> Excluding current year acquisitions, revenue grew 3% and operating profit declined 4%. Revenue and operating profit from continuing operations, excluding Regent, were up 7% to R107,5 billion and down 1% to R5,7 billion respectively.
> Notwithstanding a first to second half improvement from 5,1% to 6,2%, the Group’s operating margin reduced from 6,0% to 5,6% due mainly to the impact of a weakening Rand on the competitiveness and profitability of the Vehicle Import, Distribution and Dealerships division.
> A full reconciliation from earnings to headline earnings and core earnings is provided in the Group Financial Performance section.
> The net debt to equity ratio (including preference shares as equity) improved from 81% in December 2014 to 69% at year-end (62% at June 2014).
> The Group’s return on invested capital (ROIC) was 12% and the weighted average cost of capital (WACC) was 9%.
> Cash flow from operating activities improved to R5,0 billion from R3,0 billion in 2014, largely as a result of lower investment in working capital.
> A final cash dividend of 445 cents per share was declared, up 6%, resulting in a full year dividend of 795 cents per share for 2015 compared to
820 cents per share in 2014.

These results reflect progress with Imperial’s previously espoused intent to decouple the Group’s performance from the impact of Rand weakness on the Vehicle Import, Distribution and Dealerships division, as it pertains specifically to the competitiveness and profitability of directly imported new vehicles.

Progress towards this objective has been achieved by investing in or developing less correlated activities within the automotive value chain; or businesses where our capabilities, experience and expertise enable us to grow at acceptable, sustainable rates of return in new markets and geographies.

> Non vehicle revenue and operating profit, including Regent, increased 8% to R48,9 billion (43% of Group revenue) and 14% to R3,7 billion (59% of Group operating profit) respectively.
> Foreign revenue, including Regent, increased 17% to R41,1 billion (37% of Group revenue) and foreign operating profit, including Regent, increased 23% to R2,0 billion (32% of Group operating profit). Rest of Africa revenue, including Regent, increased 50% to R11,2 billion (10% of Group revenue) and operating profit increased 60% to R835 million (13% of Group operating profit).


Despite signs of recovery in the second half of calendar 2014, global economic growth expectations for 2015 declined as developed markets recovered at a slower pace than expected, China’s growth slowed and smaller developing markets faced two transitions: lower commodity prices that are punishing exporters; and US dollar strength (in anticipation of tightening monetary conditions) that is exerting pressure on capital inflows and therefore currencies.

South Africa was a victim of these developments with the fragility of the economy exacerbated by the electricity crisis and reflected in the skittish consumption patterns of ordinary South Africans and the low confidence of investment decision makers. These were manifest in softer demand for Imperial’s products and services and aggressive competition on every front. Vehicle buyers were highly price sensitive trading down to smaller or pre-owned vehicles, consumer goods volume growth was weak and bulk commodity volumes were in decline.

The slow recovery of the Eurozone and more specifically weak volumes in the industries that we serve in Germany, exerted pressure on Imperial’s volumes, rates and utilization. The region, including the United Kingdom where Imperial performed well, accounts for 24% of Group revenue and 18% of Group operating profit.

The higher growth of African economies in recent years is being muted by lower commodity prices and softer currencies. During the year these factors had limited impact on the consumer and pharmaceutical markets in which we operate.


Imperial’s strategy seeks to drive capability-based growth and focused value creation through strategic clarity and financial discipline at Group and divisional level.

The refinement of the Imperial portfolio remains an imperative in pursuit of growth, sharper executive focus and higher returns on capital and effort, in the medium term. This will be accomplished by disposing of assets that are non-core, strategically misaligned, underperforming or of low return on effort, while acquiring mainly foreign businesses to offset the limited growth opportunities dictated by Imperial’s position as a South African market leader in logistics and motor vehicles.

Sustainability and quality of earnings will be assured by higher investment in people, systems and governance.



