HOME Integrated Annual Report 2012 Sustainability Report 2012 Annual Financial Statements 2012
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Chief executive officer’s and chief financial officer’s review

Hubert Brody   Hafiz Mahomed
Hubert Brody
Chief executive officer
  Hafiz Mahomed
Deputy chief executive and
financial director


Revenue 25% higher at R80 830 million
Operating profit improved 25% to R5 638 million
HEPS up 14% to 1 566 cps
Core EPS rose 32% to 1 623 cps
Final dividend of 380 cps up 46%
Net debt:equity ratio of 42%
Free cash conversion ratio of 125%
R171 million invested in skills development
Launched the Imperial I-Pledge road safety campaign, sparking a national movement towards safer driving
Readmission into the JSE ALSI Top 40

In the year to 30 June 2012, Imperial reaped the benefits of key strategies implemented in the recent past, retaining its marketleadership position as a robust, streamlined and entrepreneurially driven organisation that maximises return for shareholders.

We continued to drive returns and performance levels and retained our focus on becoming a more asset-light organisation with higher returns on capital, while targeting key areas for strategic growth. In these we have made good progress, strengthening the sustainability of our automotive business through greater diversification, and taking full advantage of the growth opportunities inherent in the local and international logistics markets.

Conditions in Imperial’s markets

Strong growth continued in the motor vehicle market throughout the financial year to June 2012. The market benefited from improving bank approval rates, low interest rates, real growth in disposable income and low vehicle inflation. While improved affordability and good value have been key drivers of new vehicle sales, similar trends have not been evident in the used car market, which was sluggish.

The manufacturing sector of the South African economy is currently weak and a number of our South African Logistics customers are under pressure. Despite volume pressure in our customer base, we continue to benefit from the trend to outsourcing by companies that require a viable and cost-effective option and prefer to focus on their core businesses.

German industries, particularly export-oriented sectors, where the majority of Imperial Logistics International’s customer base operates, enjoyed significant growth despite the European debt crisis, assisted by a weaker Euro.

The car rental market remains highly competitive. The pressure on rental rates, which was mainly created by the oversupply of vehicles subsequent to the 2010 FIFA World Cup, is however easing, as market capacity is better utilised due to improved demand in certain sectors. Rates in the international inbound and leisure rental markets are still depressed. The depressed international economic environment, especially in Europe, continues to affect inbound tourism volumes.

Insurance underwriting conditions were weaker than the prior year, particularly in the short-term industry. Investment markets were also less favourable with lower interest rates and volatile equity markets.

The current cycle in the motor industry favours our financial services division as high levels of new contracts are generated, which provides a valuable growing annuity earnings underpin to our earnings.

Vehicle sales

In South Africa, the group sold 114 754 new and 58 608 used vehicles over the financial year, respectively 19% and 7% more than the prior period. The national new vehicle market grew by approximately 13% year on year for the 12-month period to June 2012, according to NAAMSA.

The Australian and United Kingdom operations sold 10 846 new vehicles, which was 19% higher than the prior period, and 4 540 used vehicles, which was 18% higher.

Overview of results

Summarised income statement

at 30 June

Revenue 80 830   64 667   25  
Operating profit 5 638   4 526   25  
Foreign exchange (losses)/gains and forex derivatives (10)   (51)      
Exceptional (losses)/gains (12)   (46)      
Impairment of property net of recoupments (32)   7      
Amortisation of intangible assets arising on business combinationss (128)   (15)      
Business acquisition costs (51)          
Fair value gain on Lereko call option     279      
Net financing costs (681)   (554)   23  
Income from associates and joint ventures 46   34   35  
Income tax expense (1 382)   (1 272)   9  
Net profit for the period 3 388   2 908   17  
   Attributable to Imperial shareholders 2 980   2 562   16  
   Attributable to minorities 408   346   18  

Revenue (R billion)
Operating profit (R billion)
Revenue (R billion)   Operating prot (R billion)
* Continuing operations only.   * Continuing operations only.

