Imperial’s balance sheet remains strong despite significant organic and acquisitive growth and share buybacks in the recent past.

In South Africa, we expect trading conditions in the logistics industry to remain challenging, driven by a weak economy especially in the manufacturing sector. As a result, the division underwent a strategic consolidation process, which positions it well to be more competitive and cost effective in a tough market. We expect the benefits of this process to be realised in the 2014 financial year. Prospects in the rest of Africa are good, as our expansion into the continent will continue gaining momentum, especially in consumer markets. CIC together with the new acquisitions of RTT Health Sciences and MDS Logistics, provide the ideal platform to take advantage of growth opportunities in these markets.

Imperial Logistics International remains well positioned in attractive niches in the German logistics industry. Despite the tough economic conditions in Europe, we are positive about the division’s prospects and its ability to show growth due to its positioning and the industries it serves. We will continue to follow our customers who are entering new markets and potential acquisitions will continue to be a growth driver.

We anticipate tougher trading conditions in the new motor vehicle market during the year ahead. Reduced disposable income, a weaker currency and the high base created by strong volume gains in the last four years all present headwinds for growth. While our inventory position has improved, we expect the market to be more competitive as market conditions get tougher. As a result of new vehicle price increases, the used car market should improve further and after-sales parts and services revenues will continue benefiting from the increase in the installed base of vehicles, especially in the brands we represent.

Conditions in the car rental business are expected to remain competitive. Auto Pedigree should continue benefiting from the improving used car market.

The Autoparts business is not affected directly by new vehicle sales and despite an increasingly competitive market we should continue to perform solidly as initiatives to expand its product range and geographic footprint bear fruit.

In the year ahead Regent will focus on improving its underwriting result, which will be supported by its recent exit from under-performing insurance product lines. Our investment portfolio will continue to be prudently managed and while we cannot predict the performance of investment markets and our investment returns, we are confident that our underwriting performance will improve in the year ahead.

The growth in the underlying books of business in LiquidCapital will be impacted by slower growth in the new vehicle market. However, its financial performance will be under-pinned by the strong annuity revenue streams that flow from the installed base of business it has generated in the last few years.

While it will be difficult to achieve meaningful growth under current market conditions in the 2014 financial year, the group is well positioned to take advantage of organic growth and acquisition opportunities.

Retirement of executive director

Mr Abdul Hafiz Mahomed reaches the group’s normal retirement age of 63 during 2013 and has decided to retire as a director, effective 30 June 2013. He will remain in the employ of the group until the end of 2013 in order to ensure a seamless handover of his responsibilities to his successor, Mr Osman Arbee. Hafiz joined the group as financial manager in 1982 and was appointed to the board in March 1992. Hafiz has played an instrumental and key role in the group over the years and Imperial expresses its gratitude to him for over 30 years of dedicated service and wish him well in his retirement.

Osman joined the group and the executive committee in September 2004 and was appointed to the board in July 2007.

By order of the board

TS Gcabashe
HR Brody
Chief Executive
OS Arbee
Financial Director


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