R million HY1
  % change
on HY1
  % change
on HY2
  2015   2014   % change
Revenue 13 265   22   12 082   8   25 347   22 090   15  
Operating profit 802   23   785   27   1 587   1 270   25  
Operating margin (%) 6,0       6,5       6,3   5,7      
Return on Invested Capital (%)                 10,7   12,0      
Weighted average cost of capital (%)                 8,2   8,8      

In South Africa the division continued to perform satisfactorily in a testing environment, benefitting from operational efficiencies and its favourable market position as the country’s leading provider of end to end logistical solutions. New contract gains compensated for marginal or negative volume growth in the mining, manufacturing and retail sectors.

The industrial logistics businesses servicing the manufacturing, mining, commodities, chemicals and construction industries experienced declining volumes, which depressed revenue growth and operating margins.

The consumer logistics businesses showed muted revenue growth but good operating profit growth, due mainly to the acquisition of Pharmed and a turnaround at Imperial Cold Logistics. Volume growth in our manufacturing client base is lacklustre.

The division’s operations in the Rest of Africa continued their strong performance, with revenue and operating profit growing by 58% and 89% respectively, supported by good volume growth and the contribution of strategically aligned acquisitions in the pharmaceuticals sector (Imres and Eco Health). The division’s strategy to be a significant distributor and logistics provider of consumer goods and pharmaceutical products in Southern, East and West Africa is on track, with acquisitions performing in line or ahead of expectations.

The division incurred net capital expenditure of R1,0 billion (2014: R887 million), the increase mainly attributable to the transport fleet and property investments.

We expect real growth of revenues and operating profit from the Logistics Africa division in 2016.


Euro million HY1
  % change
on HY1
  % change
on HY2
  2015   2014   % change
Revenue 678     713   3   1 391   1 368   2  
Operating profit 27   (13)   43   13   70   69   1  
Operating margin (%) 4,0       6,0       5,0   5,0      
R million                            
Revenue 9 595   5   9 476   (7)   19 071   19 249   (1)  
Operating profit 386   (6)   572   2   958   971   (1)  
Operating margin (%) 4,0       6,0       5,0   5,0      
Return on Invested Capital (%)                 8,2   7,7      
Weighted average cost of capital (%)                 6,3   6,5      

Logistics International’s operating profit in Euros was slightly up on the prior year, impacted by slow economic growth which suppressed volumes, rates and utilization in most Eurozone logistics sectors. Revenue and operating profit were up 2% and 1% respectively in Euros.

This division showed an improved result in the second half, recording a 13% increase in operating profit in Euros. However, for the financial year, the marginal increase in operating profit to €70 million was below expectations, impacted by a decline in dry freight rates in the European inland shipping market and generally muted activity levels in most of our clients’ sectors in Europe. The strengthening of the Rand against the Euro undermined the Rand-denominated results.

Transport volumes across the German inland shipping industry were down and overcapacity depressed freight rates. The contract in South America, which commenced in February 2014, is performing in line with expectations and contributed positively for the year.

Lehnkering, comprising road transport, warehousing, distribution and contract manufacturing of chemicals, experienced mixed results during the year. Persistent drought conditions in the Western United States and lower volumes in the chemical manufacturing services business in Europe depressed the manufacturing performance. This was offset by a good performance from the chemical transport, warehousing and distribution businesses.

Neska, the terminal operator, experienced declining volumes (mainly paper and dry bulk) due to increased competition and muted activity levels. The intermodal business performed better, buoyed by improved container volumes.

Panopa, which provides parts distribution and in-plant logistics services to automotive, machinery and steel manufacturers, performed well in the second half, recording good growth in revenue and operating profit. Despite good revenue growth from new contract gains for the year, margins were depressed by high start-up costs and operational inefficiencies on a new project in the first half of the year.

Divisional net capital expenditure of R1,2 billion (2014: R1,1 billion) was incurred during the year. Most of this was invested in two additional convoys commissioned during the year in support of a 10 year contract for the transport of iron ore from Brazil along the Rio Paraná to a steel mill in Argentina. South American assets in operation now include four convoys with four push boats redeployed from Europe, together with 48 newly built barges. The success of this contract is evidence of the division’s ability to transfer core capabilities to new markets, which will continue to be a focus in the year ahead.

We expect real growth of revenues and operating profit in Euro’s from the Logistics International division in 2016.


