These results reflect progress with Imperial’s previously espoused intent to decouple the Group’s
performance from the impact of currency weakness on the Vehicle Import, Distribution and Dealership
division, as it pertains specifically to the competitiveness and profitability of new vehicles that are
imported directly. Progress towards this objective has been achieved by investing in or developing less correlated activities within the vehicle value chain as well as in businesses where our capabilities, experience and expertise enable us
to grow at acceptable, sustainable rates of return in new markets and geographies.
During the reporting period this approach resulted in non-vehicle revenue increasing 13% to R25 billion (45% of Group revenue) with foreign
revenue increasing 23% to R21 billion (36% of Group revenue). Non-vehicle operating profit increased 6% to R1,7 billion (57% of Group
operating profit) and operating profit from foreign operations increased 20% to R856 million (30% of Group operating profit), while operating
profit from African operations outside of South Africa increased 60% to R383 million.
The refinement of the Imperial portfolio remains an imperative in pursuit of sharper executive focus and higher returns on capital and effort
in the medium term. This will be accomplished firstly by investing in assets and acquisitions that will improve growth, returns and sustainability
for stakeholders and secondly by disposing of those that are non-core, strategically misaligned, underperforming or of low return on effort.
ENVIRONMENT
Consumer and business confidence in South Africa remained fragile exacerbated by electricity shortages. Continually deteriorating business
conditions were generally more challenging than in the comparable period.
African markets served by Imperial to the north of South Africa experienced higher growth, with terrorism and the more recent reduction
of the oil price yet to have an impact on the performance of our businesses.
With the exception of the United Kingdom, the recovery of the Eurozone remained tentative, particularly in Germany where Imperial
has extensive operations. |
