> Total revenue and operating profit for the Imperial Group grew 8% to R118,8 billion and 3% to R6,4 billion respectively, supported by the inclusion of the Imres and S&B Commercials acquisitions for the full year, and strong performances from the Vehicle Import, Distribution and Dealerships division and the Logistics Rest of Africa sub-division.
> Revenue and operating profit from continuing operations, excluding Regent, was up 8% to R115,7 billion and 4% to R5,9 billion respectively.
> The Group’s operating margin from continuing operations remained stable at 5,1%.
> Foreign revenue increased 23% to R49,7 billion (42% of Group* revenue) and foreign operating profit increased 18% to R2,2 billion (36% of Group* operating profit).
> Non-vehicle revenue increased 8% to R47,9 billion (40% of Group* revenue) and operating profit remained flat at R2,5 billion (42% of Group* operating profit).
> A full reconciliation from earnings to headline earnings and core earnings is provided in the Group Financial Performance section.
> Cash flow from operating activities before capital expenditure on rental assets was R4,8 billion from R6,6 billion in the prior year.
> Net working capital from continuing operations increased 7% to R9,9 billion compared to the prior year, despite an 8% increase in turnover and the higher increase in the Rand cost of imported vehicles, which increased the carrying value of inventory.
> The net debt to equity ratio (including preference shares as equity) increased from 66% in June 2015 to 73% at year-end (76% at December 2015).

* Excluding Regent, head office and eliminations. Motor Related Financial Services now included in Vehicles.


In April 2016 the IMF lowered its global growth forecasts for 2016 to 3,2% and 3,5% for 2017. With a footprint in more than 30 countries on 5 continents, Imperial is affected by global and local economic conditions.

South Africa
The economy has tightened and the trading environment remains challenging in South Africa, where R66 billion or 58% of Group revenue and R3,7 billion or 64% of Group operating profit was generated in the 12 months to June 2016. National GDP growth forecasts have been lowered to 0,1% in 2016 and 1,0% for 2017.

Specific factors that affected Imperial during the financial year were: a 27% decline in the average R/$ exchange rate; an 8% decline in national new vehicle sales; a sharp decline in commodity, chemical and fuel volumes; declining consumer confidence and rising interest rates that depressed personal consumption expenditure and consumer goods volumes.

Rest of Africa
Falling commodity demand, lower oil prices and the consequent impact on currencies and private consumption have reduced the growth rate in the Rest of Africa, where R13,3 billion or 11% of Group revenue and R853 million or 14% of Group operating profit was generated in 2016. The weakness of the Rand also assisted results.

Specific factors that affected Imperial during the financial year were: slowing growth rates, and currency volatility and devaluation.

Against this background we provide shareholders with current information on the Group’s strategy and performance.

Eurozone and United Kingdom (UK)
A slow economic recovery continued and trading conditions were satisfactory in the Eurozone, where R36,4 billion or 31% of Group revenue and R1,3 billion or 22% of Group operating profit was generated in 2016.

Specific factors that affected Imperial during the financial year were: low water levels that depressed the profitability of inland shipping in the first half; solid UK economic growth; and the weakening of the Rand against the Pound and Euro, which assisted Rand denominated results for the UK and Eurozone businesses.


Imperial strives to create long term value for stakeholders through strategic clarity, financial discipline, operational excellence and strictly defined capital allocation principles.

Notwithstanding current environmental challenges, Imperial’s investment thesis remains unchanged and steady progress as detailed below is being registered with each of the following five capital allocation objectives:

1. To release capital and sharpen executive focus, by disposing non-core, strategically misaligned, underperforming or low return on effort assets.
> Although certain transactions are still subject to regulatory approval, businesses and assets to the value of R5,2 billion have been disposed. R2,4 billion cash had been received by year end.
> Over the next twelve to eighteen months the Group intends disposing of mainly non-strategic properties (sale or sale and leaseback) in a number of unrelated transactions in various jurisdictions amounting to R2,6 billion.
2. We will invest capital in South Africa to maintain the quality of assets and market leadership in our logistics and motor vehicle businesses.
> Various acquisitions have been made, the most notable being the 10% minority in AMH for R750 million, and a further 14% minority in Midas for R112,5 million.
> In addition, R2,6 billion of capital was invested in South Africa in continuing operations.
3. We will invest capital in the Rest of Africa primarily to achieve our 2020 objective for the revenue and profits generated in that region to equal that of our South African logistics business, and secondarily to expand our vehicle businesses in the region.
> Two small companies were acquired for R37 million.
> Vehicle distribution agreements were concluded in 6 African countries.
> Capital of R416 million was invested to sustain the high organic growth rate.
4. We will invest the cash generated from operations and divestments to grow our businesses beyond the continent, but with an emphasis on logistics.
> Logistics acquisitions included Van den Anker in Netherlands, a further 10% investment in Imres (Netherlands-based) in which we now own 80% and post year-end we acquired 95% of Palletways for £155,1 million (R3,0 billion).
> Humberside Tail Lifts was acquired by our UK commercial vehicle business
> Capital of R1,1 billion was invested outside of Africa, mainly in logistics in Europe and South America.
5. The development and sustainability of Imperial will be underpinned by investment in human capital and information systems.
> Group wide investments in human capital development and information systems amounted to R500 million.


