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Imperial - Preliminary Audited Results For The Year Ended 25 June 2004
Release Date: 25/08/2004 08:00:52 Code(s): IPL
Imperial - Preliminary Audited Results For The Year Ended 25 June 2004
IMPERIAL HOLDINGS LIMITED
(Registration number 1946/021048/06)
Share code: IPL ISIN code: ZAE000003620
continued growth - meeting challenges while still adding value...
PRELIMINARY AUDITED RESULTS FOR THE YEAR ENDED 25 JUNE 2004
OPERATIONAL HIGHLIGHTS
- Our business model and balanced business mix proved resilient under volatile
trading conditions.
- The successful implementation of the group`s BEE transaction.
- Awarding of an investment grade foreign currency issuer rating.
FINANCIAL HIGHLIGHTS
- Headline earnings per share (basic) up 20%
- Cash generated by operations up 55% to R4.3 billion
- Distributions to shareholders up 19%
- Return on equity up to 20.4%
INTRODUCTION
The past year was a challenging, but rewarding one for Imperial. The strength of
the rand, low levels of economic growth and low inflation all contributed
towards a difficult operating environment but despite this the group`s balanced
portfolio of businesses delivered a very satisfactory result.
The group achieved 20% growth in headline earnings to R8.41 per share. The
strides made in improving cash generation was a particularly pleasing element of
these results, with operating cash flow improving by 55% over 2003.
The key highlights of the year included our ability to weather the storm caused
by the rand`s volatility and the successful implementation of the group`s Black
Economic Empowerment transaction which gave our partners, Ukhamba Holdings, a
10.1% interest in the equity of Imperial Holdings. Other features were the
awarding of an investment grade foreign currency credit rating to Imperial and
the successful issuance of a R1 billion seven-year bond.
The board has decided to make a final capital distribution of R1.75 per share,
which together with the interim distribution of R1.40 increased the total
distribution for the year by 19% to R3.15 per share (2003: R2.65).
FINANCIAL OVERVIEW
INCOME STATEMENT
The group delivered a solid operational performance with revenue growing by 9%
to R35.3 billion (2003: R32.3 billion) in a year characterised by low growth and
low inflation. South African revenues grew by 14% compared to 2003. Operating
margins expanded to 8.2% from 8.1% last year resulting in 10% growth in
operating profits, driven by efficiency improvements as well as volume growth.
Again our mix of mobility business proved very resilient.
The fair valuation adjustments of financial instruments required under the AC133
accounting standard applicable for the first time amounted to a gain of R39
million. These arise from investments (R10 million gain), interest rate swaps
and borrowings adjustments (R55 million gain), forward exchange contracts (R82
million loss) and from our associates (R56 million gain).
Other fair value adjustments in the life insurance investment portfolio were
included in realised and unrealised gains and in total were R39 million compared
to a loss of R20 million last year. Foreign exchange losses were R30 million,
down from R35 million last year. In addition an impairment charge of R64 million
was absorbed on the aviation assets in Safair.
Net interest cost declined by 14% to R478 million, benefiting from the AC133
adjustment of R55 million and the lower interest rate environment. All the
major associates performed well, growing attributable income by 37%, fuelled by
the performance of Renault South Africa and Safair Lease Finance (SLF). These
resulted in growth in profit before taxation and exceptional items of 15%.
Exceptional losses amounted to R26 million against a R97 million profit last
year. This loss comprises the impairment of properties and goodwill, reduced by
the final payment received on the disposal of 50.1% of Imperial Bank.
The group`s effective taxation rate increased marginally from last year`s 30.8%
to 31.2% mainly as a result of the secondary taxation on companies charge.
Minorities interest reduced by 25% from R151 million to R113 million mainly due
to the decline in Tourvest`s performance. Net attributable profit grew by 10% to
R1.6 billion and earnings per share rose by 12% from R7.19 to R8.02 benefiting
from share buybacks.
BALANCE SHEET
Our balance sheet remains robust. During the year total assets grew by 7% to
R23.2 billion fuelled principally by growth in our investments in associates,
joint ventures and insurance investment portfolios as well as growth in our
transport fleets. Our leasing and rental assets remained largely unchanged
against last year.
Working capital management was solid, with the net growth in the levels of
inventories and receivables less payables going up by only R42 million.
