R million | % change | 2021 | 2020 | |||
CONTINUING OPERATIONS | ||||||
Revenue | 13 | 52 208 | 46 380 | |||
---|---|---|---|---|---|---|
Net operating expenses | (47 222) | (42 282) | ||||
Profit from operations before depreciation, impairment and recoupments | 22 | 4 986 | 4 098 | |||
Depreciation, amortisation, impairments and recoupments | (2 650) | (2 639) | ||||
Operating profit before the items listed below* | 60 | 2 336 | 1 459 | |||
Impairment of properties net of recoupments | (118) | (194) | ||||
Amortisation and impairment of intangible assets arising on business combinations | (404) | (393) | ||||
Foreign exchange gains | 210 | 93 | ||||
Profit before net finance costs | 110 | 2 024 | 965 | |||
Net finance cost | (3) | (742) | (762) | |||
Profit before share of results of associates and joint ventures | 1 282 | 203 | ||||
Share of results of associates and joint ventures | 3 | 22 | ||||
Profit before the remeasurement of financial liabilities and capital items | 471 | 1 285 | 225 | |||
Remeasurement of financial liabilities and capital items | (477) | 52 | ||||
Profit before tax | 808 | 277 | ||||
Income tax expense | (274) | (159) | ||||
Profit for the year from continuing operations | 353 | 534 | 118 | |||
DISCONTINUED OPERATIONS | 593 | (344) | ||||
Net loss from CPG | (305) | |||||
Net profit (loss) from the European Shipping business | 593 | (39) | ||||
Net profit (loss) for the year | 1 127 | (226) | ||||
Net profit (loss) attributable to: | ||||||
Owners of Imperial | 951 | (303) | ||||
– Continuing operations | 358 | 42 | ||||
– Discontinued operations | 593 | (345) | ||||
Non-controlling interests | 176 | 77 | ||||
– Continuing operations | 176 | 76 | ||||
– Discontinued operations | 1 |
Revenue and operating profit from continuing operations increased by 13% and 60% respectively as the prior year was negatively impacted by COVID-19 across all businesses.
The R1 060 million increase in profit before remeasurement of financial liabilities and capital items to R1 285 million is mainly attributed to:
Remeasurement of financial liabilities and capital items comprised of impairments to goodwill in businesses in Market Access, as well as the loss on disposal of the South American shipping business and Pharmed.
The effective tax rate calculated by dividing income tax by profit before tax, excluding share of result of associates and joint venture reduced from 62% in the prior year to 34% in the current year.
Significant contributors to the high effective tax rate in the current year are the non-deductible tax items included in remeasurement of financial liabilities and capital items and deferred tax assets not recognised, offset partially by non-taxable gains such as the foreign exchange gain due to the reduction in capital in foreign subsidiaries.
The gain from discontinued operations is due to the net gain arising on disposal of the European shipping business of R589 million and the reporting result for the business until the date of disposal at the end of July 2020.
Non-controlling interest's share of income increased mainly due to the impact of the new acquisitions last year and the decrease in the loss contribution of Pharmed as a result of its disposal during the year. This increase was partially offset by a decrease in non-controlling interests as a result of buy-outs.
Core EPS is determined as follows: Headline earnings are adjusted by items that are not considered to be of a trading nature to arrive at Core EPS.
R million | % change | 2021 | 2020 | ||
Headline earnings reconciliation | |||||
Earnings (loss) – total operations | 951 | (303) | |||
– Continuing operations | 752 | 358 | 42 | ||
– Discontinued operations | 593 | (345) | |||
Recoupment from the disposal of property, plant and equipment (IAS 16) | (34) | (54) | |||
Loss on disposal of intangible assets (IAS 38) | 4 | ||||
Impairment of property, plant and equipment and transport fleet (IAS 36) | 86 | 89 | |||
Impairment of right-of-use assets (IFRS 16) | 41 | 140 | |||
Impairment of intangible assets (IAS 36) | 35 | 121 | |||
Impairment of goodwill (IAS 36) | 40 | 223 | |||
Impairment of investment in associates and joint ventures (IAS 28) | 11 | 2 | |||
Loss (profit) on disposal of subsidiaries, associates and businesses (IFRS 10), (IAS 28) | 520 | (17) | |||
Remeasurements included in share of results of associates | (3) | ||||
Foreign exchange gain reclassified to profit or loss (IAS 21) | (364) | (160) | |||
Tax effects of remeasurements | (77) | (89) | |||
Non-controlling interests' share of remeasurements | 4 | (6) | |||
Net headline earnings adjustments for discontinued operations | (589) | 248 | |||
Headline earnings | 214 | 621 | 198 | ||
– Continuing operations | 109 | 617 | 295 | ||
– Discontinued operations | 4 | (97) | |||
Headline earnings per share (cents) | |||||
Continuing operations | |||||
– Basic | 113 | 332 | 156 | ||
– Diluted | 110 | 317 | 151 | ||
Discontinued operations | |||||
– Basic | 2 | (51) | |||
– Diluted | 2 | (50) | |||
Total operations | |||||