Logistics Africa

  % change
on HY1
  % change
on HY2
  2016   2015   % change
on 2015
Revenue (Rm) 13 714   3   13,405   11   27 119   25 347   7  
Operating profit (Rm) 802     728   (8)   1 530   1 587   (4)  
Operating margin (%) 5,9       5,5       5,6   6,3      
Return on Invested Capital (%)                 11,3   13,3*      
Weighted average cost of capital (%)                 10,0   8,3*      

* Restated to new calculation method. See glossary of terms.

In South Africa, challenging trading conditions continued to put pressure on the division’s revenue and profitability due to soft volumes particularly in the manufacturing, commodities, fuel and chemicals sectors. This was partially offset by new contract gains and pleasing performances from Resolve, Imperial Managed Solutions and Imperial Health Sciences. While revenue was up 7%, operating profit declined 4%.

The industrial logistics businesses servicing the manufacturing, commodities, chemicals, fuel and construction industries continued to experience declining volumes, which depressed revenue growth and operating profits.

The consumer logistics businesses recorded revenue growth but operating profit was depressed. This was due mainly to a new systems implementation, a competitive environment and the underperformance of the Cold Logistics business resulting from under-utilisation of its facilities as customers experienced lower demand.

Despite the challenging market conditions in South Africa, the business will continue to invest in people, capabilities and assets that will help deliver the required returns for the group’s shareholders. With a more asset-light strategy and a renewed focus on customers’ needs and relationship development, the business will add further impetus to its drive to develop customised solutions to better service clients and improve their efficiencies.

The division’s operations in the Rest of Africa continued to perform strongly, with revenue and operating profit growing by 19% and 23% respectively, despite challenging trading conditions that worsened in the second half of the year. Operating profit at R780 million exceeded that of the South African logistics business for the first time. This performance was supported by volume growth, the contribution of our businesses in the pharmaceuticals sector, and the inclusion of Imres for the full 12 months. The sub-division continues to expand in sub-Saharan Africa by leveraging its asset-light managed logistics capabilities and extending its focus from traditional road transport to include cross-border and international logistics services and warehousing operations. Expansion into new markets and partnerships with new principals during 2016 continued to deliver favourable results. The strategy to be a significant provider of consumer goods and pharmaceutical products routes-to-market in Southern, East and West Africa is on track with acquisitions performing in line with or ahead of expectations.

Net capital expenditure of R880 million was incurred (2015: R1,0 billion) in the Logistics Africa division, mainly attributable to the transport fleet and property investments.

Logistics International

  % change
on HY1
  % change
on HY2
  2016   2015   % change
on 2015
Revenue (Rm) 10 306   7   10 487   11   20 793   19 071   9  
Operating profit (Rm) 397   3   616   8   1 013   958   6  
Operating margin (%) 3,9       5,9       4,9   5,0      
Return on Invested Capital (%)                 9,8   10,7*      
Weighted average cost of capital (%)                 6,7   6,4*      
Revenue (Euro million) 688   2   610   (15)   1 298   1 391   (7)  
Operating profit (Euro million) 27     36   (16)   63   70   (10)  
Operating margin (%) 3,9       5,9       4,9   5,0      

* Restated to new calculation method. See glossary of terms.

On the 1st July 2015 the business was restructured into two divisions focussing its service offerings: Imperial Transport Solutions and Imperial Supply Chain Solutions. This has improved visibility and clarity for its client base, and together with a centralised sales capability, has already resulted in contract gains, with opportunities for simplification and cost reduction being exploited.