The group issued a R1 billion seven-year bond, which further reduced our
reliance on traditional sources of debt funding and lengthened the maturity of
the group`s debt.
The structure of the group`s funding remained largely unchanged against last
year, with 28.3% (2003: 28.4%) of our assets funded by debt. Net debt amounted
to 58.4% of equity (2003: 55.6%). If one ascribes 100% of the group`s gross debt
to our fleets of mobility assets, fleets are only geared to 86% of their value
(2003: 84%) and the balance of the group would be debt free.
We are in the process of further improving the efficiency of our balance sheet.
The intention is to transfer the majority of the group`s revenue-earning
mobility assets into a separate entity which will allow those assets to be
geared more appropriately and to free up capital to increase the level of
trading activity and value-added services provided by the group. Given the long-
term contractual revenue streams generated by our assets we believe it would be
reasonable for our revenue-generating mobility assets to be geared
appropriately.
The group was recently awarded an investment grade foreign credit rating by
Moody`s Investors Service of Baa2, which will allow the raising of capital in
foreign markets at a competitive cost, if the need arises. This followed the
awarding of a AA+ rating by CA Ratings earlier in the year.
The group`s funding structure remains flexible and our access to capital to fund
future growth is good.
CASH FLOW
The cash generation of the group improved markedly in the year under review.
Cash generated by operations improved by 55% to R4.3 billion, driven by
improvements in working capital management across the group. After accounting
for significant increases in dividends, capital distributions (included in
financing activities) and taxation payments, net adjusted cash generated from
operating activities increased by 78% to R2.4 billion from R1.4 billion last
year. Free cash flow amounted to R2.4 billion, 144% improvement over the prior
year at R1.0 billion. This equates to 1.4 times our headline earnings (2003: 0.7
times).
Total expansion capital expenditure amounted to R1.2 billion slightly up on last
year`s R1.1 billion, the replacement capital expenditure amounted to R702
million down on last years`R966 million, this resulted in an overall decline in
capital expenditure of 9% to R1.9 billion.
After accounting for additional loans advanced to associates the net cash
invested by the group grew by 26% to R2.4 billion. The principal areas of
capital expenditure were in our leasing and transport fleets and property, plant
and equipment. We purchased shares to the value of R307 million as treasury
stock.
REVIEW OF DIVISIONS
Logistics
The group`s logistics interests performed well given the environment. The strong
rand impacted negatively on the translation of the European business` results
and the macro-economic conditions in South Africa and the rest of Africa
hampered growth.
Our African and South African operations` revenue grew by 8%, despite low
inflation and operating margins decreased slightly to 8.3%. Operating profits
grew by 3% to R468 million. While we have experienced some margin pressure as a
result of the inability to pass on cost increases to customers in a low
inflationary environment, we remain committed to our target operating profit
margin of 10%. We experienced the indirect negative influence of the strong rand
through the impact on some of our exporting customers, but this was offset by
the strength in consumer markets.
Imperial Logistics has been successful in winning new contracts, both from
existing and new customers and we see a growing impetus in the outsourcing of
logistics functions in South Africa. During the period three small acquisitions
were made.
The operational performance of Imperial Logistics International improved over
last year, although the strength of the rand and the write-off of additional
goodwill had an impact on the ultimate contribution made by these businesses.
Tough macro-economic conditions further dampened the performance in Europe.
In euros revenue increased by 2.6% to 719 million euros and due to rand strength
declined by 10% to R5.9 billion. Operating profits declined by 18% to R133
million resulting in the margins declining from 2.5% to 2.2% during the period.
Low water levels on the Rhine river had a significant impact on Imperial
Reederei and Neska in particular which affected first half results negatively.
Whilst J H Bachmann`s German and South African operations performed well,
progress is being made to improve the profitability of the international
operations. Panopa`s operations in Poland have now reached full capacity and are
operating well.
Leasing and fleet management At a macro level, the leasing market in South
Africa remained relatively flat during the past year. SAVRALA (South African
Vehicle Rental and Leasing Association) reports that the year-on-year size of
the leasing market in South Africa reduced marginally in the last quarter of the
year under review.
Revenues grew by 18%, whilst operating profit grew by 5% to R525 million.
Margins declined from 26.2% last year to 23.4%. This margin reduction was driven
by the addition of the lower margin used vehicle retail business, Hypercar, as
well as start-up costs associated with Hypercar. Another factor which impacted
on profitability was the contraction of interest rate differentials in a lower
interest rate environment.