Divisional split of revenue and operating profit

Logistics 27 704   20 636   34  
Car rental and tourism 3 801   3 313   15  
Distributorships 28 318   21 947   29  
Automotive retail 19 560   17 150   14  
Financial services 3 999   3 409   17  
Head office and eliminations (2 552)   (1 788)      
80 830   64 667   25  
Operating profit            
Logistics 1 508   1 136   33  
Car rental and tourism 380   351   8  
Distributorships 2 456   1 844   33  
Automotive retail 573   497   15  
Financial services 775   760   2  
Head office and eliminations (54)   (62)      
5 638   4 526   25  
Operating margin (%)
Logistics 5,4   5,5      
Car rental and tourism 10,0   10,6      
Distributorships 8,7   8,4      
Automotive retail 2,9   2,9      
Financial services 19,4   22,3      
Head office and eliminations            
7,0   7,0      

Imperial had an outstanding 2012 financial year. The group benefited from a strong new vehicle market in South Africa and an excellent performance by the logistics division, especially in Europe. Revenue and operating profit were up 25%. The group remains focused on generating strong returns which resulted in the return on average equity of the group for the year being 23% on a healthy financial position.

The group’s strong new vehicle unit sales resulted in strong growth being achieved in the distributorships, automotive retail and financial services divisions. Revenue in this cluster of retail-orientated businesses was up 22% and profit before tax increased by 23%.

The logistics division increased its revenue by 34%, and operating profit by 33%, of which the Lehnkering acquisition contributed for six months, accounted for 14% of the growth in both revenue and operating profit. While the international logistics division had an excellent year, the SA logistics division performed satisfactorily under tough trading conditions.

Revenue in the car rental and tourism division was up 15% due to good volume growth and improved rental rates. Operating profit improved by 8%.

The group operating margin of 7% was in line with the prior year. The distributorships division achieved an operating margin of 8,7% against 8,4% in the prior year and increased revenue by 29%. Automotive retail maintained its operating margin at 2,9%, with revenue up 14%. The operating margin in the combined southern African and European logistics business was in line with the prior year at 5,4%. While operating margins in Europe improved, margins in southern Africa were slightly lower. This was mainly due to tougher trading conditions and the inclusion of CIC for a full 12-month period versus eight months in the prior year. The car rental and tourism division margin dropped to 10,0% from 10,6% primarily due to a sluggish used car market and a challenging trading environment in the tourism business.

The financial services division achieved an operating profit of R775 million, which was slightly higher than the prior year. Revenue in the insurance business grew 11%, while the underwriting margin declined to 7,8% from 11,4%. Underwriting conditions in the shortterm insurance business were more difficult than the prior year where the underwriting result was exceptional. In contrast, the life assurance unit continued to perform well and achieved good growth. Insurance investment income was lower than the prior year, as a result of lower yields on interest-bearing investments and a volatile equity market over the period.

Operating profit from other financial services grew strongly and was up 52%. The operating profit in this segment is generated 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. These acquisitions include Jurgens, Beekmans, Midas, Turbo Exchange, Goscor, E-Z-GO and the newly acquired Datadot, Segway, Bobcat and access equipment businesses. In total, across the group, including NAC, these businesses contributed revenue of R7 billion and operating profit of R503 million, 16% and 23% respectively better than the prior period.

In aggregate, the group’s operating profit grew by 25%, and core earnings per share (core EPS) increased by 32%. 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.

Net finance costs increased by 23% to R681 million on higher debt, which was mainly incurred to fund the acquisition of Lehnkering. Despite the increase in net finance costs, interest covered by operating profit remains healthy at 8,3 times (2011: 8,2 times).

The increase in the minorities’ share of profit is largely attributable to the performance of the distributorships division in which a number of minority shareholders participate.

The effective taxation rate of 29% was in line with the statutory rate of 28%.

Income from associates increased by 35% from the prior year. Mix Telematics, in which Imperial holds a 28% interest, contributed R31 million and performed very well. The contribution from smaller associates also increased from the prior year.