– Basic | 218 | 334 | 105 | ||
– Diluted | 216 | 319 | 101 | ||
Core earnings – continuing operations only | |||||
Headline earnings | 617 | 295 | |||
Amortisation of intangible asset arising on business combinations | 369 | 374 | |||
Remeasurement of put option liabilities | (39) | (277) | |||
Remeasurement of contingent consideration liabilities | (30) | (23) | |||
Business acquisition costs | 41 | 21 | |||
Remeasurements included in share of results of associates and joint ventures | 3 | ||||
Tax effects of remeasurements | (100) | (99) | |||
Non-controlling interests' share of remeasurements | (28) | (23) | |||
Core earnings | 833 | 268 | |||
Core earnings per share (cents) | |||||
– Basic | 215 | 448 | 142 | ||
– Diluted | 428 | 137 |
R million | % change | 2021 | 2020 | ||
Goodwill and intangible assets | (14) | 6 121 | 7 084 | ||
---|---|---|---|---|---|
Investment in associates and joint ventures | 2 | 201 | 198 | ||
Property, plant and equipment | (12) | 2 937 | 3 326 | ||
Transport fleet | (40) | 3 132 | 5 186 | ||
Right-of-use-assets | (21) | 4 297 | 5 422 | ||
Investments and other financial assets | 24 | 337 | 271 | ||
Net working capital* | 45 | 787 | 544 | ||
Net assets of disposal groups and discontinued operations | (100) | 2 781 | |||
Retirement benefit obligations | (19) | (899) | (1 109) | ||
Net debt* | (52) | (4 038) | (8 391) | ||
Lease obligations | (20) | (4 866) | (6 080) | ||
Other financial liabilities | (36) | (912) | (1 415) | ||
Net income tax assets* | 45 | 662 | 455 | ||
Total equity | 7 759 | 8 272 | |||
Total assets | (29) | 30 329 | 42 526 | ||
Total liabilities | (34) | (22 570) | (34 254) | ||
Net debt?equity % | 52,0 | 101,4 | |||
Net debt?equity % (including lease obligations) | 114,8 | 174,9 |
The significant variances on the financial position at 30 June 2021 when compared to 30 June 2020 are as follows:
The balance sheet movement in net debt of R4 353 million includes currency movements, debt arising on the disposal and acquisition of subsidiaries, and other non-cash movements of R757 million that are excluded from the cash flow movement of R3 596 million.
R million | 2021 | 2020 | ||
Cash flows from operating activities | ||||
Cash generated by operations before movements in net working capital | 4 908 | 4 536 | ||
Movements in net working capital | (1 046) | 559 | ||
Cash generated by operations before interest and taxes paid | 3 862 | 5 095 | ||
Net interest paid | (707) | (918) | ||
Tax paid | (519) | (367) | ||
Cash generated by operations | 2 636 | 3 810 | ||
Cash flows from investing activities | ||||
Net disposal (acquisition) of subsidiaries and businesses | 4 195 | (276) | ||
Expansion capital expenditure | (554) | (747) | ||
Net replacement capital expenditure | (179) | (735) | ||
Net movement in other associates and joint ventures | (69) | 45 | ||
Net movement in investments, loans and non-current financial instruments | (80) | (59) | ||
Cash generated from (utilised in) investing activities | 3 313 | (1 772) | ||
Cash flows from financing activities | ||||
Hedge cost premium paid | (4) | (2) | ||
Settlement of interest-rate-swap instruments | (46) | (11) | ||
Repurchase of ordinary shares | (101) | (225) | ||
Dividends paid | (279) | (658) | ||
Change in non-controlling interests | (122) | (277) | ||
Payment of lease obligations | (1 801) | (2 032) | ||
Cash utilised in financing activities | (2 353) | (3 205) | ||
Movement in net debt | 3 596 | (1 167) | ||
Free cash flow | 656 | 1 043 |
The following are the significant cash flow items:
Movement in total equity for the 12 months to 30 June 2021
Total equity of R7 759 million decreased by R513 million from R8 272 million previously reported on 30 June 2020.
R million | 2021 |
Comprehensive loss | (41) |
---|---|
Net profit attributable to Imperial shareholders | 951 |
Net profit attributable to non-controlling interests | 176 |
Decrease in the foreign currency translation reserve | (1 262) |
Increase in the hedge accounting reserve | 60 |
Revaluation of retirement benefit obligation, net of taxation | 34 |
Movement in share based reserve net of transfers to retained earnings | 36 |
Repurchase of Imperial Logistics shares | (101) |
Ordinary dividend | (157) |
New put arrangements over non-controlling interests | (66) |
Non-controlling interests acquired in business combinations, net of disposals | 12 |
Net decrease in non-controlling interests through buy-outs | (74) |
Non-controlling interests share of dividends | (122) |
Total decrease | (513) |
The group's liquidity position remains strong with R14,4 billion of unutilised banking facilities, and 54% of the group debt (excluding leases) is long-term in nature and 36% of the debt is at fixed rates.
An interim cash dividend of 83 cents per ordinary share, which is 19% of continuing Core EPS for the year, was paid to shareholders in March 2021. As disclosed in the circular relating to the DP World Transaction, no final dividend is declared. As such the total F2021 dividend was 83 cents per ordinary share (F2020: 167 cps).