The logistics group says R33.7bn, or 58%, of revenue; and R1.8bn, or 65%, of operating profit, was generated in SA in the six months to December last year. In that period, Imperial's half-year revenue for continuing operations grew 6% to R58.2bn, and half-year operating profit grew 4% to R2.8bn. "In the rest of Africa, falling commodity demand and the consequent impact on currencies and private consumption have reduced the growth rate," Imperial said on Wednesday.
Despite this, the share rose 7.76% in late trade on the day.
The rest of Africa contributed R6.9bn, or 12%, of group revenue and R450m, or 16%, of group operating profit in the six months to December. But Imperial said specific factors had affected it in certain African countries. These included slowing growth rates and currency volatility and devaluation.
The eurozone's slow economic recovery continued and trading conditions were satisfactory in the region, the group said. It made R17.6bn, or 30%, of group revenue, and R500m, or 19%, of group operating profit, there in the six-month period.
"Against the background of a major weakening in the economy, as well as rand depreciation, the company appears to be heading in the right direction," said Cratos Capital portfolio manager Ron Klipin.
He said Imperial's new CEO, Mark Lamberti, had "a new vision" for Imperial that included capital recycling from the sale of noncore assets, as well as the building up of offshore logistics operations. "This also entails a lesser reliance on motor vehicle sales, while focusing on ancillary higher-margin business in this sector," he said.
Imperial said factors affecting business in the eurozone were solid UK growth and the weakening of the rand against the pound and the euro. This development helped rand-denominated results, it said.
Group strategy involves disposing of noncore, strategically misaligned, underperforming, or low-return assets. To date, although certain transactions were still subject to regulatory approval, businesses and assets to the value of R5.3bn had been disposed of, Imperial said.
"Over the next 18 months, it is anticipated that disposals of mainly nonstrategic properties amounting to a further R2.6bn will occur. We will invest capital in SA to maintain the quality of our assets and our market leadership in our logistics and motor vehicle businesses," it said.
Mark Hodgson, an analyst at Avior Capital Markets, said it was a "broadly reassuring" update. "Reorganisation to consolidate Imperial's vehicle division is unlikely to deliver immediate results, but should make it a more efficient and sustainable business over the medium to long-term," he said.
Source: Business Day
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