Divisional operating margin – 2012 (%)
Divisional operating margin – 2012 (%)

Financial position and cash flow

Summarised statement of financial position

at 30 June


Intangible assets   4 234   1 823  
Investment in associates and joint ventures   889   770  
Property, plant and equipment   8 080   6 550  
Transport fleet and vehicles for hire   6 657   5 684  
Net deferred tax assets       112  
Non-current financial assets, investments and loans   2 675   2 657  
Net working capital   4 607   3 245  
Cash resources   3 545   3 531  
Total assets
  30 687   24 372  
Capital and reserves
Attributable to Imperial Holdings’ shareholders   14 666   11 973  
Non-controlling interests   1 223   1 043  
Total shareholders’ equity
  15 889   13 016  
Non-redeemable, non-participating preference shares   441   441  
Retirement benefit obligations   590   233  
Interest-bearing borrowings   9 747   7 508  
Insurance, investment, maintenance and warranty contracts   3 222   2 465  
Net deferred tax liabilities   177      
Non-current financial liabilities   348   323  
Net current tax liabilities   273   386  
Total liabilities
  14 798   11 356  
Total equity and liabilities
  30 687   24 372  

The total assets disclosed above increased by 26% to R31 billion due to strong organic growth and expansion of existing businesses and new acquisitions.

Intangible assets increased to R4,2 billion from R1,8 billion mainly due to the Lehnkering acquisition.

Net working capital increased by R1,4 billion from 30 June 2011. In June 2011, inventory levels were exceptionally low due to stock shortages, which have now been alleviated. Levels of imported vehicle stocks have improved and our ability to satisfy demand for the majority of our products has improved significantly. In addition, there has been an increased investment in stock and debtors to support higher revenue, especially in the motor businesses. Acquisitions also contributed to the increase in working capital. Despite a 25% increase in revenue, the net average working capital turn was maintained at 21 times as in the prior year.

Net debt to equity (excluding preference shares) at 39% was only slightly higher than the 31% at June 2011, despite a net R1,9 billion being spent on acquisitions in the current year, of which Lehnkering was the most significant. An additional R1,2 billion in net debt was also assumed by the group as a result of new acquisitions. The Lehnkering acquisition was effective from 2 January 2012 when payment was made. The net debt level is below the target gearing range of 60% to 80% and leaves significant room for further expansion of the group. The group’s liquidity position is strong with R6 billion in unutilised facilities.

Net debt/equity* (%)
Return on equity (based on core) (%)
Net debt/equity* (%)   Return on equity (based on core) (%)
* Including preference shares.    

Altogether 37% of the group’s debt matures within one year. This includes some R2,5 billion being the remaining portion of the Eurobond maturing in April 2013. The group has more than adequate cash resources as well as substantial unutilised bank facilities to its disposal of which some R2,7 billion is unutilised committed long-term facilities.

Of the group’s debt, 69% is at fixed rates which includes the R2,5 billion draw-down of the Euro-syndicated loan facility at a pretax rate of 3,8%. Excluding this transaction 44% of the remaining debt is at floating rates.

Shareholders’ equity increased due to the improved profitability and the weakening of the Rand which resulted in gains on cash flow hedges and the foreign currency translation reserve accounted for through the statement of comprehensive income.

New business written arising from maintenance and warranty contracts which were generated through the financial services division, on the back of strong vehicle sales, contributed to the robust growth of 31% to R3,2 billion in insurance, investment, maintenance and warranty contracts on the statement of financial position.

Summarised cash flow statement

30 June

Cash generated by operations before working capital 8 198   6 375   29  
Net working capital movements (758)   (298)      
Cash generated by operations before capital expenditure on rental assets 7 440   6 077   22  
Net finance cost and tax paid (2 203)   (1 784)   23  
Cash flows from operating activities 5 237   4 293   22  
Dividend received from Ukhamba 387          
Proceeds from Imperial Bank sale     477      
Net acquisition of subsidiaries and businesses (1 868)   (943)      
Expansion capex (including rental assets) (1 125)   (687)      
Net replacement capex (including rental assets) (1 467)   (841)      
Net movement in associates and JVs (94)   78      
Net movement in equities and loans (63)   (15)      
Cash flows from financing activities (1 632)   (1 395)      
Net (decrease)/increase in net debt (625)   967      
Free cash flow – total operations 3 770   3 452   9  
Free cash conversion (%)
125   132      

Despite an increase in working capital, cash generated by operations which amounted to R7,4 billion before capital expenditure on rental assets was 22% higher than the prior period. Financing costs and tax payments increased by 23%.

