Imperial Holdings, the listed transport and mobility group, defended the introduction of electronic tolling in Gauteng, calling it “a necessary evil”.
Hubert Brody, Imperial’s chief executive, said yesterday that Gauteng was the economic heartland of South Africa, contributing 40 percent of the country’s gross domestic product, and therefore the province needed world class roads.
Brody said there should not be any compromise on this if there was not to be any negative impact on the economy.
“It is the price that has to be paid for that and will be picked up by the economy. Pay-as-you-go is probably the most appropriate way and a necessary evil,” he said.
Brody confirmed that Imperial subsidiary e-Logics, which has developed a toll management solution Tx Point, had developed software for the gantries across highways and for the records kept by the SA National Roads Agency.
Brody was speaking at a presentation after Imperial reported sparkling results for the six months to December, driven largely by the group’s automotive distribution and retail businesses and its southern African logistics business.
Diluted headline earnings a share grew by 44 percent year on year to R6.90.
Revenue rose 22 percent to R31.36 billion and
operating profit improved by 48 percent to R2.13bn The operating margin increased to 6.8 percent from 5.6 percent.
An interim dividend of R2.20 a share was declared, nearly 50 percent higher than the R1.50 declared in the previous corresponding period.
Brody said sterling performances were achieved across all divisions and the group’s strategy was working well in all its core markets.
This was reflected in the very strong organic growth across the group together with acquisitive growth in selected areas, where it had invested a further R1bn.
Brody said trading conditions improved overall and a recovery in the local consumer market and German economy boosted the group’s automotive and logistics businesses.
The star performer was the distributorship division, which increased operating profit to R928m from R380m.
New vehicle unit sales by the group in South Africa grew by 49.4 percent to 45 045 units to outperform the growth experienced by the industry.
Brody said the strong increase in Imperial’s new vehicle sales largely occurred in the sale of fully built up imported models by Associated Motor Holdings, which was assisted by the variety of new models launched during the period, the attraction of its model range and the stable currency.
The recovery in vehicle sales was also beneficial to the group’s related financial services products, he said.
Imperial distributes and sells Kia and Hyundai in South Africa, among other brands.
Brody said acquisitions over the past 15 months had added about R7bn of annual turnover to the group and its strategy remained to focus on growth in selected areas of the existing businesses where there was proven expertise.
The southern African logistics division was boosted by the acquisition of CIC, growing revenue by 27 percent to R6.5bn and operating profit by 19 percent to R436m.
A new division, Imperial Logistics Africa, has been established by combining the businesses that operate on the continent outside of South Africa into one management and strategic structure with the aim of providing a sharper focus on the expansion of Imperial’s footprint into Africa.
Brody said Imperial’s overall prospects remained good and it expected its businesses to continue benefiting from the momentum in the markets in which it operated.
Imperial shares fell 1.7 percent to R112.31 yesterday. - Roy Cokayne