A total of 34 non-strategic properties have been sold since July last year, and the disposal of 17 was being negotiated, the group said yesterday in a pre-closed period briefing to investors and a trading update.
The sale of the properties is in line with the major restructuring of the group launched in late 2014.
Imperial’s new group and capital allocation strategy resulted in the company, among other things, announcing in August last year that it planned to dispose of R2.6bn in mainly non-strategic properties through sales or sale-and-leaseback agreements.
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The strategy also involved disposing of some major businesses, including Regent, and 32 smaller businesses.
The aim of the strategy is to create long-term value for shareholders through strategic and structural clarity, operational excellence, financial discipline and strictly defined capital-allocation principles.
Imperial chief executive Mark Lamberti said in August last year that the properties the group would sell were pieces of vacant land, properties where the market had moved or properties the group did not need to own but could rent.
Lamberti said Imperial would have a property portfolio valued at R8bn after the disposals.
Yesterday, the group said that, since the second half of 2014, 42 businesses generating total revenue of R11.8bn and operating profit of R886m, as well as 82 properties, either had been sold or were in the process of being sold in a number of unrelated transaction in various jurisdictions.
“The total capital employed in these businesses and properties totals R4.4bn,” it said.
The planned sale of Regent was in line with one of Imperial’s capital-allocation objectives, which was to release capital and sharpen executive focus by disposing of non-core, strategically misaligned, under-performing assets.
The Competition Tribunal last month approved the sale of Regent to Hollard for about R1.8bn, including the R697m proceeds from Regent Africa.
Imperial said on Tuesday the transaction was subject to approval by the Financial Services Board.
The group expects a single-digit increase in revenue and no change in its operating profit for the year to June.
However, headline earnings a share would be depressed by a significant increase in foreign exchange losses and higher financing costs.
The group said the trading environment in South Africa remained challenging. In the six months to December, its South African operations generated R35.2bn, or 59 percent, of group revenue, and R1.9bn, or 64 percent of group operating profit.
It said the factors that affected Imperial in South Africa in the first half of this year were negative real growth in retail sales; improved demand for commodities; a decline in new vehicle sales; and the volatility of the rand, which created foreign exchange hedging losses and increased the cost of inventory, thereby making imported vehicles less competitive.
Shares in Imperial rose 0.74percent on the JSE on Tuesday to close at R159.82.
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