During the year, we successfully bedded down the Clover commercial vehicle fleet
and managed to renew most contracts with a number of key private sector
customers. Although our total fleets grew by 4%, new business volumes were
relatively limited. However, there are some indications of more public sector
fleets that should be outsourced in the coming months. The ongoing expansion of
the Hypercar network, where we dispose of used vehicles coming off our fleets,
has progressed to plan and we are hopeful of establishing a number of new
branches in the year ahead.
Aviation leasing
We operated in a difficult trading environment in the past year. The strength of
the rand had a significant impact on the trading results of the group`s aviation
interests. Furthermore, the slow pace of improvement in global economic
conditions resulted in a sluggish recovery in aviation markets. These conditions
have begun to improve and we have noted increased activity in the trade of
aircraft, strong demand from humanitarian and aid relief projects and an upturn
in the freight integrator market.
Revenue increased by 11%, despite the strength of the rand impacting on foreign
currency denominated income. Margins declined from 18.6% to 10.9% causing a 35%
decline in operating profit from R410 million to R266 million. The decline in
profitability takes full account of a R64 million impairment charge against the
value of our aircraft fleet, without which profits would have declined by 20%.
This impairment was necessitated by the strong rand and we are comfortable with
the fleet`s valuation after this adjustment.
Good performances were recorded by our aircraft trading and specialised
operations. Air Contractors delivered a much-improved performance in the second
half of the year and NAC`s subsidiary, 43 Air School, also performed
particularly well. Safair further proved its ability to place on lease, remarket
and operate its aircraft competitively under difficult market conditions. In
doing so, Safair realised a profit on the disposal of aircraft of R74 million.
Car rental and tourism The car rental and tourism division experienced tough
trading conditions. The strength of the rand limited the discretionary spending
levels of tourists which affects the performance of a substantial part of this
division`s operations. Tourvest, a 68%-owned subsidiary, also had a tough year,
which was compounded by lower supplier credits arising at year-end.
Revenue grew by 2% to R3.4 billion (2003: R3.3 billion), whilst margins declined
from 15.3% in 2003 to 13.1%, the net result being that operating profit declined
by 12% from R509 million to R446 million.
The car rental and touring interests of Imperial grew revenue by 11% and
operating profit by 4%. The ongoing pressure on pricing in the corporate car
rental market continued to limit margin improvements in this segment, but did
show some revenue improvement over last year. Our car rental interests
maintained their market share during the year. Auto Pedigree had a good year,
aided by strong volume growth.
Distributorships
This division performed strongly with revenue growing by 40% from R4.5 billion
to R6.3 billion and operating profits more than doubling to R562 million (2003:
R249 million). Operating margins increased from 5.5% to 8.9%. As a general theme
the strength of the rand assisted this performance to some extent, but the
improved volumes, an increased focus on value-added products and a greater after
sales element in our revenue make-up in this division also propelled its
performance.
Associated Motor Holdings performed well. The imported nature of its products
meant that the rand allowed a rebuilding of market share lost when the rand
weakened two years ago. Added to this the growing presence of the brands we
import results in greater maintenance and service-related revenues, which carry
improved margins and assist in overhead absorption.
Tyco performed exceptionally well during the past year, achieving a significant
improvement in profitability. The DAF range did very well during the year and
its high quality, technologically advanced product range is fast becoming a
force in the southern African truck market. The International range of trucks
continued to perform well and remains the leading long-distance truck in South
Africa. Tyco continues its focus on providing customers with a service of world-
class quality.
Lectrolite, which distributes NGK automotive products in South Africa, performed
well and is looking at expanding the range of products it represents.
Motor vehicles dealerships
During the year under review, the strengthening rand lead to pressure on dealer
margins and to increased customer incentives in certain of our key brands,
suppliers continued to require improvements in the efficiency of their
respective dealer networks and we had to concurrently manage the positive, yet
disruptive, effect of changes in the retail strategies of DaimlerChrysler.
Revenue improved by 11% to R10.1 billion during the year, despite pricing
constraints. This was driven by strong growth in volumes, whilst pricing was
stable during the year. Margins declined to 2.7% (2003: 3.3%), resulting in a
decline in operating profit of 9% to R276 million. This was partly due to the
disappointing operating performance of the Lindsay Saker group.