Logistics International’s revenue and operating profit in Euros declined 7% and 10% respectively, due mainly to strategic disposals (largely Neska and Rijnaarde). However, adjusted for disposals and acquisitions, the division’s Euro revenues and operating profit both increased by 4%. Other factors impacting the results were slow economic growth which suppressed volumes, increased labour costs in certain of the automotive sites we serve and an unusually long period of low water levels on European waterways in the first half. This was offset by contract gains and a growing contribution from the South American inland shipping business. The weakening of the Rand against the Euro assisted the Rand-denominated results.

Net capital expenditure of R1,0 billion (2015: R1,2 billion) was incurred on additional capacity for the chemical manufacturing business and two additional convoys commissioned during the year to meet the growing demand for inland waterway transport on the Rio Parana in South America. This business now utilises five push boats with 60 barges, some redeployed from Europe, with two additional push boats with 24 barges expected to be commissioned later this year. The success of this business is evidence of the division’s ability to transfer core capabilities to new markets.

Vehicle Import, Distribution and Dealerships

  % change
on HY1
  % change
on HY2
  2016   2015   % change
on 2015
Revenue (Rm) 14 590   2   13 883   6   28 473   27 437   4  
Operating profit (Rm) 532   15   617   24   1 149   960   20  
Operating margin (%) 3,6       4,4       4,0   3,5      
Return on Invested Capital (%)                 7,2   6,4*      
Weighted average cost of capital (%)                 10,0   9,1*      

* Restated to new calculation method. See glossary of terms.

Notwithstanding extremely challenging trading conditions and lower vehicle sales volumes during the year, revenue and operating profit increased by 4% and 20% respectively, resulting in an improved operating margin of 4,0%.

The improved performance was seen in all three of our major exclusive imported brands (Hyundai, Kia and Renault). This was attributable to an expeditious trade off of volume and margin, with the latter enhanced by assistance from OEM’s, price increases and prudent currency hedging strategies.

Although the Rand was weaker against the Euro and more so against the US Dollar, the division achieved increased profitability on Euro-based products in the first half. Forward cover on the US Dollar and Euro imports currently extends to April 2017.

In South Africa, the division retailed 81 930 (2015: 89 925) new and 38 418 (2015: 36 614) pre-owned vehicles during the year. The division’s South African new vehicle registrations as reported to NAAMSA were 9% lower than the previous year.

Annuity revenue streams generated from after-sales parts and service contributed positively with revenue up 4%. The growing vehicle parc of the imported brands (over 1 million) is delivering good levels of after-market activity for the dealerships.

The newly established African operations contributed positively.

The Australian operations returned a strong performance off a low base, driven by increased unit sales due to the introduction of new brands and the establishment of the multi-franchise model.

Net capital expenditure amounted to R1,3 billion (2015: R1,2 billion) as a result of additional vehicles leased to car rental companies and increased investment in IT infrastructure.

Vehicle Retail, Rental and Aftermarket Parts

  % change
on HY1
  % change
on HY2
  2016   2015   % change
on 2015
Revenue (Rm) 20 790   11   20 255   8   41 045   37 547   9  
Operating profit (Rm) 801     876   8   1 677   1 677    
Operating margin (%) 3,9       4,3     4,1   4,5      
Return on Invested Capital (%)                 14,7   15,2*      
Weighted average cost of capital (%)                 11,0   9,6*      

* Restated to new calculation method. See glossary of terms.

The division delivered a pleasing result with 9% revenue growth, while maintaining operating profit in challenging trading conditions.

In South Africa, the passenger and commercial vehicle divisions retailed 26 624 (2015: 30 641) new and 32 356 (2015: 31 484) pre-owned vehicles during the year. The division’s pre-owned to new vehicle ratio continues to increase, consistent with the tightening economy and in line with the broader market.

South Africa’s passenger, medium commercial, heavy commercial and extra heavy vehicle markets experienced a reduction in new retail unit sales in line with the market. As a result, both revenue and operating profit in this business declined, exacerbated by the sale of two commercial dealerships to Lereko Motors, an associate BEE company. After sales parts and services increased operating profit by 4% from both price and volume increases as a result of the strong new vehicle sales in the past three years.

The United Kingdom commercial vehicle market continued to grow strongly with the truck market up 11% and the light commercial vehicle market up 3%. Results were supported by this market growth, the inclusion of S&B Commercials for 12 months and the recent acquisition of Humberside Tail Lifts which is included for 8 months. A weaker Rand enhanced the growth in Rands.

