Imperial Holdings Limited - Integrated Report 2014

Integrated Report 2014

Annual Financial Statements 2014

Sustainability Report 2014

	Definitions	2014 Rm	2013 Rm	2012 Rm	2011 Rm	2010 Rm
Extracts from statement of profit or loss
Revenue		103 567	92 382	80 830	64 667	53 438
Operating profit		6 185	6 090	5 638	4 526	3 288
Net financing costs		(926)	(744)	(681)	(554)	(597)
Income from associates and joint ventures		76	86	46	34	174
Income tax expense		(1 330)	(1 405)	(1 382)	(1 272)	(911)
Tax rate (%)		27,2	28,1	29,3	30,7	31,0
Profits attributable to non-controlling interest		(355)	(392)	(408)	(346)	(241)
Headline earnings attributable to ordinary shareholders		3 151	3 458	3 007	2 608	1 841
Extracts from statement of cash flows
Cash generated by operations (before capital expenditure on motor vehicles for hire, net financing costs and taxation paid)		5 689	7 191	7 440	6 077	4 376
Cash flow from investing activities (including capital expenditure on vehicles for hire)		(2 643)	(4 708)	(4 230)	(1 931)	(1 883)
Net debt (raised)/repaid		(1 972)	(2 250)	(625)	959	250
Free cash flow	1.	1 944	3 658	3 770	3 452	2 190
Extracts from statement of financial position
Total assets		59 021	51 716	45 698	36 533	34 223
Operating assets	2.	55 968	48 443	41 575	32 815	29 506
Operating liabilities	3.	22 802	21 174	18 046	14 495	12 750
Net working capital	4.	8 675	6 158	4 606	3 245	2 882
Net interest-bearing debt	5.	11 882	9 165	6 642	4 418	5 075
Imperial owners shareholders interest		17 540	16 241	14 666	11 974	11 140
Non-controlling interest		1 569	1 295	1 223	1 043	806
Contingent liabilities		317	294	46	61	201
Ratios
Efficiency
Revenue to average net operating assets (times)	6.	3,4	3,6	3,9	3,7	3,1
Revenue relating to sales of goods to average inventory (times)	7.	4,6	5,1	5,6	5,3	4,9
Revenue to average net working capital (times)		14,0	17,2	20,6	21,1	19,2
Profitability
Operating profit to average net operating assets (%)	8.	20,5	24,0	26,9	25,8	19,2
Operating profit to average gross operating assets (%)		11,8	13,5	15,2	14,5	11,3
Operating margin (%)	9.	6,0	6,6	7,0	7,0	6,2
Return on average ordinary shareholders interest (%)	10.	19,4	21,3	22,4	22,2	19,3
Return on invested capital (%)	11.	13,0	16,2	16,3	16,5	12,2
Weighted average cost of capital (%)	12.	9,1	8,8	9,7	10,1	10,5
Solvency
Interest cover by operating profit (times)		6,7	8,2	8,3	8,2	5,5
Net debt to EBITDA (times) (including preference shares)		1,4	1,1	0,9	0,7	1,1
Total equity to total assets (%)		30,7	33,9	34,8	35,6	34,9
Net interest-bearing debt as a % of total equity		65,6	52,3	41,8	33,9	42,5
Liquidity
Free cash flow to net profit for the year (times)		0,54	0,99	1,11	1,19	0,97
Free cash flow to headline earnings (times)	13.	0,62	1,06	1,25	1,32	1,19
Unutilised facilities (Rm)		6 703	5 880	6 045	8 000	6 358