R million HY1
  % change
on HY1
  % change
on HY2
  2015   2014
  % change
Revenue 14 278   7   13 159   (4)   27 437   27 100   1  
Operating profit 461   (51)   499   (15)   960   1 518   (37)  
Operating margin (%) 3,2       3,8       3,5   5,6      
Return on Invested Capital (%)                 6,1   11,5      
Weighted average cost of capital (%)                 9,0   9,1      

The Vehicle Import, Distribution and Dealerships division is an exclusive importer of 16 automotive and industrial vehicle brands (primarily Hyundai, Kia and Renault), and a distributor and retailer through 129 owned and 111 franchised dealerships, including six in Australia and eight in sub-Saharan Africa.

As predicted, the division faced extremely challenging trading conditions during the year. The cost of new inventory escalated with the weakening of the Rand and higher forward cover costs. Concurrently pricing power was eroded by the more favourable competitive position of local Original Equipment Manufacturers (OEMs) who enjoy the advantage of the duty, rebate and cash benefits of the government’s Automotive Production and Development Programme (APDP) and can balance foreign currency purchases with export earnings. Together these factors depressed margins and unit volumes. Price increases, adequate inventory levels and good levels of forward cover resulted in an improved performance in the second half, with operating profit increasing by 8% and operating margins improving to 3,8% from 3,2% in the first half.

In South Africa, the division retailed 89 925 (2014: 90 937) new and 36 614 (2014: 35 739) pre-owned vehicles during the year. The division’s South African new vehicle registrations as reported to NAAMSA were 1% lower than the previous year, including Renault for a full 12 months compared to seven months in the prior year. Excluding Renault, unit sales were down 11% year on year.

Annuity revenue streams generated from after-sales parts and service grew strongly with revenue from the rendering of services up 10% for the year. The growing vehicle parc of our imported brands, now over 1 million, is delivering good levels of after-market activity for dealerships.

The industrial products and services business performed satisfactorily despite a declining forklift market and lower demand from the mining sector.

Divisional net capital expenditure increased by 20% to R1,2 billion (2014: R998 million) as a result of additional vehicles leased to car rental companies and an increased investment in properties.

As communicated previously, historic high margins in this division were achieved through the convergence of specific positive economic, consumer, currency and industry circumstances which are unlikely to occur in the future. Expected operating margins in future are likely to be closer to those of the current financial year than to the average of the past five financial years. Moreover profits will decline in periods when the Rand depreciation rate relative to the currencies in which we import vehicles is higher than the rate of South African new vehicle inflation.

In the absence of a marked deterioration of the Rand relative to our current forward cover position, we expect the Vehicle Import, Distribution and Dealerships division to grow revenue and operating profit in 2016.


R million HY1
  % change
on HY1
  % change
on HY2
  2015   2014
  % change
Revenue 18 726   7   18 821   14   37 547   34 014   10  
Operating profit 791   7   886   8   1 677   1 569   7  
Operating margin (%) 4,2       4,7       4,5   4,6      
Return on Invested Capital (%)                 14,7   15,8      
Weighted average cost of capital (%)                 9,3   9,5      

The Vehicle Retail, Rental and Aftermarket Parts division includes: 86 passenger vehicle dealerships franchising the products of 16 locally based OEM’s; 22 commercial vehicle dealerships representing 12 brands in South Africa; 38 commercial vehicle dealerships and workshops in the United Kingdom; Car Rental (comprising Europcar and Tempest); Auto Pedigree, the pre-owned vehicle retailer; Panel shops and Aftermarket Parts (comprising Midas, Alert Engine Parts and Turbo Exchange).

The division continued to deliver good growth of revenue and operating profit during the year.

In South Africa, the vehicle retail businesses delivered a solid performance, retailing 30 641 (2014: 31 816) new and 31 484 (2014: 30 759) pre-owned vehicles during the year. Despite lower new unit sales, passenger vehicle revenue grew due to an improved sales mix and new vehicle price inflation. The latter drove motorists to pre-owned vehicles, which experienced moderate growth. Good expense management and a well streamlined network of dealerships resulted in operating profit growth higher than revenue in the passenger vehicle business.