During the year car rental, Auto Pedigree (pre-owned vehicle dealerships) and panel shops were placed under a single management team to facilitate integration throughout the car rental, accident repair and resale value chain. Car rental increased its revenue and market share, supported by contract gains, despite a challenging and competitive operating environment. Operating profit was adversely impacted by higher accident costs and lower profit on disposal of the fleet compared to the prior year. Pre-owned unit sales grew by 4% despite higher interest rates and fragile consumer sentiment. Panel shops profitability was positively impacted by the disposal of two loss-making outlets and higher car rental repair volumes.

The Aftermarket Parts business performed to expectation through improved revenue and flat operating profit. The Leisure business’ performance was hampered by a fire in the factory early in the financial year, although adequately insured.

Net capital expenditure of R779 million was incurred (2015: R844 million) largely on vehicles for hire and property development.

Financial Services

  % change
on HY1
  % change
on HY2
  2016   2015   %
Motor Related Financial Services                            
Revenue (Rm) 801   22   833   8   1 634   1 429   14  
Operating profit (Rm) 336   9   333   (5)   669   620   8  
Operating margin (%) 42,0       40,0       40,9   43,4      
Insurance (discontinued operations)                            
Revenue (Rm) 1 565   6   1 546   3   3 111   3 034   3  
Operating profit (Rm) 274   52   255   (30)   529   564   (6)  
Adjusted investment income (Rm) 120   38   71   (41)   191   208   (8)  
Adjusted underwriting result (Rm) 244   47   258   (18)   502   479   5  
Reversal of depreciation from being held for sale (Rm)         44       44       100  
Intergroup eliminations (Rm) (90)   23   (118)   110   (208)   (123)   41  
Operating margin (%) 17,5       16,5       17,0   18,6      
Underwriting margin (%) 15,6               16,1   15,8      

Despite lower vehicle sales, the Motor Related Financial Services business grew revenue and operating profit by 14% and 8% respectively. Innovative new products and channels have improved retention and penetration rates. During the year, funds and policies held under service, maintenance, roadside assistance and warranty plans were maintained. The book growth and returns from the alliances with financial institutions was tempered due to increased impairment provisions and challenging economic conditions.

Regent is currently held for sale, subject to regulatory approvals. During the year Regent’s underwriting result increased by 5% due mainly to the group administration fees no longer being charged from the date of Regent’s reclassification as a discontinued operation. Investment income decreased by 8% due to a decline in equity markets.

On consolidation, the intergroup eliminations have increased due to the reversal of a higher profit participation in the cell captives by the group and, as no administration fees were charged, there is no requirement to reverse administration fees in the current year.

The underwriting performance in Regent’s short term business continued to benefit from more effective risk management resulting in improved loss ratios in the heavy commercial vehicle business. New business penetration of motor related value added products remained under pressure due to declining vehicle sales. Regent Life grew new business volumes. Regional business beyond South Africa remained a meaningful contributor to the division.

We continue to focus on growing the leasing business via Imperial Fleet Management and Ariva (Private leasing alliance) and building synergies within the retail motor divisions to leverage scale for our customers.

Net capital expenditure of R228 million was incurred in the Motor Related Financial Services division (2015: R649 million), due mainly to vehicles for hire.


Our strategy to dispose of non-core, strategically misaligned, underperforming or low return on effort assets gained momentum during the financial year. The disposals described below, some still subject to regulatory approval, will generate proceeds of approximately R5,2 billion, which will reduce debt until redeployed in accordance with our strategic and investment criteria. R2,4 billion has been received to date.

On 29th September 2015 we announced the disposal of Imperial’s 100% interest in the Regent Group. Imperial accepted an offer from the Hollard Insurance Group and Yellowwoods Group (the umbrella holding company of Hollard), to acquire the Regent Group, Regent Botswana and Regent Lesotho for a purchase consideration of R2,2 billion.

The transaction has been approved by the Botswana competitions authorities. Conclusion of the transaction is now subject to regulatory approval from the South African and Lesotho authorities.

The disposal of the 65% interest in Neska to Häfen und Güterverkehr Köln (‘HGK’), the Port Authority in Cologne, Germany, for a total consideration of EUR 75 million (R1,3 billion) including loan repayments, was finalised on 11th December 2015.

Neska, a leading player in inland port operations in Europe, was facing growing competition and disintermediation from landlords (port owners). As a result, Neska’s growth prospects under Imperial’s ownership were limited.