Capital expenditure on rental assets was higher than in the corresponding period, mainly due to the increase in the demonstration fleet in distributorships and higher demand by other car rental companies of our imported brands of vehicles, which are rented out through our financial services division.

Expansion capital expenditure was higher in the logistics division to fund future growth.

Net replacement capital expenditure was higher than the prior period as trading conditions warranted renewed replacement expenditure.

A net R1,9 billion was spent on the acquisition of subsidiaries and businesses during the year, with Lehnkering being the most significant.

The Imperial Capital bond (IC 02) with an issue value of R500 million was repaid during the year and it was decided to not issue any further notes under Imperial Capital’s DMTN programme and as such its credit rating was cancelled.

Moody’s has maintained the investment grade issuer credit ratings for Imperial Group (Pty) Limited and the bonds outstanding under its DMTN and commercial paper programmes. The ratings are as follows:

  • Domestic short-term credit rating P-1.za
  • Domestic long-term credit rating A2.za
  • International scale rating Baa3

Certain bank facilities as well as the Euro-syndicated loan facility have a debt covenant of net debt/EBITDA of 3.5:1. In addition, the Euro-syndicated loan facility has an additional covenant that requires the Net debt/EBITDA ratio of Imperial Group (Pty) Limited to be higher than that of Imperial Holdings Limited. As at the reporting period both these ratios were well within the required levels.


A final ordinary dividend of 380 cents per share (2011: 260 cents per share) has been declared. This brings the full dividend for the year to 680 cents per share (2011: 480 cents per share).

Expansion and acquisitions

Acquisitions during the period consisted of:

  • 100% of Lehnkering was acquired for an enterprise value of €270 million. Lehnkering is one of Europe’s leading fullservice specialist logistics companies that 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 chemical manufacturing services. The Lehnkering acquisition was effective from 2 January 2012. The acquisition was funded from new Euro-denominated banking facilities secured for a period of five years at a pre-tax interest rate of approximately 3,8%.
  • 74,9% of Dettmer Bulk Reederei, a dry bulk shipping business operating on the Rhine.
  • 70% of Datadot, a business that installs micro dots as a security identification system used in the detection of theft. Datadots are widely used to identify and protect motor vehicles, motorcycles, trailers, marine craft, home, business and personal assets.
  • 75% of Safari Centre, a vehicle accessories and outdoor equipment business which is complementary to Jurgens and furthermore also augments the dealership businesses that retail SUVs.
  • 60% of IJ Snyman Transport, a logistics service provider to leading retail, FMCG and construction companies in Angola, DRC, Namibia, South Africa and Zambia.
  • Acquired control and increased our shareholding to 80% in Transport Holdings in Botswana, which provides fuel transportation, mining consolidation and transport, general cross-border transportation and local distribution within Botswana.
  • 80% of Kings Transport, which specialises in the break bulk sector of the logistics market.
  • 70% of the shares in La Grange Transport, which specialises in the fresh fruit market in the Western Cape.
  • 60% of Synchronised Logistical Solutions, operating in the automotive logistics industry.
  • 60% of Segway SA, which imports and distributes electric personal transporters.
  • 67,5% of Bobcat, a leading supplier of compact equipment into the construction, mining and agricultural sectors.
  • Acquired an additional 20% and increased our shareholding to 60%, resulting in control of Accordian, which is a distributor of TATA vehicles.
  • 100% of Watts Truck and Van in the UK, a DAF truck dealer, which complements and strengthens our network in this brand in the UK.
  • 51% of Hi-Reach Manlift, a company that is now called Goscor Hi-Reach, which is the sole distributor in South Africa of the Genie range of mobile elevating work platforms, ‘cherry pickers’ and other related equipment.
  • 80% of Goscor Access Rental, through which products in Goscor Hi-Reach are rented.

Strategic objectives

The group remains focused on generating higher returns on capital, while still seeking growth opportunities in and adjacent to our existing industries and geographies to replicate and improve on our past successes. These growth initiatives will take place organically and through acquisition, partnerships and grassroots development.

The group has a strong position in logistics in South Africa and increasingly beyond South Africa’s borders into the rest of Africa. With Africa growing rapidly, we seek the expansion of our footprint on the continent, especially in businesses where our skills set, reputation and customer base can give us a head start.