South Africa’s medium commercial, heavy commercial and extra heavy vehicle markets experienced a softening of new retail unit sales on the prior year. As a result, both revenue and operating profit in the local commercial vehicle business declined.

The United Kingdom commercial vehicle market grew strongly with the national truck market up 48% (i.e. the impact of Euro 6 suppressed 2014 sales volumes) and the national light commercial vehicle market up 20%. Imperial’s results were buoyed by this market growth and the acquisition of S&B Commercials, acquired effective 1 September 2014. A weaker Rand enhanced the growth in Rands.

After sales parts and service revenue grew 20% (13% ex UK). Parts revenue growth resulted from both price and volume increases with continued growth assured by the significant increase in new vehicle sales over recent years.

The car rental business experienced a difficult year with lower volumes in most segments. Highly challenging trading conditions included strong competition, spending cuts by government and corporations, clients moving from single to dual supply contracts, and Uber. Revenue days declined, whilst utilization improved by 2% on the prior year with the average fleet size 10% lower.

Unit sales at Auto Pedigree declined as banks tightened credit approval rates to consumers in lower income segments in response to the National Credit Act amendments in April 2015. Panel shops delivered a disappointing result as revenue declined on the prior year, which included extraordinary hail repairs.

The Aftermarket Parts business revenue grew 8%, despite the increasingly tough market conditions and the switch to alternative, cheaper brands which put pressure on margins and market share. Price increases as a result of the weakening Rand assisted revenue growth but operating income for the year was flat.

Divisional net capital expenditure of R844 million was incurred (2014: R633 million) largely on the car rental fleet and property development.

We expect the Vehicle Retail, Rental and Aftermarket Parts division to produce single digit growth of revenues and operating profit in 2016.


R million HY1
  % change
on HY1
  % change
on HY2
  2015   2014**
  % change
Motor Related Financial Services and Products                            
Revenue 658   17   771   28   1 429   1 166   23  
Operating profit – restated 307   12   313     620   587   6  
Operating margin (%)* 46,7       40,6       43,4   50,3      
Insurance (discontinued operations)                            
Revenue 1 470   1   1 564   8   3 034   2 905   4  
Operating profit 180   (27)   384   86   564   454   24  
Adjusted investment income 87   (48)   121   12   208   276   (25)  
Adjusted underwriting result 166   20   313   65   479   328   46  
Intergroup eliminations** (73)   26   (50)   (46)   (123)   (150)   (18)  
Operating margin (%) 12,2       24,6       18,6   15,6      
Underwriting margin (%) 11,3       20,0       15,8   11,3      
Return on Invested Capital (%)                 32,3   31,4      
Weighted average cost of capital (%)                 11,6   12,2      
* The operating margin for motor-related financial services and products benefits from investment income and profit share arrangements, including banking alliances where we recognise profit, but for which there is no corresponding revenue.
** Regent has been classified as a discontinued operation. The accounting standards require that the continuing and discontinued operations are reflected after adjusting for all intergroup transactions. These transactions relate to intergroup revenue, fees and cell captive incomes. The cell captive incomes retained with the sale of Regent are now included in Motor Related Financial Services and Products and the 2014 result has been reclassified accordingly.

The division provides insurance products and services through Regent, maintenance and warranty products associated with the automotive market through Liquid Capital, and vehicle leasing through Imperial Fleet Management and Ariva.

For the reasons outlined later in the report, negotiations for the sale of Regent are currently underway. Regardless of the outcome of these negotiations, motor related financial services will remain an integral part of the Group’s strategic focus on the full automotive value chain.

The underwriting performance in Regent’s short term business benefited from more effective risk management resulting in improved loss ratios in the motor comprehensive and commercial vehicle businesses. New business penetration of motor related value added products improved despite slowing vehicle sales. Regent Life performed well with new business volume growth. Regional business beyond South Africa remained a meaningful contributor to the division and performed to expectation. These factors together with Regent’s decision to focus on its core markets and distribution channels, increased underwriting profit by 46% with underwriting margins improving from 11,3% to 15,8%. Equity markets were less favourable when compared to the prior year, resulting in lower investment returns on prudent equity positions.

