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Strategic objectives

Imperial has a solid track record of successfully building businesses in the broader automotive and logistics industries. While our key business strategy is to leverage our capital, drive profitability and optimise returns for investors, our sustainability ethos takes into account the strategic importance of other non-financial areas of the business. This includes building a robust internal skills pipeline, investing in future skills through education initiatives and positioning ourselves as a leading corporate citizen in the transportation industry.

Summarised below are our key financial and non-financial strategic objectives.

Generating returns and growing the business

In line with our responsibility to our shareholders we focus on generating higher returns on capital while investing in growing the business in existing and related industries and geographies.

The growth of African economies and the worldwide trend towards outsourcing are driving good growth potential in the logistics industry, both in Africa and abroad. Imperial is focusing on expanding its footprint in this industry as illustrated by recent acquisitions in both the SA Logistics, Rest of Africa and Imperial Logistics International divisions.

We continue to focus on optimising the value chain in our motor vehicle businesses. Our experience in this field stands us in good stead and will enable us to earn ever-increasing annuity income streams as the vehicle parc of brands we exclusively distribute grows and we refine the use of technology and market intelligence.

The distribution of products which carry strong brands in the automotive and industrial markets remains a core focus. We continually look for expansion opportunities into other industries, such as engineering and mining.

Any expansion is considered in the context of stringent criteria.

These include:

  • The acquisition or project should be earnings enhancing
  • The cost of acquisition capital relating to the business should be met in early years and exceeded in later years
  • We must have proven related expertise
  • Asset light acquisitions are to be emphasised
  • Forecast risk should be low with an acceptable buffer

Building a robust internal skills pipeline

We recognise that skilled people offer the business a powerful competitive advantage, particularly in a global environment of critical skills shortages, and skills development is therefore a key business driver across Imperial’s many diverse operations.

In addition to ensuring that we are able to meet the demands of our customer base and take advantage of opportunities within our chosen markets, skills development delivers a range of other sustainability-related benefits in areas such as employment equity and transformation, staff retention and employee satisfaction.

Collectively these factors drive our significant investment in skills and training programmes, which during the year totalled R171 million. Among the many new initiatives launched are the expansion of our artisan and technician training centres to include two new facilities, which have tripled our training capacity in this important area of scarce skills development. Europcar also opened its new Europcar Learning Centre, which will host the training of 1 100 employees. The investment of R7 million in the new facility will allow the company to develop staff through learnerships, short courses and training programmes, ensuring they remain abreast of the latest developments within the industry.

Investing in education for future skills

The development of a sustainable skills pipeline requires investment in the education of the next generation. This is not only a social responsibility, but a business imperative too and one that will secure ongoing talent for Imperial’s business in the future.

To this end, Imperial Holdings, together with its empowerment partner Ukhamba, has made a strategic investment in the upliftment of education facilities and teaching in eight schools in the greater Gauteng area in which we operate. This is carried out through the Imperial and Ukhamba Community Development Trust, to which each division contributes on an annual basis.

The Trust plays a hands-on role in uplifting education in the beneficiary schools, ensuring that learners have sufficient stationery and that educators have access to suitable teaching resources and materials, receives curriculum training and are assisted by teacher mentors. The Trust also seeks to establish libraries at each of the adopted schools, and to expose learners to a range of cultural, sporting and extracurricular activities. It undertakes upgrade projects for school facilities and capital projects when funds allow.

This holistic approach to learner development ensures that individual children benefit not only from improved education, but also from important life skills and increased self-esteem, which will ultimately make them more employable.

Leading corporate citizenship initiatives

Imperial also places strategic emphasis on establishing itself as a leading corporate citizen, particularly in the transport industry. While good corporate citizenship is an important governance and social issue, it is equally a business issue and one that directly impacts the value and perception of our brand.

The company makes strategic investment in projects that serve this purpose. The Imperial I-Pledge campaign, launched during the year under review, is a flagship project in this regard. It seeks to promote safer, friendlier roads by encouraging South Africans to commit to safer driving practices. While the campaign has important brand-positioning impacts, it also delivers benefits that directly affect Imperial’s transport businesses. Fewer road accidents are a key goal in the logistics operations, and will lead to fewer insurance claims and lower costs in the car rental businesses.

  Overall, our businesses are well positioned in each of their markets to seek growth opportunities in and adjacent to their existing industries. Despite significant organic and acquisitive growth during the last few years, the group’s financial position remains strong and can therefore take advantage of such opportunities as they arise.

The group experienced strong growth over the past number of years and has established a much higher level of performance. Given current market conditions, growth is expected in the 2013 financial year, albeit at a slower rate.

Joe Paterno    
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