	Definitions	2014	2013	2012	2011	2010
Investing in the future
Cost of new acquisitions (Rm)		911	776	2 241	1 178	581
Expansion capital expenditure (Rm)		1 763	1 682	1 125	687	963
Net replacement capital expenditure (Rm)		1 552	1 395	1 467	841	830
Capital commitments (Rm)		2 285	935	1 112	1 007	882
Statistics
Total new and used vehicles and motorcycles sold		208 740	206 462	198 131	168 661	149 247
Number of transport fleet vehicles (owned)		5 676	6 431	6 312	6 030	6 559
Number of vehicles for hire (car rental only)		15 356	17 602	16 599	17 026	18 015
Number of employees		51 671	51 007	47 699	40 898	35 968
Employee costs (Rm)		14 576	12 824	10 703	8 713	7 515
Wealth created per employee (Rm)		444	412	380	360	339
Total taxes and levies paid (Rm)	14.	1 748	1 438	1 572	1 543	1 054
Share performance
Basic headline earnings per share (cents)		1 625	1 805	1 566	1 370	976
Basic core earnings per share (cents)		1 815	1 872	1 623	1 234	962
Dividend per share (cents)		820	820	680	480	350
Earnings yield (%)	15.	8,1	8,6	9,1	11,3	11,4
Price earnings ratio (times)	16.	12,3	11,6	11,0	8,9	8,8
Dividend yield (%)		4,1	3,9	4,0	4,0	4,1
Net asset value per share (cents)	17.	9 037	8 324	7 479	6 137	5 529
Market prices (cents)
- Closing		20 000	20 968	17 200	12 125	8 580
- High		22 290	22 600	17 729	13 245	10 750
- Low		16 080	17 150	9 420	8 450	5 650
Total market capitalisation at closing prices (Rm)	18.	41 563	43 788	36 093	25 320	18 095
Value of shares traded (Rm)		43 446	51 766	30 099	26 937	22 964
Value traded as a percentage of average capitalisation (%)		102	130	98	124	151
Exchange rates used
Rand to Euro
– Average		14,07	11,43	10,38	9,49	10,59
– Closing		14,51	13,04	10,39	9,55	9,39
Rand to US Dollar
– Average		10,38	8,84	7,75	7,06	7,60
– Closing		10,62	10,01	8,20	6,70	7,66
Rand to Botswana Pula
– Average		1,17	1,09	1,05	1,07	1,14
– Closing		1,21	1,16	1,07	1,03	1,08
Rand to Australian Dollars
– Average		9,52	9,06	7,99	6,80	6,71
– Closing		9,96	9,01	8,40	6,57	6,56

Definitions:

1.	Free cash flow – calculated by adjusting the cash flow from operating activities to exclude the expansion capital expenditure on rental assets and deducting replacement capital expenditure on other assets.
2.	Operating assets – all assets less loans receivable, taxation assets, cash and cash equivalents and assets classified as held for sale.
3.	Operating liabilities – all liabilities less all interest-bearing borrowings, taxation liabilities and liabilities directly associated to assets classified as held for sale.
4.	Net working capital – consists of inventories, trade and other receivables, provisions for liabilities and other charges and trade and other payables.
5.	Net interest-bearing debt – include total interest-bearing borrowings plus non-redeemable preference shares less cash resources.
6.	Revenue to average net operating assets (times) – calculated by dividing revenue with average net operating assets.
7.	Revenue relating to sales of goods to average inventory (times) – revenue relating to sales of goods divided by average inventory.
8.	Operating profit to average net operating assets (%) – operating profit per the income statement divided by average net operating assets.
9.	Operating margin (%) – operating profit per the income statement divided by revenue.
10.	Return on average ordinary shareholders’ interest (%) – net profit attributable to owners of Imperial divided by average shareholders’ interest (calculated by using the opening and closing balances) attributable to Imperial Holdings’ shareholders.
11.	Return on invested capital (%) – return divided by invested capital. Return is calculated using profit after taxation and share of non-controlling interest, increased by the after tax effects of net finance costs and exceptional items. Invested capital is a 12-month average of shareholders equity plus preference shares plus debt (interest-bearing borrowings long term and short term minus long term loans receivable) minus non-financial services cash and cash equivalents.
12.	Weighted average cost of capital (%) – calculated by multiplying the cost of each capital component by its proportional weight and then summing, therefore: WACC = (after tax cost of debt % multiplied by average debt weighting) + (cost of equity multiplied by average equity weighting)
13.	Free cash flow to headline earnings ratio – free cash flow divided by headline earnings.
14.	Total taxes and levies paid – made up of SA normal taxation, secondary taxation on companies, foreign taxation, rates and taxes, skills development and unemployment insurance fund levies.
15.	Earnings yield (%) – the headline earnings per share divided by the closing price of a share.
16.	Price earnings ratio (times) – the closing price of a share divided by the headline earnings per share.
17.	Net asset value per share – equity attributable to owners of Imperial divided by total ordinary and preferred ordinary shares in issue net of shares repurchased (the deferred ordinary shares only participate to the extent of their par value of 0,04 cents.)
18.	Total market capitalisation at closing prices (Rm) – total ordinary shares in issue before treasury shares multiplied by the closing price per share

Five-year review