CAPE TOWN - IMPERIAL Holdings has forecast double-digit growth in revenue, operating profit and continuing earnings per share for its 2021 financial year following the marginal decline in interim earnings reported yesterday.
The Africa-focused market access and logistics solutions group saw a recovery in sales volumes and profitability in the second half of 2020 and headline earnings fell marginally by 3 percent to 185 cents a share for the six months to December.
The small decline in headline earnings was underpinned by a 15 percent rise in revenue to R26.4 billion, and an 18 percent decline in operating profit to R1.2bn.
A cash interim dividend of 83 cents was paid after the board considered the strong balance sheet and steady recovery in operations in a challenging environment, but the payout was well down from 167 cents at the same time last year.
The strength of the balance sheet was evidenced by strong cash flows from continuing operations of R671 million versus R54m at the same time last year. The European shipping business was sold for R3.44bn during the period.
Chief executive Mohammed Akoojee said that in the extraordinary and tough trading conditions exacerbated by the pandemic, revenue from continuing operations increased, stringfree cash flow was generated, a strong balance sheet was maintained, costs were stringently managed and progress against strategy was made.
Acquisitions worth R120m were concluded and the sale of Pharmed was finalised.
Imperial's business had been negatively impacted by various levels of Covid-19 lockdown restrictions in many of its markets in the six months.
Some R200m of costs in Logistics Africa were removed, with the bene-fits of this expected from the 2022 financial year. The group played its role to supply essential products and services in its countries and communities of operation so that clients and principals could receive medication, food and other essentials.
A task force was set up to participate in the distribution of vaccines – the group was well-positioned to provide logistics and distribution capabilities for Covid-19 vaccines in South Africa and other African countries, he said. Imperial was participating in the tender process in South Africa.
“We want to become a ‘One Imperial' business and serve as the ‘Gateway to Africa' for our clients, principals and customers – from an asset-heavy, logistics player to an innovative, assetright business,” Akoojee said,
Some R100m had been invested in systems, resources and structures, a process that would continue for three years.
Capital allocation would be prioritised for areas of strategic focus – Africa, and in five key industries: health care, consumer, chemicals, automotive and industrial and commodities.
Growth opportunities were being sought in the Market Access and Logistics Africa businesses on the African continent, outside of South Africa.
Logistics International was deemed non-core and an exit of the business was planned, a process that might take time.
The impact of the pandemic and the ensuing uncertainty were expected to continue to affect operations and performance in the short-term.
Imperial's share price at yesterday's market close on the JSE was R44.64, down 3.48 percent on the day.
BUSINESS REPORT