- Imperial recorded a strong recovery in volumes and
profitability compared to F2020. This is reflected in the
group’s excellent set of results for the 2021 financial year, in
addition to the significant strategic progress made (despite
the continued impact of COVID-19) and significantly
unlocking value for its key stakeholders.
- Imperial’s balance sheet remains strong with net
debt:EBITDA at 1,3x compared to 2,8x in F2020, supported
by the receipt of the proceeds of c.R4,7 billion from the sale
of the European and South American shipping businesses
during the year.
- Strong free cash flow (post maintenance capex, repayment
of lease obligations and excluding discontinued operations
and CPG) of R900 million was generated during the year
(F2020: R1 304 million).
- Excluding businesses held for sale, revenue grew by 14% to
R51 705 million from R45 330 million, mainly supported by
a recovery in volumes across most businesses as COVID-19
lockdown restrictions eased in certain key markets, new
business gains and acquisitions. However, businesses
exposed to alcohol and tobacco sales in Africa and our
European operations in the automotive sector were
negatively impacted by ongoing lockdown restrictions and
the global shortage of semi-conductors during the year.
- Continuing EBITDA, excluding businesses held for sale,
increased by 23% from R4 050 million to R4 964 million.
- Continuing operating profit, excluding businesses held
for sale, increased by 59% from R1 480 million in the prior
year as a result of stringently managed costs across all
businesses, a steady recovery in operations as COVID-19
lockdown restrictions eased in key markets, new contract
gains and the inclusion of new acquisitions.
- Continuing operating margin increased to 4,5% from 3,1%
in the prior year.
- Continuing Headline Earnings per share (HEPS) increased
by 113% to 332 cents per share and continuing Core EPS
increased by 215% to 448 cents per share. At interim results
2021, we re-introduced Core EPS as management believes
it is a fairer reflection of Imperial’s trading performance.
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. A full reconciliation of HEPS to
earnings per share (EPS) is on Group financial performance.
- While the impact of COVID-19 on operations was not
as severe as the impact recorded in the 2020 financial
year, management estimates that COVID-19 negatively
impacted revenue and operating profit by c.R2,6 billion
and c.R346 million respectively in F2021. Excluding the
impact of COVID-19 in F2020 and F2021, management
estimates that revenue increased by 9% and operating
profit increased by 7%.
- Annualised costs of c.R200 million were removed from
Logistics Africa, which will assist in maintaining our
competitive market positioning.
- Imperial’s contract renewal rate across its operations on
existing contracts remains strong at 88%, with a strong
pipeline of new opportunities.
- New business revenue of c.R5,9 billion p.a. was secured on
a rolling 12-month basis to the end of June 2021.
- Strategic acquisitions of c.R120 million were concluded
during the year. We also announced two additional
acquisitions: Deep Catch Namibia Holdings (c.R633 million)
and the J&J Group (c.R4,4 billion).
- The disposal of the loss-making business, Pharmed, was
successfully concluded during the year.
- Net working capital of R787 million increased by 45% from
R544 million at June 2020 but is below the guidance of
4% to 5% of revenue.
- Net capital expenditure of R701 million from continuing
operations decreased from R1 149 million and was
significantly lower than depreciation (excluding right-of-use
assets). Some of this decline is attributed to more effective
and efficient fleet management technology implemented
across Logistics Africa.
- Net debt of R4 038 million decreased by 52% compared to
June 2020 mainly due to the proceeds from the disposal
of the European and South American shipping businesses.
A summary of the movements is provided in the group
financial performance section.
- ROIC of 9,0% (F2020: 4,9%) vs. the weighted average cost of
capital (WACC) of 7,7% (F2020 7,6%), improved significantly
- We continued to record significant strides in our strategic
journey to transform from a portfolio of regional businesses
to an integrated end-to-end market access and logistics
business — with the strategic intent of becoming ‘One
Imperial’ and a ‘Gateway to Africa’, with committed and
well-skilled executive management teams.
- In July 2021, we announced that Imperial entered into
a transaction implementation agreement regarding a
cash offer of R66 per share from DP World Logistics FZE
(DP World), to acquire all outstanding shares of Imperial,
implying an estimated aggregate cash consideration of
c.R12,7 billion. This transaction is in progress and subject
to shareholder and regulatory approvals.
- Discontinued operations: the European shipping business
was sold on 31 July 2020 and is classified as a discontinued
operation in these results.
- The results of Pharmed and South American Shipping,
previously reported as held for sale, are included in
continuing operations for reporting purposes.