The group including the distributorships, Auto Pedigree, Hypercar and Tyco in
total retailed 93 422 vehicles (2003: 78 921).
Insurance The group`s insurance interests, Regent Life and Regent Insurance,
both performed very well. An improved investment performance resulted in mark-to
market profits on investment portfolios of R49 million during the year. This,
combined with a strong underwriting performance, resulted in pre-tax profits
more than doubling to R272 million on a 17% improvement in revenue to R1.7
billion. Both these businesses continue to expand their business bases and
improve their critical mass, which assists in absorbing substantial fixed
overheads. These together with a substantial improvement in the investment
portfolio, contributed towards an improvement in pre-tax margins from 8.6% last
year to 16.0%.
ASSOCIATES AND JOINT VENTURES
Income from associates and joint ventures increased by 37% over last year. This
was driven primarily by growth in:
- Safair Lease Finance (SLF), which experienced the benefits of the full-year
contribution of substantial lease agreements concluded in the previous
financial year, substantial year-on-year growth in its aircraft fleet, the
benefit of AC133 adjustments and foreign exchange gains and after absorbing
an impairment charge of R26 million. During the year Imperial advanced R222
million in debt funding to SLF.
- Renault South Africa also performed particularly well, benefiting from the
roll-out of a new product range, strong volume gains and the resultant
improvement in dealer performances. Renault South Africa is fast
approaching critical mass, where the after-sales activities generated by
the existing vehicle park in the market place can enhance margins and
returns.
- Imperial Bank performed well, although profits were marginally below those
reported last year after coming off an exceptionally high base. The bank`s
advances grew by 41% year-on-year to R13.2 billion, bad debts are 1.9% of
advances, resulting in our attributable share of profits of R108 million
and a ROE of 24.1% (2003: 32.4%).
PROSPECTS
The outlook for the future performance in Imperial remains good. Although the
strength of the rand was substantially neutral in its impact on the group
overall during the past year, it had a significant effect on most of our
divisions as well as their customers. Going forward, we would expect the rand to
stabilise, providing a more sustainable business environment. We continually
focus on improving the efficiency with which we conduct our business in order to
be as competitive as possible. The low inflationary environment poses challenges
to Imperial, but our trading capabilities and constant focus on adding value to
our customer offerings remain the cornerstones of our growth ambitions.
Logistics should continue to benefit from a growing trend towards outsourcing of
supply chains and we are well positioned to benefit from customers` increasing
requirements for value-added, integrated solutions. Improved economic growth and
a strong consumer environment should provide further support and mitigate the
low inflationary environment and residual cost pressures. In Europe we expect a
respectable improvement in profitability driven by improved efficiencies, an
improved global economy and the maturing of certain major contracts.
Leasing and Fleet Management is expected to benefit from some new business
possibilities in the public sector and is positioning itself well to continue
its growth in the growing corporate fleet management market. Ongoing growth in
the industrial equipment market is also expected.
Aviation Leasing should benefit from a more stable rand, which will create a
more solid base for growth. This, together with the increased contribution from
our value-added services and solutions, is expected to further support our
performance. We are experiencing an increase in aircraft sales activity,
contract operations and consistent, albeit slow, improvements in aircraft
values.
The Car Rental and Tourism division foresees some improvement in trading
conditions as the initial signs of returning pricing power is becoming evident.
Efficiency improvements should further support growth. A more stable rand should
support some recovery in the inbound tourism market in coming months. Global
instability does, however, remain a risk in this regard.
The Distributorships should continue to perform well. We expect a continuation
of the current good trading environment and the increased penetration of value-
added services and further volume growth should also aid performance.
Motor Dealerships are expected to improve their performance going ahead,
benefiting from continued low interest rates and the expectation of solid volume
growth.
The group`s Insurance interests, while reliant to some extent on the performance
of investment markets, are expected to continue their solid trading and
underwriting performances. Expansion into new, but allied, market niches should
support future growth.
The performance of the group`s associates should also continue to grow. Renault
South Africa is expected to continue benefiting from the success of its new
product range. Safair Lease Finance should also deliver a solid performance in
future. Imperial Bank is expected to continue to perform well.
Overall we remain optimistic about the future prospects of our group. Our
divisions are efficient and are industry leaders in most instances. They have
the capacity to grow profits and the resilience to counter the impact of the
fluctuating currency.