Liquid Capital grew operating profit by 6%, despite more conservative impairment provisions in the vehicle financing alliances. The advances generated through the alliances with financial institutions grew strongly, as did the funds held under service, maintenance, roadside assistance and warranty plans, which grew by 10%. Innovative new products, improved retention and penetration rates in our sales channels also contributed positively to the growth in these businesses, providing valuable annuity earnings to underpin future profits.

We continue to focus on growing the leasing business via Imperial Fleet Management, building synergies within the retail divisions. Ariva, a private leasing alliance, had a difficult year as new business volumes declined in a tighter credit environment.

Net capital expenditure in the Motor Related Financial Services and Products division related mainly to vehicles for hire. In the current period, a net R649 million was invested in the fleet, compared to R224 million in the prior year when certain of these vehicles were leased through one of our banking alliances. The duplication of Vehicles for hire held in both this division and the Vehicle Import, Distribution and Dealerships division is eliminated under head office and eliminations.

Vehicle sales are expected to decline in the year ahead. Initiatives to drive direct sales and offer a differentiated value proposition to the market should mitigate this and support revenue and operating profit growth, excluding Regent, in 2016.



Effective 9 July 2014, the Logistics Africa division acquired 62,5% of the issued share capital of Pharmed for a cash consideration of R148 million. Pharmed is a pharmaceutical wholesaler which generated turnover of R612 million and employs approximately 560 staff based in Durban and Johannesburg. It purchases product from pharmaceutical companies and warehouses, distributes and sells to hospitals, private pharmacies and dispensing doctors. The Pharmed acquisition augments Imperial Health Sciences in support of Imperial’s strategy to integrate pharmaceutical wholesaling and distribution into its service offering.


Effective 1 September 2014, the Logistics Africa division acquired a 70% interest in Imres, for a cash consideration of R647 million (€46 million).

Imres is a wholesaler of pharmaceutical and medical supplies to its client base which includes NGO’s, hospitals and retailers. It operates in the international medical relief industry, targeting mainly African and emerging countries with developing healthcare needs.

Imres plays a key role in the supply chain to end users and its service offering includes: sourcing, inbound logistics, supplier audits, quality control, warehousing, distribution and transport coordination. Its product portfolio includes pharmaceuticals, medical kits, hospital equipment and related medical products.

Imres adds sourcing and procurement capabilities to Imperial’s service offering with the potential to leverage off Imperial’s existing network and capabilities on the African continent.

Imres has a capable, experienced management team and the organisational processes and structures necessary for pharmaceutical distribution. Founded in 1980, the company is headquartered in Lelystad in the Netherlands with a facility in India which provides support services and vendor qualification. Imres has annual revenues of approximately R1,2 billion (€88 million).


Effective 1 September 2014, the Vehicle Retail, Rental and Aftermarket parts division acquired 100% of the issued share capital of S&B Commercials plc for a cash consideration of R167 million (£9 million). S&B Commercials is a Mercedes Benz (Commercial and Van) and Fuso dealer in the UK with annual turnover of approximately R1,7 billion (£96 million). The acquisition enhances our current dealer network by adding new territories to our Mercedes Benz footprint while further diversifying our brand representation in the United Kingdom.



On the 27th May 2015 shareholders were advised that Imperial has entered into exclusive negotiations for three months with The Hollard Insurance Group and an associated party (“Hollard”), regarding the acquisition by Hollard of Imperial`s interest in Regent Insurance Company Limited and Regent Life Assurance Company Limited (“Regent”).

While the business of Regent has grown strongly since its establishment, a large fast growing portion of Regent’s revenue and profits are unrelated to the Group’s core vehicle and logistics businesses and enjoy no strategic, competitive or financial advantage from Imperial’s ownership. Therefore, and consistent with its espoused strategy to invest in its core capabilities, Imperial has decided to dispose of the business and insurance licenses of Regent. As motor-related financial services remain core to the Group’s strategy, the transaction will be structured to allow the Group to retain access to the income flows generated by the distribution of vehicle-related insurance and value-added products through the Group’s dealership network with the use of cell captives.

