair value gains on 35 80
investments
Depreciation, (78) (73) 13 24
amortisation and
impairments
Recoupments (excluding 5
properties)
Operating profit 344 345 (71) (42)
Recoupments from sale 6
of properties, net of
impairments
Amortisation of
intangible assets
arising on business
combinations
Foreign exchange gains (1) 23 (14)
(losses)
Fair value (losses) (21) (12)
gains on foreign
exchange derivatives
Business acquisition
costs
Fair value gain on 279
Lereko call option
Profit before net 350 344 (69) 211
financing costs and
exceptional items
Net finance cost 29 75
including fair value
gains and losses
Income from associates 9 8 (56) (10)
and joint ventures
Profit before tax and 359 352 (96) 276
exceptional items
Income tax excluding (78) (95) 30 (34)
tax on exceptional
items
Profit after tax before 281 257 (66) 242
exceptional items
Geographic segmentation
Revenue 1 833 1 639 (1 324) (1 222)
- South Africa 1 694 1 521 (1 372) (1 225)
- Rest of Africa 139 118
- Rest of world 48 3
Operating profit 344 345 (71) (42)
- South Africa 305 315 (65) (7)
- Rest of Africa 39 30 (1) (13)
- Rest of world (5) (22)
Net financing costs (29) (75)
- South Africa (48) (88)
- Rest of Africa 1
- Rest of world 18 13
* ?Head Office and Eliminations includes discontinued operations.
+ ?Financial Services was previously named Insurance and now includes the
financial services businesses from Distributorships, Car Rental and
Tourism, Automotive Retail and Head Office and Eliminations.
These segments have been re-presented taking the financial services
aspects out of these divisions and including them within the Financial
Services division.
Imperial Holdings Limited
Registration number: 1946/021048/06
Ordinary share code: IPL??ISIN: ZAE000067211
Preference share code: IPLP??ISIN:ZAE000088076
Non-executive directors:
TS Gcabashe (Chairman), SL Botha, T Dingaan, S
Engelbrecht, P Langeni, MJ Leeming, 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, BJ Francis, P Michaux, 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
The results announcement is available on the
Imperial website: www.imperial.co.za
Date: 22/02/2012 07:07:04 Produced by the JSE SENS Department.
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