Johannesburg - Imperial Holdings, the listed diversified logistics and transport group, delivered a solid financial performance in the year to June despite challenging trading conditions in South Africa and Europe.
The group yesterday reported that diluted headline earnings a share grew 16 percent year on year to R17.30.
Revenue was 14 percent higher at R92.38 billion.
Operating profit increased by 8 percent to R6.09bn but the group’s operating margin deteriorated to 8.7 percent from 9 percent in the previous year.
A final dividend of R4.40 a share increased the dividend for the full year to R8.20, which is 21 percent higher than last year’s R6.80.
Hubert Brody, the chief executive of Imperial Holdings, said yesterday that all divisions in the group had achieved operating profit growth and the group’s portfolio of businesses proved to be resilient despite challenging trading conditions in South Africa and Europe.
“We have continued to add areas of strategic growth in and adjacent to existing industries and geographies that will maximise returns. Our international activities generated significant growth and we are pleased with the performance of the recently acquired Imperial Health Sciences,” he said.
Brody said the new vehicle market was favourable during the year with good credit availability, improved affordability and continued low interest rates underpinning its growth.
He said the current cycle in the motor industry favoured the group’s financial services pillar with new business growth driven off the back of an increase in vehicle sales in a favourable new car market, which provided a valuable annuity earnings underpin to the group’s future profits.
However, Brody said industrial action had impacted the group over the year, with supply from Korea being disrupted by strike action and shortened work hours at the Hyundai and Kia plants, while the national transport industry strike in South Africa in September and October last year significantly curtailed the logistics division’s ability to service its South African transport clients for more than three weeks.
Brody said trading conditions in the group’s South African logistics business were challenging, especially in the manufacturing and certain retail sectors, while the international logistics division had to contend with a slowing European economy during the year in an environment where some of its core markets were under pressure with lower transport volumes and freight rates.
Brody said the group expected it would be more difficult to achieve meaningful growth in the 2014 financial year because of current market conditions. However, he said net debt was below the target gearing range of 60 percent to 80 percent and left significant room for further expansion
Imperial shares gained by 3.83 percent to R211 yesterday. - Business Report