Since the issuing of the last cautionary renewal, the due diligence is progressing positively and the parties have agreed to extend the initial three month exclusivity period to the end of September when shareholders will be advised of developments.


Imperial’s investment in Cullinan shares was sold for R122 million.



R million HY1
  % change
on HY1
  % change
on HY2
  2015   2014   % change
Revenue 56 234   9   54 253   4   110 487   103 567   7  
Operating profit 2 872   (9)   3 363   11   6 235   6 185   1  
Operating margin (%) 5,1       6,2       5,6   6,0      
Return on Invested Capital (%)                 11,8   13,0      
Weighted average cost of capital (%)                 8,8   9,1      

Revenue increased by 7% to R110,5 billion. Excluding current year acquisitions, revenue was up 3% but operating income declined 4%. Revenue for continuing operations, excluding Regent, was R107,5 billion, up 7%.

Operating profit increased by 1% for the financial year to R6,2 billion, supported by a stronger second half performance and acquisitions, which was up 17% on the first half. Operating profit from continuing operations, excluding Regent, declined 1% to R5,7 billion. The Group operating margin reduced from 6,0% to 5,6% mainly as a result of a R558 million operating profit decline in the Vehicle Import, Distribution and Dealership division.

Net finance costs increased 29% to R1,2 billion on increased debt levels and an increase in the Group’s blended cost of debt. Increase in debt is due to acquisitions, additional working capital and capital expenditure. Despite the higher net finance costs, interest covered by operating profit remains sound at 5.2 times (2014: 6.7 times).

Income from associates and joint ventures contributed R32 million (2014: R76 million). The decline was due mainly to the negative performance of Ukhamba, resulting from the impairment of its investment in DAWN. The joint venture through which we import and distribute Chery and Foton products (Chinese automotive brands) was under pressure and recorded losses in the current year. Mix Telematics, in which Imperial holds a 25,3% shareholding, contributed R33 million, down 18% from the prior year.

The effective tax rate of 26,6% was slightly down compared to 27,2% in the prior year.

Net profit attributable to non-controlling interests (minorities) reduced from R355 million to R332 million. The increase in minorities as a result of the recent acquisitions was more than offset by significantly lower profits from the Vehicle Import, Distribution and Dealerships division which has the most significant minorities.


  2015   2014   % change  
Basic EPS (cents) 1 582   1 687   (6)  
Diluted EPS (cents) 1 568   1 666   (6)  
Basic HEPS (cents) 1 624   1 625      
Diluted HEPS (cents) 1 609   1 606      
Basic Core EPS (cents) 1 754   1 815   (3)  
Diluted Core EPS (cents) 1 736   1 790   (3)  


R million 2015   2014   % change  
Net profit attributable to Imperial shareholders (earnings) 3 054   3 272   (7)  
Profit on disposal of assets (85)   (192)      
Impairments of goodwill and other assets 95   84      
Profit on sale of businesses (17)   (74)      
Other 84   17      
Tax effects of re-measurements 13   42      
Non-controlling interest (9)   2      
Headline earnings 3 135   3 151   (1)  
Amortisation of intangibles 415   336      
Foreign exchange gain on intergroup monetary items (104)        
Future obligations under an onerous contract   64      
Charge for amending conversion profile of deferred ordinary shares   70      
Re-measurement of contingent considerations, put option liabilities and business acquisition costs 63   20      
Non-controlling interest and other (37)   (3)      
Tax effects (85)   (119)      
Core earnings
3 387   3 519   (4)  

Attributable earnings in the prior year were enhanced by the profit on disposal of property, plant and equipment (R192 million) and the sale of the Tourism businesses. Included in ‘other’ above is the loss on sale of shares and the impairment of Ukhamba’s investment in DAWN which reduced attributable earnings in the current year. This largely explains the year-on-year difference between attributable earnings of minus 7% versus headline earnings of minus 1%.

The major year on year difference between headline earnings and core earnings is the foreign exchange gain (once-off) on intergroup monetary items of R104 million, partially offset by the additional amortisation of intangibles of R79 million. In the prior year the headline earnings were reduced by the onerous contract provision in the Logistics International division and the charge for amending the conversion profile of the deferred ordinary shares.