Imperial is a growth oriented group. A focus on returns and cash generation
should deliver solid improvements in the financial performance of our businesses
in the future. By leveraging a low cost of funds and a resilient balance sheet,
we continue our quest of delivering good growth and above-average shareholder
returns.
By order of the board
LBoyd, Chairman
W GLynch, Chief executive
A HMahomed, Financial director
Johannesburg
24 August 2004
CAPITAL DISTRIBUTION
Notice is hereby given that a capital distribution of 175 cents per ordinary
share has been declared in terms of the general authority granted at the annual
general meeting of shareholders held on 4 November 2003 and is payable to
shareholders recorded in the books of the company at the close of business on
Friday, 1 October 2004. In compliance with the requirements of STRATE, the
electronic settlement and custody system used by the JSE Securities Exchange
South Africa, the company has determined the following salient dates for the
payment of the capital distribution:
2004
Last day to trade cum capital distribution Thursday, 23 September
Shares commence trading ex capital
distribution Monday 27 September
Record date Friday, 1 October
Payment date Monday, 4 October
Share certificates may not be dematerialised/rematerialised between Monday, 27
September 2004 and Friday, 1 October 2004, both days inclusive.
On Monday, 4 October 2004, the capital distribution will be electronically
transferred to the bank accounts of certificated shareholders that utilise this
facility. In respect of those who do not, cheques dated 4 October 2004 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, 4
October 2004.
On behalf of the board
R A Venter, Group Company Secretary
24 August 2004
INCOME STATEMENT
for the years ended 25 June
2004 2003 %
Rm Rm change
Revenue 35 278 32 277 9
Profit from operations before
depreciation and recoupments 4 079 3 776
Depreciation and recoupments (1 193) (1 149)
Operating profit 2 886 2 627 10
Foreign exchange loss (30) (35)
Fair value adjustments to foreign
exchange derivatives (82)
Goodwill amortisation (63) (67)
Profit before net financing costs 2 711 2 525 7
Finance costs net of fair value
gains on borrowings and interest
swaps (529) (667)
Finance income 51 112
Income from associates and joint
ventures 228 167
Profit before exceptional items 2 461 2 137 15
Exceptional items (26) 97
Profit before taxation 2 435 2 234 9
Taxation 696 606
Profit after taxation 1 739 1 628 7
Minority interest 113 151
Net attributable profit for the year 1 626 1 477 10
Cents Cents
Earnings per share*
- Basic 802.3 718.7 12
- Diluted 723.2 716.9 1
Headline earnings per share*
- Basic 840.5 700.2 20
- Diluted 789.2 698.4 13
* Earnings per share reconciliation
Headline earnings per share 840.5 700.2
Goodwill amortisation (29.1) (28.4)
Profit on sale of property, plant
and equipment 4.2 4.5
Exceptional items (13.3) 42.4
802.3 718.7
* Based on the weighted average number of shares in issue
Additional information
Net asset value per share (cents) 4 329 4 041
Number of shares (million)
- in issue 200.1 202.9
- weighted average 202.7 205.3
Rm Rm
Financing
Interest paid 586 668
Capitalised to property, plant
and equipment (2) (1)
Fair value gains on borrowings and
interest swaps (55)
529 667
Interest earned (51) (112)
Exceptional items
Surplus on disposal of 50.1% of
Imperial Bank Limited 53 45
Impairment of property, plant and
equipment (41)
Impairment of goodwill (33)
Reversal of impairment (impairment)
of other assets 3 (4)
(Loss) profit on sale of investments
in subsidiaries and associates (8) 56
(26) 97
Accounting policies
The financial statements are prepared in accordance with, and comply with,
Statements of Generally Accepted Accounting Practice in South Africa, effective
for the group`s financial period, and are consistent in all material respects
with those applied in the previous annual report, except for the adoption of
AC133 Financial Instruments: Recognition and Measurement (revised 2002).
CHANGE IN ACCOUNTING POLICY
During the current year, the group adopted AC133 Financial Instruments:
Recognition and Measurement (revised 2002). AC133 has introduced a comprehensive
framework for accounting for all financial instruments. The principal effect of
the adoption of AC133 has been the fair value adjustment of forward exchange
contracts, derivative instruments and interest-bearing debt.
