Highlights |
Continued expansion into other African
countries will position Imperial to take
maximum advantage of the considerable
opportunities presented by the growth of
African economies supported by a growing
middle class.
The group also reached an important
transformation milestone – over 50%
of management in junior to senior
positions in total are now black, which
demonstrates Imperial’s commitment to
the transformation ethos. |
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Financial performance
During a year in which economies across the world continued to
grapple with the lingering effects of the global economic slowdown,
Imperial has confirmed its strength and sustainability through a
solid and pleasing set of financial results.
Recovery remained elusive in European markets and for the first
time since the onset of the global financial crisis, we have seen a
slowdown in the German economy. This made for tougher trading
conditions in our international logistics operations. However, the
business benefited from exports out of Germany into growth
markets outside Europe.
South Africa experienced a challenging year as well. Industrial
action, both locally and in South Korea, affected the logistics and
automotive sectors as our ability to supply services and products to
our customers was disrupted. The year also saw slower growth in
the motor vehicle market while volumes and pricing in the logistics
industry came under pressure as various sectors of the South
African economy struggled to gain momentum. Competition in the
car rental industry remains fierce. Financial Services showed good
growth due to an increase in vehicle sales and a growing car parc
over the past number of years. We were well rewarded for our
efforts to expand into consumer markets in the rest of the African
continent leading to a good performance from those businesses.
Foundations for future growth
Under tough trading conditions, Imperial’s ability to deliver
excellent returns and real value to shareholders is a testament to the strength of its portfolio in which each business is headed by a
highly competent team. We are well positioned as niche players
in growing logistics markets in Europe, and are investigating
interesting growth opportunities in South America and Eastern
Europe. As more and more companies follow the global trend
towards outsourcing, the international logistics market is set to
grow and Imperial is ideally placed to reap the rewards of having
established a solid presence in a number of geographies.
We have also laid the foundations for promising growth on the
African continent, and during the year added to our already extensive
footprint through two key acquisitions. Continued expansion into
other African countries will position Imperial to take maximum
advantage of the considerable opportunities presented by the
growth of African economies supported by a growing middle class.
In a report published this year entitled “The rise and rise of the
African middle class”, Deloitte & Touche point out that Africa now
has the fastest growing middle class in the world. Based on the
current growth trajectory, estimates are that the African middle
class will grow to 1,1 billion by 2060. Seven of the 10 fastest
growing economies in the world are in Africa, with economic
growth rates in sub-Saharan African countries averaging around 5%
a year. Imperial’s African logistics growth strategy targets consumer
markets, among others, and will further ensure that the group is
diversified. As Imperial continues to grow through acquisition,
investors and shareholders can take comfort in the company’s
stringent due diligence processes. It has sound acquisition criteria
which have resulted in new acquisitions making an immediate and direct contribution to the bottom line. The group has also
utilised favourable funding markets very effectively to acquire new
international operations.
The strategic priorities of the group have been well articulated and
are continually communicated to our stakeholders. The use of cash
generated by our Automotive businesses to grow our exposure in
the logistics industry is also proving to be a very effective approach
to the growth and balance of Imperial’s portfolio.
Developing our people
Imperial’s people play a central role in ensuring that the group
reaches its strategic and growth objectives. The group continued to
invest in its ongoing development in the year under review.
The group also reached an important transformation milestone
– over 50% of management in junior to senior positions in total
are now black, which demonstrates Imperial’s commitment to the
transformation ethos. It is also pleasing to see the plans put in
place some years ago now coming to fruition, as demonstrated
by the achievement of this milestone. Top management positions
continue to receive special attention from a transformation point
of view.
This year R175 million was invested into training and development
of staff across various levels in the group. Throughout all operations,
there are programmes in place that offer employees the opportunity
to grow their skills and fast track their career development. This in
turn supports the group’s strong culture of promoting from within.
Protecting the environment
On the environmental front Imperial continues to make huge
strides. The management and reporting system for non-financial
data, successfully piloted and rolled out to the group, has allowed
for consistent reporting across all operations. Importantly, it has
contributed to the development of a group-wide view of Imperial’s
footprint across a range of environmental indicators.
Understanding this picture is the first step towards implementing
large-scale interventions that can reduce the group’s carbon
footprint. One example is our recently opened solar powered
Kia dealership, a world first. This project is a prime example of
how environmental responsibility can also be commercially
viable. All divisions in the group are encouraged to establish such
flagship projects.
The transport industry emits approximately 10% of South African
carbon emissions, and hence it is critical that the group takes a
leadership role in environmental matters. We are therefore proud
that the CEO of our African Logistics division was recently awarded
the inaugural Nedbank Capital Sustainability prize in the Leadership
category in recognition of his role in promoting environmental
sustainability in African supply chains.
Our logistics vehicles travel 495 million kilometres per annum and
it is inevitable that they would be involved in accidents, which are
sometimes fatal. Tragically the group lost nine staff members due
to accidents. We endeavour to continuously improve the group’s
safety record and will pursue specific further driver safety and
monitoring methods that have been identified and which we hope
can limit fatalities.
Investing in our communities
The group continued to grow its community investment programmes
and I was particularly encouraged to see the ongoing impact being
made by the Imperial and Ukhamba Community Development Trust
in local community schools.
The programme represents a true partnership between the Trust,
the Provincial Department of Education and beneficiary school
bodies. Herein lies its strength and the reason it is hailed as a
possible blueprint for successful literacy and numeracy interventions
in other schools.
Imperial is committed to playing a role in the broader South
African society and continued its work in the I-Pledge Road Safety
Campaign. The campaign has grown to attract 135 000 pledges and
the company has rolled out further road safety initiatives focusing
on scholar patrols at local schools. This work is an example of the
way in which Imperial embraces the opportunity to go beyond
compliance and invest in the greater good of society, particularly in
areas closely aligned to its core business.
A commitment to sound corporate governance
Imperial is committed to the highest international standards of
corporate governance, transparency and ethical business practice.
The company has applied the recommendations of King III and
the Listings Requirements of the JSE in compiling this integrated
annual report.
Appreciation
I would like to take this opportunity to extend my thanks, on behalf
of the board, to Hubert Brody and his executive team, and to all
Imperial employees who have played a fundamental role in the
company’s success during the year.
I further extend my gratitude to Hafiz Mahomed who retired as chief
financial officer on 30 June 2013. His financial expertise, infinite
wisdom, and dedicated service to Imperial over a period of 31
years, has been invaluable in helping to charter the group’s course
to success. He will be succeeded by Osman Arbee, into whose
capable hands the baton has been passed during a six-month
handover period. I know I speak for the board and the executive
team when I wish Hafiz a happy, much-deserved retirement and
Osman every success in his new role.
I also want to thank Santie Botha who has resigned from the board
with effect from 5 September 2013 due to other commitments.
Santie made a valuable contribution to the board and also as a
member of the remuneration and nomination committee and
Imperial’s African Logistics divisional board.
Finally, I wish to thank my fellow members of the board who have
continued to provide unfailing support and insight to the group.
Thulani S Gcabashe
Chairman
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