Goscor group
The disposal of the Group’s 67,5% share of the Goscor group to management for a total consideration of R1,03 billion including loan repayments was finalised on 5th February 2016.

Goscor, a former subsidiary of our Vehicle Import, Distribution and Dealership division, is an importer and distributor of industrial equipment, which we regard as non-core to Imperial’s logistics and vehicles businesses.

During the year, the Vehicle Retail, Rental and Aftermarket Parts division disposed of two panel shop outlets and two commercial dealerships were sold to Lereko Motors, an associate BEE company. The division also sold 6 dealerships: Honda Zambezi, Lindsay Saker Hyde Park, Rivonia and Krugersdorp, Mitsubishi Bryanston and Mitsubishi/Hyundai in Kimberley.

Imperial Logistics International sold its 75% stake in ALS, a small shipping company, to the minority founder manager shareholders for EUR6 million (R84 million). The transaction was finalised on 27th January 2016.

In May 2016, the disposal of Imperial’s minority stake in MixTelematics for R470 million was announced by MixTelematics, the proceeds from which are due to be received by 30th August 2016.

Over the next twelve to eighteen months the Group intends disposing of mainly non-strategic properties (sale or sale and leaseback) in a number of unrelated transactions in various jurisdictions amounting to R2,6 billion.


During the 2016 financial year, various acquisitions were made, the most notable of which are listed below.

Imperial acquired the 10% minority in the AMH Group for R750 million, which was settled through an issue of Imperial shares and cash.

Imperial acquired a further 14% in Midas in its Vehicle Retail, Rental and Aftermarket Parts division during the year for R112,5 million.

Other acquisitions

> 100% of Teamcar, Maxifren, Fairdeal by Midas in South Africa
> 100% of Axnosis by Resolve in South Africa
> 70% of Imperilog Botswana
> 100% of Van den Anker by Logistics International (Netherlands)
> 100% of Humberside Tail Lifts by Vehicle Retail, Rental and Aftermarket Parts division (UK Commercial vehicles)
> A further 10% of Imres was acquired by Logistics Africa (now 80% owned)


Imperial Mobility International B.V., a wholly-owned subsidiary of Imperial, acquired 95% of Palletways Group Limited, a leading European operator in the express small consignment palletised freight market, for R3,0 billion (£155,1 million) which was settled through existing unutilised foreign credit facilities. The loan portion is hedged in Pound Sterling. The transaction became effective on 5th July 2016.

Sasfin Premier Logistics
Logistics Africa acquired a 70% stake in Sasfin Premier Logistics. The deal was finalised on 6th July 2016.

Remaining 10% in Midas
A further 10% was acquired in Midas post year end. The group now owns 100% of Midas.


Disposal of small entities in AMH
The Group disposed of 51% (control) in 10 entities in the AMH Group to a related party for R75 million, subject to regulatory approval. The balance of the shares in these entities will be sold in the next calendar year.



R million
% Change
% Change
Revenue 118 849   115 738   3 111   110 487   107 453   3 034   8   8  
Operating profit 6 422   5 893   529   6 235   5 671   564   3   4  
Operating margin (%) 5,4   5,1   17,0   5,6   5,3   18,6          
Net finance costs (1 440)   (1 440)       (1 194)   (1 194)       21   21  
Income from associates 133   133       32   33   (1)   316   303  
Profit before tax 4 437   3 924   513   4 599   4 044   555   (4)   (3)  
Tax (1 229)   (1 049)   (180)   (1 213)   (1 035)   (178)   1   1  
Net profit after tax 3 208   2 875   333   3 386   3 009   377   (5)   (5)  
Attributable to non-controlling interests (159)   (128)   (31)   (332)   (274)   (58)   (52)   (53)  
Attributable to shareholders of Imperial 3 049   2 747   302   3 054   2 735   319      
Return on Invested Capital (%) 12,4           13,1*                  
Weighted average cost of capital (%) 10,2           9,0*                  

* Restated to new calculation method. See glossary of terms.

Total revenue increased by 8% to R118,8 billion (6% up excluding acquisitions) and for continuing operations (excluding Regent) by 8% to R115,7 billion.

Total operating profit increased 3% to R6,4 billion (1% up excluding acquisitions) and for continuing operations (excluding Regent) up by 4% to R5,9 billion. The increase in operating profit was due mainly to solid performances from the Vehicle Import, Distribution and Dealerships division and the Logistics Rest of Africa sub-division, which was assisted by the inclusion of Imres for a full year. S&B Commercials in the Vehicle Retail, Rental and Aftermarket Parts division was also included for a full year.