Goodwill and intangible assets 7 193     6 766     6  
Investment in associates and joint ventures 1 351     1 418        
Property, plant and equipment 10 967     10 469        
Transport fleet 5 610     5 322        
Vehicles for hire 3 603     2 945     22  
Investments and loans 357 **   2 468     (86)  
Net working capital 9 874 ***   8 033     23  
Other assets 1 428     1 516        
Assets classified as held for sale 4 618              
Net debt (14 493)     (11 441)     27  
Non-redeemable non-participating preference shares (441)     (441)        
Other liabilities (8 121)     (8 946)     (9)  
Liabilities directly associated with assets classified as held for sale (2 713)              
Total shareholders’ equity
19 233     18 109        
Total assets 65 712     59 021     11  
Total liabilities 46 479     40 912     14  
* Vehicles on rental to Car Hire companies were reclassified out of Inventory into Vehicles for hire.
** The decrease in Investments and loans relates to Regent’s investments now classified as “held for sale”.
*** Net working capital includes working capital arising from acquisitions and the prior year includes negative working capital of R929 million for Regent.

Property plant and equipment increased by R498 million to R11,0 billion due mainly to investments in properties.

Goodwill and intangible assets rose to R7,2 billion as a result of the Imres, S&B Commercials and Pharmed acquisitions.

The transport fleet increased due to the R789 million expansion of the shipping fleet in the Logistics International division.

Motor vehicles for hire are up R658 million due to increases in forklifts and industrial equipment, demonstration vehicles and vehicles rented to other car rental companies.

Net working capital as disclosed above, increased by 23%. After restating 2014 to exclude the Regent Insurance business, the increase is 11%. This is due to acquisitions, increases in receivables and inventory, and a decrease in payables in the Logistics International business. As a result, our average net working capital turn reduced to 13.0 times from 14.6 times in the prior year.

Total assets increased by 11% to R66,0 billion due mainly to acquisitions, higher levels of working capital and capital expenditure.

Net debt to equity (including preference shares as equity and including Regent’s cash resources) at 69% was higher than the 62% at June 2014 due to the increase in working capital, acquisitions and capital expenditure. In addition to higher debt levels, as noted below, this ratio was affected by a put option liability of R473 million. The net debt level is within the target gearing range of 60% to 80%; the net debt to EBITDA ratio at 1.6 times (2014: 1.4 times) remains prudent.

Shareholders’ equity was impacted negatively by: a put option liability of R473 million relating to the minority shareholdings in Imres; the strengthening of the Rand against the Euro, which resulted in a loss on the foreign currency translation reserve of R309 million; and a R93 million reduction resulting from the re-measurement of defined benefit plans in the Logistics International division.




Cash generated by operations before movements in working capital 9 049   8 674     5  
Movements in net working capital (50)**   (2 701)        
Cash generated by operations before capital expenditure on rental assets
8 999   5 973     51  
Capital expenditure on rental assets (1 531)   (811)        
Interest paid (1 180)   (926)        
Tax paid (1 301)   (1 267)        
Cash flows from operating activities
4 987   2 969     68  
Net new business acquisitions (938)   (297)        
Capital expenditure (non-rental assets) (2 988)   (2 788)        
Equities, investments and loans (1 025)   969        
Dividends paid and share buy backs (1 780)   (2 442)        
Other (217)   (383)        
Increase in net debt
(1 961)   (1 972)      
Free Cash flow
4 514   2 138     111  

* Vehicles on rental to Car Hire companies were reclassified out of Inventory into Vehicles for hire.
** Movements in net working capital exclude working capital arising from acquisitions.

Cash generated by operations before capital expenditure on rental assets was R9,0 billion compared to R6,0 billion in 2014. This was due mainly to more effective working capital management. After interest, tax payments and capital expenditure on rental assets, net cash flow from operating activities increased to R5,0 billion from R3,0 billion last year.

The main contributors to the net R938 million invested in new business acquisitions during the year were Imres, S&B Commercials and Pharmed.

Net replacement and expansion capital expenditure, excluding rental assets, was 7% higher, which included substantial investment by the Logistics International division in the South American contract, investment in fleet in the Logistics Africa division and higher property investments by the South African businesses.