Fair value and other AC133 adjustments resulting in a reduction to opening
distributable reserves are
summarised as follows: Rm
Foreign exchange derivatives 44
Borrowings and interest rate swaps 74
Investments and loans receivable (15)
103
Attributable share from associates 44
147
Minority interest (1)
Total adjustment to opening
distributable reserves 146
Fair value and other AC133
adjustments resulting in an
increase in profit during the
current year are summarised as
follows:
Losses on foreign exchange
derivatives (82)
Gains on borrowings and interest
swaps 55
Fair value gains investments 10
(17)
Attributable share from associates
net of taxation 56
Total amount included in profit
before taxation 39
Audit report
The comprehenisive results have been audited by the Group`s auditors, Deloitte &
Touche. Their unqualified audit opinion is available for inspection at the
company`s registered office.
BALANCE SHEET
at 25 June
2004 2003
Rm Rm
Property, plant and equipment 2 311 2 180
Intangible assets 488 504
Investments in associates and joint ventures 1 771 1 281
Other investments and loans 890 708
Deferred tax assets 252 247
Leasing assets 4 785 4 713
Transport fleet 2 150 1 881
Vehicles for hire 734 735
Inventories 3 729 3 551
Trade and other receivables 4 756 4 480
Taxation in advance 98 61
Cash and cash equivalents 1 261 1 298
Total assets 23 225 21 639
Insurance funds 833 566
Interest-bearing borrowings 6 576 6 135
Retirement benefit obligations 178 206
Deferred tax liabilities 626 531
Other liabilities 5 906 5 509
Total liabilities 14 119 12 947
Net assets 9 106 8 692
FUNDED BY
Ordinary shareholders` interest 8 662 8 199
Minority interest 444 493
Total shareholders` equity 9 106 8 692
Supplementary information
Investments in associates and joint ventures
At carrying value 797 607
Loans 974 674
1 771 1 281
Other investments and loans
Listed, at market value 698 342
Unlisted, at fair value 62
Listed, at cost 93
Unlisted, at lower of cost or realisable value 57
Loans receivable 130 216
890 708
Capital expenditure 3 834 3 479
Capital commitments 328 299
Contingent liabilities 301 215
Lease commitments 1 408 1 379
CASH FLOW STATEMENT
for the years ended 25 June
2004 2003
Rm Rm
Cash flows from operating activities
Cash generated by operations before
changes in working capital 4 330 3 900
Net working capital movements (44) (1 140)
Cash generated by operations 4 286 2 760
Net financing costs (533) (555)
Dividends paid (427) (97)
Taxation paid (614) (240)
Net cash flows from operating activities 2 712 1 868
Cash flows from investing activities
Acquisition of subsidiaries and businesses (156) (35)
Proceeds on disposal of subsidiaries
and businesses 60 133
Expansion of property, plant and equipment (403) (336)
Expansion of leasing assets (548) (357)
Expansion of transport fleet (219) (316)
Expansion of vehicles for hire (78)
Net replacement of property, plant and
equipment (88) (50)
Net replacement of leasing assets (168) (422)
Net replacement of transport fleet (298) (242)
Net replacement of vehicles for hire (138) (225)
Net acquisition of intangibles (10) (27)
Additional investments in and loans (to) from
subsidiaries and associated companies, net
of disposals (313) (85)
Purchase of equities and loans advanced (680) (204)
Proceeds on disposal of investments 552 337
Net cash flows from investing activities (2 409) (1 907)
Cash flows from financing activities
Cash flow from the issue of shares and
movements in minorities 57 44
Purchase of treasury stock (307) (206)
Capital distribution (283) (500)
Increase (decrease) in long-term borrowings 519 (200)
Net cash flows from financing activities (14) (862)
Net increase (decrease) in cash and cash