Group operating margin, including discontinued operations, was slightly down at 5,4% (2015: 5,6%).

Net finance costs increased by 21% compared to the prior year on the back of increased debt levels and higher interest rates.

Income from associates and joint ventures for continuing operations increased by R100 million on the prior year. This increase is as a result of a loss of R84 million recognised in respect of Ukhamba in the prior year.

The effective tax rate of 27,7% for continuing operations increased from 25,8% in 2015 due mainly to the increase in goodwill impairments which are not tax deductible.

The Group’s net profit attributable to non-controlling shareholders for continuing operations reduced by R146 million due to their share of impairment of intangibles, reduced minority participation in Associated Motor Holdings and the sale of businesses in which the minorities participated.

Reconciliation from Earnings to Headline and Core Earnings:

R million
2016   2015   % change
on 2015
Net profit attributable to Imperial shareholders (earnings) 3 049   3 054    
Profit on disposal of assets (98)   (85)      
Impairments of goodwill and other assets 526   95      
Profit on sale of businesses (520)   (17)      
Impairment losses on assets of disposal group 90          
Other 2   84      
Tax and non-controlling interests (3)   4      
Headline earnings 3 046   3 135   (3)  
Amortisation of intangibles 437   415      
Foreign exchange gain on intergroup monetary items (92)   (104)      
Re-measurement of contingent consideration, put option liabilities and business acquisition costs 117   69      
Tax and non-controlling interests (139)   (128)      
Core earnings
3 369   3 387    

Earnings, Headline Earnings and Core Earnings per Share

% Change
% Change
Basic EPS 1 581   1 425   1 582   1 416     1  
Basic HEPS 1 579   1 423   1 624   1 458   (3)   (2)  
Basic Core EPS 1 747   1 589   1 754   1 586      

Financial position

R million
2016   2015   % Change  
Goodwill and intangible assets 7 501   7 193   4  
Property, plant and equipment 11 465   10 967   5  
Investment in associates and joint ventures 986   1 351   (27)  
Transport fleet 5 953   5 610   6  
Vehicles for hire 3 469   3 603   (4)  
Investments and loans 291   357   (18)  
Net working capital 9 936   9 267*   7  
Other assets 1 867   1 428   31  
Assets classified as held for sale 6 552   4 618   42  
Net debt (16 079)   (13 886)*   16  
Non-redeemable non-participating preference shares (441)   (441)    
Other liabilities (8 584)   (8 121)   6  
Liabilities directly associated with assets classified as held for sale (3 114)   (2 713)   15  
Total shareholders’ equity
19 802   19 233   3  
Total assets 69 830   65 712   6  
Total liabilities (50 028)   (46 479)   8  

* Restated to reclassify interest-bearing supplier liabilities as accounts payable of R607 million.

Goodwill and intangible assets rose by 4% to R7,5 billion as a result of Rand weakness and small acquisitions.

Property plant and equipment increased by R498 million to R11,5 billion due mainly to investments in properties during the year.

Investment in associates and joint ventures decreased by R365 million, as a result of the reclassification of MixTelematics to “assets classified as held for sale”.

The transport fleet increased by 6% or R343 million due mainly to the net investment in trucks and barges of R727 million, currency adjustments of R509 million resulting from a weaker Rand, reduced by depreciation of R778 million.

Vehicles for hire reduced by R134 million impacted by the sale of Goscor and Bobcat’s rental assets of R696 million and a reduction in fleet units, offset partly by price increases in vehicles for hire.

Net working capital increased by only 7% despite a higher increase in the Rand cost of imported vehicles.

Assets held for sale includes Regent and other businesses identified during 2016 as being available for sale.

Total assets increased by 6% to R69,8 billion due mainly to acquisitions, capital expenditure and currency adjustments.

Net debt to equity (including preference shares as equity and including Regent’s cash resources) at 73% improved from 76% at December 2015 but was higher than the 66% at June 2015. The increase in debt is due to a weaker exchange rate for the translation of the foreign debt into Rand, capital expenditure, working capital requirements and acquisitions. Net debt to equity (including preference shares as debt) is 77% (2015: 70%).

The net debt level is within the target gearing range of 60% to 80%. The net debt to total EBITDA ratio was 1,7 times (2015: 1,5 times).