The recent acquisition of Lehnkering is an example of our strategy of expansion in Europe, where we will focus on growth opportunities within our field of expertise while deepening our involvement in our core business.

The scale of our activities in the automotive retail market offers numerous opportunities for extending and maximising our position in the value chain. While Imperial has for long been in the forefront of exploiting opportunities in insurance, finance, warranties, maintenance and panelbeating, we have still not yet reached our full potential in this market. Our experience in this field stands us in good stead and will enable us to earn ever-increasing annuity income streams as our vehicle parc 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 has developed into a core business for Imperial. We have an excellent reputation in this activity and attractive opportunities regularly present themselves. We will continue to pursue these opportunities and would consider broadening our product range into other applications and industries such as engineering, industrial and mining products.

The car rental and tourism division operates in a market where we can find fewer opportunities for vertical or horizontal expansion. In this division we strive for improving the returns on capital through good asset and capital management.

Performance against previous commitments

  Management commitment     Delivery to date
  Deliver shareholder value through capital management, sustainable returns, cash generation and growth    
Return on equity = 23%
Return on invested capital = 16%
Core EPS growth = 32%
Free cash conversion ratio = 125%
Dividend per share up 42%
  Acquisitive growth in logistics in our core geographies    
International logistics
• 100% Lehnkering
• 74,9% Dettmer Bulk Reederei

Africa logistics
• 60% IJ Snyman Transport
• 80% Transport Holdings in Botswana (previously an associate)

South Africa logistics
• 80% Kings Transport
• 70% La Grange Transport
• 60% Synchronised Logistics Solutions
  Add more businesses that augment and are allied to our motorrelated activities    
• Acquired 70% of Datadot, a business that installs micro dots as a security identification system used in the detection of theft
• Acquired 60% Segway SA, which imports and distributes electric personal transporters
  Expand our distributorships division into the distribution of products which carry strong brands in industrial markets    
• Acquired 67,5% Bobcat, a leading supplier of compact equipment into the construction, mining and agricultural sectors
• Acquired 51% Hi-Reach Manlift (now called Goscor Hi-Reach), which is the sole distributor in South Africa of the Genie range of mobile elevating work platforms, ‘cherry pickers’ and other related equipment
• 80% Goscor Access Rental, through which products in Goscor Hi-Reach are rented
  Growing the annuity revenue streams that arise from a growing vehicle parc in the brands we exclusively distribute    
• Revenue from the rendering of services in distributorships up 44%
  Generate growing annuity earnings in other financial services on the back of new business being placed on its book in the current strong vehicle sales cycle    
• Operating profit in other financial services up 52%
  Invest in our people and their development    
• Investment in training and development – R171 million (2011: R116 million)
• Five modern technical academies and two new dedicated learning facilities open
• 610 participants in Technical Training Academy
  Unlock value for the beneficiaries in Ukhamba, our BEE shareholder    
• 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 which will serve as a valuable
endowment for education into the future
  Ongoing focus on reducing our environmental impact    
• A number of our businesses have received recognition for their environmental initiatives through a range of prestigious industry awards
  Focus on road safety    
• By August 2011, more than 72 000 individuals committed to being part of a movement towards safer roads in South Africa by taking the Imperial I-Pledge as part of our group’s extensive road safety campaign
• We sponsored vehicles to assist with law enforcement on the N3 over the festive seasons and saw accident fatality rates drop
• We also found that unaccompanied children on the roads are extremely vulnerable and therefore we staged road safety talks at schools and trained scholar patrols

Non-financial performance at a glance

  2012   2011  
People employed 47 699   40 898  
Salaries paid (Rm) 10 703   8 713  
Training expenditure (Rm) 171   116  
Donations to social responsibility causes (Rm) 46   36  
Distance travelled by our road fleet excluding rental vehicles (million kilometres) 487   463  
Employee fatalities 10   9  
Road accidents involving our fleet 963   1 050  
Volume spillages (kilolitres) 115,43   77,27  
Electricity purchased (million kWh) 164   155  
Fuel consumed (million litres) 271   248  
Biofuel consumed (million litres) 0,25   1,30  
CO2 emissions (tonnes) 1 072 636   1 010 925  

Developing our people

The group continues with its substantial investment in the development of employees at all levels and spent R171 million on skills development and training during the year.