equivalents 289 (901)
STATEMENT OF CHANGES IN EQUITY
for the year ended 25 June 2004
Share Non-distri- Distri-
capital butable butable
and reserve reserve Total
premium
Rm Rm Rm Rm
Balance at 26 June 2002 2 891 527 4 240 7 658
Net losses arising on
translation of foreign
operations not recognised
in the income statement (250) (250)
Net attributable profit
for the year 1 477 1 477
Share of distributable
reserves of associates 115 (115)
Contingency reserve created
in terms of the Insurance
Act 11 (11)
Issue of 563 100 ordinary
shares 20 20
Purchase of 5 985 076
ordinary shares (302) (302)
Sale of 1 957 797 ordinary
shares 96 96
Capital distribution of
120 cents per share (247) (247)
Capital distribution of
125 cents per share (253) (253)
Balance at 25 June 2003 2 205 403 5 591 8 199
Opening distributable
reserves adjustment
resulting from AC133 (146) (146)
Net losses arising on
translation of foreign
operations not recognised
in the income statement (222) (222)
Net attributable profit
for the year 1 626 1 626
Share of distributable
reserves of associates 177 (177)
Contingency reserve
created in terms of the
Insurance Act 23 (23)
Realised gains on sale of
subsidiaries (4) 4
Revaluation of available
for sale investments to
fair value 4 4
Issue of 22 755 389
deferred ordinary shares 1 1
Issue of 1 901 401
ordinary shares 74 74
Purchase of 4 676 582
ordinary shares (307) (307)
Ordinary dividend of 140
cents per share net
treasury stock (284) (284)
Capital distribution of
140 cents per share (283) (283)
Balance at 25 June 2004 1 690 381 6 591 8 662
SEGMENTAL INFORMATION
25 June 2004
INCOME STATEMENT
Logistics Leasing
Group and and fleet
transport management
2004 2003 2004 2003 2004 2003
Rm Rm Rm Rm Rm Rm
BUSINESS SEGMENTATION
Revenue
- Sales of goods 17 125 14 491 589 525 470 298
- Rendering of services 16 534 16 461 10 523 10 809 1 511 1 482
- Gross premiums received 1 491 1 204
- Interest income 61 52
- Dividend income 16 8
- Other 51 61 51 61
35 278 32 277 11 163 11 395 1 981 1 780
Inter-segment revenue 413 460 259 125
35 278 32 277 11 576 11 855 2 240 1 905
Operating expenses
excluding gains and
losses on investments 31 248 28 481 10 565 10 886 1 284 1 023
Realised and unrealised
losses (gains) on
investments (39) 20
Fair value gains
investments (10)
Depreciation 1 495 1 366 464 419 490 432
Recoupments (302) (217) (54) (68) (59) (50)
Operating profit 2 886 2 627 601 618 525 500
Foreign exchange
(losses) gains (30) (35) (16) (8) (12) (1)
Fair value losses on
foreign exchange
derivatives (82) (8)
Goodwill amortisation (63) (67) (30) (40) (2)
Profit before net
financing costs 2 711 2 525 555 570 503 499
Net financing costs (478) (555) (105) (125) (156) (165)
Income from associates
and joint ventures 228 167 18 21
Profit before exceptional
items 2 461 2 137 468 466 347 334
Geographic segmentation
Revenue 35 278 32 277 11 163 11 395 1 981 1 780
- South Africa 27 696 24 385 4 854 4 449 1 573 1 401
- Rest of Africa 889 800 393 339 185 155
- Rest of World 6 693 7 092 5 916 6 607 223 224
Operating profit 2 886 2 627 601 618 525 500
- South Africa 2 578 2 311 445 443 433 417
- Rest of Africa 135 109 23 12 69 54
- Rest of world 173 207 133 163 23 29
Net financing costs 478 555 105 125 156 165
- South Africa 444 511 94 104 134 143
- Rest of Africa 19 30 6 12 12 15
- Rest of world 15 14 5 9 10 7
BALANCE SHEET
Business segmentation
ASSETS
Property plant and
equipment 2 311 2 180 969 1 060 93 85
Intangible assets
(including goodwill) 488 504 226 259 15 16
Investments, loans and
associates 1 957 1 447 100 69 (8)
Leasing assets 4 785 4 713 2 468 2 175
Transport fleet 2 150 1 881 2 208 1 932
Vehicles for hire 734 735
Inventories 3 729 3 551 182 141 292 257
Trade and other