Shareholders’ equity was impacted by the following major items:

Movement in shareholders’ equity

R million
Net profit attributable to Imperial shareholders   3 049  
Net profit attributable to non-controlling interests   159  
Increase in the foreign currency translation reserve   623  
Shares issued to acquire 10% of AMH   648  
A reduction in the hedge accounting reserve   (317)  
Re-measurement of defined benefit obligations   (159)  
Dividends paid   (1 909)  
Shares repurchased, acquired to hedge share appreciation rights & deferred bonus plan obligations   (558)  
Purchase of non-controlling interests:      
  AMH   (750)  
  Imres (including re-measurement of put option)   98  
  Midas   (113)  
  Other   (150)  
Other movements   (52)  
Total change

Cash flow

R million
2016   2015   % change  
Cash generated by operations before movements in working capital 8 952   9 049   (1)  
Movements in net working capital (excludes currency movements & net acquisitions) (828)   9*      
Interest paid (1 461)   (1 180)      
Tax paid (1 910)   (1 301)      
Cash flows from operating activities before capital expenditure on rental assets
4 753   6 577   (28)  
Net capital expenditure on rental assets (1 611)   (1 531)   5  
Cash flows from operating activities
3 142   5 046   (38)  
Net proceeds from sale of businesses (net of acquisitions) 760   (938)      
Net capital expenditure (2 527)   (2 988)      
Equities, investments and loans 41   (1 025)      
Dividends paid (1 909)   (1 724)      
Other (1 164)   (273)      
Increase in net debt (excludes currency movements & net acquisitions)
(1 657)   (1 902)*      
Free cash flow
2 517   4 573      

* Restated for the reclassification of interest-bearing accounts payable to accounts payable.

Cash generated by operations after working capital movements, interest charge and tax payments was R4,8 billion (2015: R6,6 billion).

Net working capital increased due to higher inventory in the Vehicle Import, Distribution and Dealerships division.

The main contributors to the net R760 million proceeds from sale of businesses (net of acquisitions) were the disposal of Neska, Goscor, ALS, two dealerships and two panel shop outlets.

Inflows from equities, investments and loans amounted to R41 million. The prior year included additional investments in long term deposits and equities.

Dividends amounting to R1,9 billion were paid during the year.

The Group’s liquidity position is strong with R9,4 billion in unutilised facilities (excluding asset based finance facilities). Fixed rate debt represents 44% of total debt and 79% is of a long term nature. The Group’s international scale credit rating as determined by Moody’s was unchanged at Baa3 with a stable outlook.


A final cash dividend of 425 cents per ordinary share (2015: 445 cents per share) has been declared, bringing F 2016 dividends to 795 cents per ordinary share, unchanged from the prior year.


As announced on 25 August 2015, Mr Suresh Kana, recent past Chief Executive Officer of PwC, was appointed as independent nonexecutive director of Imperial Holdings Limited from 1st September 2015 and as Chairman of the board from 3rd November 2015.

Mr. Moses Kgosana, a highly regarded member of the accounting profession, who established and later merged his own firm with KPMG where in recent years he served as Chief Executive and Senior Partner, was appointed as an independent non-executive director and chairperson of the Audit Committee from 1st September 2015.

On 3rd November 2015, Mr Roddy Sparks, who has served as a director since August 2006, was appointed Lead Independent Director.

As announced on 3rd June 2016, the following are the major organisation changes and the resulting appointments that affect the executive directorate.

> Effective 1st July 2016 Imperial’s entire logistics interests (i.e. Imperial Logistics South Africa, Imperial Logistics Rest of Africa and Imperial Logistics International) are managed as one division. Mr Marius Swanepoel, an executive director of Imperial, was appointed Chief Executive Officer of the new Logistics division from the same date.
> Effective 1st July 2016 Imperial’s entire vehicle interests (i.e. Vehicle Import Distribution and Dealerships; Vehicle Retail Rental and Aftermarket Parts; and Motor related Financial Services) will be managed as one division. From 1st July 2016 until 31st December 2016, Imperial’s Group Chief Executive Officer, Mr Mark Lamberti will be Executive Chairman of the division, leading and prioritising the necessary integration initiatives. On 1st January 2017, Mr Osman Arbee, currently Imperial’s Group Chief Financial Officer, will be appointed Chief Executive Officer of the newly created Vehicles division.
> Starting from 1st January 2017, Mr Arbee will facilitate an orderly transition which will result in Mr Mohammed Akoojee, currently Chief Executive Officer of Imperial Logistics Rest of Africa, being appointed Imperial Holdings Group Chief Financial Officer on 1st April 2017.