Outflows from equities, investments and loans resulted mainly from Regent investing in foreign equities and longer term deposits.

Dividends amounting to R1,7 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 46% of total debt and 73% is of a long term nature. The Group’s credit rating as determined by Moody’s was unchanged at Baa3 with a stable outlook.


A final dividend of 445 cents per ordinary share (2014: 420 cents per share) has been declared.


As announced on 7 May 2015, Mr. Thulani Gcabashe has elected to resign from the board of Imperial Holdings Limited at the conclusion of the AGM on the 3rd November 2015 pursuant to his appointment as Chairman of Standard Bank Group Limited. As announced yesterday, Dr Suresh Kana, recent past Chief Executive Officer of PwC, will be appointed as an independent non-executive director of Imperial Holdings Limited from the 1st September 2015 and as Chairman of the board from Mr Gcabashe’s resignation.

During the year the resignations of Messrs Brody, Riemann, Hiemstra and Engelbrecht were announced.

Messrs Peter Cooper and Graham Dempster were appointed on 24 February 2015, having enjoyed highly distinguished executive careers, most recently with RMB Holdings and Nedbank respectively. Since then Mr Cooper has been appointed chair of the newly constituted Investment Committee and Mr Dempster a member of the Audit Committee.

As previously announced, after 13 years as an independent non-executive director and chairperson of the Audit Committee, Mr. Mike Leeming will retire from the Board on 30th August 2015. He will be succeeded, effective 1st September 2015 by 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.

Mr. Mohammed Akoojee will resign from the board of Imperial Holdings as an executive director on 30th September 2015 pursuant to his appointment as Chief Executive Officer of the Rest of Africa sub division of Imperial Logistics Africa on 1st October 2015.


The factors contributing to heightened uncertainty and volatility in economies, markets and industries globally are well publicised, as are the additional consequences of unemployment, low growth and confidence, increasing socio-political tensions, and electricity supply failures facing South African business. None of these are expected to change markedly in the short to medium term.

The factors most relevant to the fortunes of Imperial are: the weakening of the Rand against the currencies in which we import new vehicles; the poor state of the South African economy; a much slower than expected recovery of the German economy; and the impact of political uncertainty and a sustained low oil price on the economy and currency of Nigeria.

In the absence of a marked deterioration in current conditions we expect Imperial to produce single digit growth of revenue and operating profit for continuing operations in 2016. 2016 performance to date is in line with expectations.

The Group has embarked on various strategies to enhance the value added by Imperial Holdings and the competitiveness and sustainability of its subsidiaries. We are confident that these initiatives will improve risk adjusted returns and unlock shareholder value in the medium term.

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.



Notice is hereby given that a gross final preference dividend of 380,51712 cents per preference share has been declared payable, by the Board of Imperial, 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 323,43955 cents per share.

The total number of preference shares in issue at the date of declaration is 4 540 041.


Notice is hereby given that a gross final ordinary dividend in the amount of 445 cents per ordinary share has been declared payable, by the Board of Imperial, 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 378,25 cents per share.

The total number of ordinary shares in issue at the date of declaration is 202 782 278.

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 Thursday, 17 September
Preference and ordinary shares commence trading ex-preference dividend and ex-ordinary dividend respectively Friday, 18 September
Record date Friday, 25 September
Payment date Monday, 28 September

The company’s income tax number is 9825178719.

Share certificates may not be dematerialised/rematerialised between Friday, 18 September 2015 and Friday, 25 September 2015, both days inclusive.

On Monday, 28 September 2015, 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 28 September 2015 will be posted on or about that date. Shareholders who have dematerialised their shares will have their accounts, held at their CSDP or Broker, credited on Monday, 28 September 2015.

On behalf of the board

RA Venter
Group Company Secretary

24 August 2015


These summarised consolidated financial statements for the year ended 30 June 2015 have been audited by Deloitte & Touche, who expressed an unmodified opinion thereon. The auditor also expressed an unmodified opinion on the annual 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 annual consolidated financial statements are available for inspection at the company’s registered office, together with the financial statements 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.