receivables 4 756 4 480 2 543 2 511 341 264
Cash in financial
services businesses 473 395
Operating assets 21 383 19 886 6 228 5 972 3 209 2 789
Deferred tax assets 252 247
Loans to associates and
other investments 704 542
Taxation in advance 98 61
Cash and cash equivalents 788 903
Total assets per balance
sheet 23 225 21 639
LIABILITIES
Insurance funds 833 566
Retirement benefit
obligations 178 206 178 206
Accounts payable and
provisions 5 484 5 072 2 347 2 238 456 450
Non-interest-bearing
liabilities 6 495 5 844 2 525 2 444 456 450
Interest-bearing
borrowings 6 576 6 135
Deferred tax liabilities 626 531
Current tax liabilities 422 437
Total liabilities per
balance sheet 14 119 12 947
Geographic segmentation
OPERATING ASSETS 21 383 19 886 6 228 5 972 3 209 2 789
- South Africa 17 900 16 537 4 365 3 844 2 543 2 100
- Rest of Africa 552 577 213 198 190 219
- Rest of world 2 931 2 772 1 650 1 930 476 470
NON-INTEREST-BEARING
LIABILITIES 6 495 5 844 2 525 2 444 456 450
- South Africa 5 313 4 511 1 570 1 369 352 328
- Rest of Africa 213 237 62 68 45 52
- Rest of world 969 1 096 893 1 007 59 70
INTEREST-BEARING
BORROWINGS 6 576 6 135 1 529 1 686 1 767 1 443
- South Africa 5 835 5 453 1 302 1 451 1 513 1 185
- Rest of Africa 217 302 69 72 90 132
- Rest of world 524 380 158 163 164 126
GROSS CAPITAL EXPENDITURE 3 834 3 479 895 921 1 372 1 074
- South Africa 3 292 2 978 699 738 1 190 820
- Rest of Africa 126 178 55 52 60 106
- Rest of world 416 323 141 131 122 148
Gross capital expenditure 3 834 3 479 895 921 1 372 1 074
Less : Proceeds on
disposal (1 962)(1 429)(224) (227) (597) (359)
Net capital expenditure 1 872 2 050 671 694 775 715
SEGMENTAL INFORMATION
25 June 2004
INCOME STATEMENT
Car rental
Aviation and Distributor-
leasing tourism ships
2004 2003 2004 2003 2004 2003
Rm Rm Rm Rm Rm Rm
Business segmentation
Revenue
- Sales of goods 748 775 1 252 1 122 5 025 3 678
- Rendering of services 1 694 1 376 1 969 2 035 342 316
- Gross premiums received
- Interest income
- Dividend income
- Other
2 442 2 151 3 221 3 157 5 367 3 994
Inter-segment revenue 50 185 171 918 503
2 442 2 201 3 406 3 328 6 285 4 497
Operating expenses
excluding gains and
losses on investments 2 077 1 619 2 762 2 624 5 678 4 208
Realised and unrealised
losses (gains) on
investments
Fair value gains
investments
Depreciation 173 176 295 278 50 48
Recoupments (74) (4) (97) (83) (5) (8)
Operating profit 266 410 446 509 562 249
Foreign exchange (losses)
gains (9) (24) (1) 7
Fair value losses on
foreign exchange
derivatives (74)
Goodwill amortisation (25) (23) (3) 2
Profit before net
financing costs 257 386 421 485 492 251
Net financing costs (125) (153) (38) (12) (83) (90)
Income from associates
and joint ventures 71 33 1 1 24 (2)
Profit before exceptional
items 203 266 384 474 433 159
Geographic segmentation
Revenue 2 442 2 151 3 221 3 157 5 367 3 994
- South Africa 1 888 1 894 3 121 3 055 5 281 3 994
- Rest of Africa 100 98 86
- Rest of World 554 257 4
Operating profit 266 410 446 509 562 249
- South Africa 248 393 434 493 564 249
- Rest of Africa 12 16 (2)
- Rest of world 18 17
Net financing costs 125 153 38 12 83 90
- South Africa 123 153 42 15 81 90
- Rest of Africa (2) (1) 2
- Rest of world 2 (2) (2)
BALANCE SHEET
Business segmentation
ASSETS
Property, plant and
equipment 107 79 181 179 459 362
Intangible assets
(including goodwill) 21 12 231 210 1
Investments, loans and
associates 506 475 1 4 254 218
Leasing assets 2 185 2 311 139 234
Transport fleet
Vehicles for hire 740 741
Inventories 501 564 335 298 1 346 1 154
Trade and other
receivables 476 279 250 374 590 505
Cash in financial
services businesses
Operating assets 3 796 3 720 1 738 1 806 2 788 2 474
Deferred tax assets