From F 2017, the newly created Logistics and Vehicles divisions will be reported on as single entities with due regard to the disclosures and transparency necessary to facilitate understanding and insight for shareholders.

The Logistics division will report segmentally on three sub-divisions, namely:

> Logistics South Africa;
> Logistics Rest of Africa; and
> Logistics International

The Vehicles division will report segmentally on two sub-divisions, namely:

> Import, Retail, Car Rental and Aftermarket Parts; and
> Motor Related Financial Services


Imperial’s performance for the financial year 2016 has been pleasing and reflects sound management of controllable factors under challenging circumstances.

There is no reason to anticipate an improvement in the trading conditions facing Imperial in the short term. We expect volume growth throughout our logistics operations to be subdued, and national new vehicle sales in South Africa to continue to decline in response to declining private consumption expenditure, rising interest rates and tightening credit. In addition, the volatility of the Rand and the currencies in the countries in which we operate, and the Group’s hedging policy to cover forward, will affect both our competitiveness and profitability.

These uncontrollable factors make forecasting challenging but the expected sub-divisional segmental performance is as follows:


> South Africa: Growth of revenues and operating profit
> Rest of Africa: Growth of revenues and a decline in operating profit
> International: Growth of revenues and operating profit, substantially from the Palletways acquisition


> Import, Retail, Car Rental and Aftermarket Parts: Flat revenue and a decline in operating profit.
> Motor Related Financial Services: Flat revenue and operating profit

Therefore, our current outlook for Imperial Holdings’ financial year to June 2017, including the impact of recent disposals, acquisitions and restructuring, indicates single digit revenue growth and a moderate decline in operating profit for continuing operations.

We will continue to execute on our espoused strategies.

MARK J. LAMBERTI – Chief Executive Officer
OSMAN S. ARBEE – Chief Financial Officer

The forecast financial information herein has not been reviewed or reported on by Imperial’s auditors.


for the year ended 30 June 2016


Notice is hereby given that a gross final preference dividend of 425.77911 cents per preference share has been declared by the Board of Imperial, payable to holders of non-redeemable, non-participating preference shares. The dividend will be paid out of reserves.

The preference dividend will be subject to a local dividend tax rate of 15%. The net preference dividend, to those shareholders who are not exempt from paying dividend tax, is therefore 361.91224 cents per share.


Notice is hereby given that a gross final ordinary dividend in the amount of 425.00000 cents per ordinary share has been declared by the Board of Imperial, payable to holders of ordinary shares. The dividend will be paid out of reserves.

The ordinary dividend will be subject to a local dividend tax rate of 15%. The net ordinary dividend, to those shareholders who are not exempt from paying dividend tax, is therefore 361.25000 cents per share.

The company has determined the following salient dates for the payment of the preference dividend and ordinary dividend:

Last day for preference shares and ordinary shares respectively to trade cum-preference dividend and cum ordinary dividend Tuesday, 20 September
Preference and ordinary shares commence trading ex-preference dividend and ex-ordinary dividend respectively Wednesday, 21 September
Record date Friday, 23 September
Payment date
Monday, 26 September

Share certificates may not be dematerialised/rematerialised between Wednesday, 21 September 2016 and Friday, 23 September 2016, both days inclusive.

On Monday, 26 September 2016, amounts due in respect of the preference dividend and the ordinary dividend will be electronically transferred to the bank accounts of certificated shareholders that utilise this facility. In respect of those who do not, cheques dated 26 September 2016 will be posted on or about that date. Shareholders who have dematerialised their shares will also have their accounts, held at their CSDP or Broker, credited on Monday, 26 September 2016.

On behalf of the board

RA Venter
Group Company Secretary

22 August 2016


These summarised consolidated financial statements for the year ended 30 June 2016 have been audited by Deloitte & Touche, who expressed an unmodified opinion thereon. The auditor also expressed an unmodified opinion on the financial statements from which these summarised consolidated statements were derived.

A copy of the auditor’s report on the summarised consolidated financial statements and of the auditor’s report on the consolidated financial statements are available for inspection at the company’s registered office, together with the financial statement identified in the respective auditor’s reports.

The auditor’s report does not necessarily report on all of the information contained in these financial results. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor’s engagement, they should obtain a copy of the auditor’s report together with the accompanying financial information from the company’s registered office