To date 153 senior executives have completed a leadership 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 also includes the next level of management, with 74 having graduated during the past year. We have 139 participants currently enrolled in the programme.

A future talent pipeline is being nurtured through a graduate development programme which currently provides 108 university graduates with hands-on workplace experience and mentorship, providing insight into the Imperial culture and the practical skills required in business.

Our automotive Technical Training Academies are some of the largest providers of technical training in the South African market and provided training for over 610 technical apprentices during the year.

Our impact in society

During the year we continued to invest in our communities and made good progress in our journey towards greater environmental sustainability.

Our flagship community investment vehicle is the Imperial and Ukhamba Community Development Trust, which promotes effective learning and teaching at eight underprivileged schools serving 10 000 learners in Gauteng.

Since its establishment, Ukhamba has generated significant value from its investments. Ukhamba Trust owns 47% of Ukhamba and Ukhamba Community Development Trust owns 6%. A portion of the value created was 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, which will serve as a valuable endowment for education into the future.


The group’s performance during the year reflects the calibre and commitment of our people, and we thank all our employees for the contribution they have made during the year.

We also value highly the ongoing support shown by our suppliers, customers, partners and the public sector, and appreciate the input of board members and colleagues on the executive committee.

We would like to extend a special note of thanks to Tak Hiemstra, executive director, strategic development, who retires at the end of September 2012. In his 20 years of dedicated service to Imperial Holdings, Tak has played a key role as a member of the central leadership team and as an inspiring colleague to all of us. We look forward to his ongoing contribution as a non-executive director.


In the short term, we expect trading conditions in the southern African logistics division to remain challenging. The pressure on our manufacturing client base persists and volumes remain under pressure. In the medium to long term, the fundamentals of the logistics market are very good as customers outsource more of their activities to logistics specialists and expectations are that industry growth will exceed that of GDP. Given Imperial’s infrastructure and network, it is ideally positioned to capitalise on these growth opportunities and gain more business.

Expansion into Africa is a key priority and will continue to gain momentum. CIC will also play a key role in our African expansion into the fast-growing FMCG sector. Acquisitions in both South Africa and the rest of Africa will be a further growth driver.

The strong growth experienced in our international logistics division over the past three years has created a substantial base for further growth. The Lehnkering acquisition and the favourable terms of the financing arrangements will make a positive impact on the results for the coming financial year as it will make a contribution for the full year. Despite the economic crisis in Europe, we are positive about the medium-term prospects of our international logistics business. It is well positioned in attractive niches in the logistics industry in Germany and acquisitions could be a further growth driver. Our management in Germany continues to be vigilant in assessing the situation across Europe in order to be able to react to any significant developments that affect our related business and volumes.

In a competitive car rental market, we are focused on improving brand awareness and yield, while optimising our fleet size and managing costs even tighter. Used vehicle demand is expected to improve on the back of a weaker currency as the gap between the cost of new and used vehicles widens. Results from our tourism operations will continue to be affected by global economic conditions.

The growth rate of new vehicle sales in South Africa is expected to slow as the base is now substantially higher, however the recent reduction in interest rates will support demand. Despite the recent weakening of the currency, cars remain affordable as vehicle price increases lag inflation. The growth in the car parc of our brands will enable us to earn increasing annuity income streams from parts and service activities. Businesses that augment and are allied to our motor-related activities should also continue to grow.

The Autoparts business is not affected directly by new vehicle sales and should continue to perform solidly as initiatives to expand its product range and geographic footprint bear fruit. Goscor will continue performing well as it capitalises on a strong order book, growth in its rental business and after-sales maintenance opportunities.

While underwriting conditions are unpredictable, earnings in the financial services division should grow in the future. We have not yet reached our full potential in this market and there is still significant opportunity in this area of the group due to our positioning in the motor industry. Regent’s investment portfolio continues to be conservatively managed. LiquidCapital will continue leveraging its position by innovating new products and partnerships to create new sources of revenue and growth. It will generate growing annuity earnings on the back of new business being placed on its book in the current strong vehicle sales cycle.

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.

Hubert Brody
Chief executive officer

Hafiz Mahomed
Financial director
21 August 2012


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