IMPERIAL Holdings had an "outstanding" set of results in the year to June following an "exceptional" year in its European logistics business, with South African vehicle sales also joining the party.
The group says it had strong revenue and profit growth across its businesses. Logistics in South Africa "performed satisfactorily", despite tough trading conditions, which were offset by acquisitions, and significant contract gains and renewals.
The diversified logistics and services provider saw revenues rise 25%, with headline earnings per share climbing 14%.
"It’s a very good set of results," CEO Hubert Brody said on Wednesday. "The company has really grown in scale over the past few years."
He said while South Africa’s industrial sector was "quite lacklustre", German exports, new European contracts, and a weaker euro drove earnings, along with favourable vehicle financing rates in South Africa.
"We had an exceptional year (in international logistics) — it generally exceeded our expectations," Mr Brody said.
He said 28% of that division’s revenue came from transport of chemicals, especially those used in agro-business.
He also said Poland and the UK presented opportunities for the group.
Southern African logistics were under "some pressure" Mr Brody said, but regional transport corridors were "becoming more reliable".
However, the group’s distributorships division in South Africa also had an "exceptional" year, with operating profit up 33%.
The division imports and distributes industrial equipment, and also a range of passenger and light commercial vehicles and automotive products.
Imperial’s automotive retail division also saw "good" growth, and maintained "healthy" margins.
The financial services division "performed satisfactorily" across life insurance, vehicle financing, warranties and maintenance products, and fleet management operations.
The car rental and tourism business was extremely competitive, but "performed well" in the second half, notwithstanding sluggish markets.
"Imperial delivered a solid set of results. This was mainly driven by its distributorships, which contributed nearly 40% to earnings before interest and tax," Abdul Davids, head of research at Kagiso Asset Management, said on Wednesday.
He said the distributorships and dealerships had done "particularly well" over the period, and robust new vehicle sales had contributed to record-high margins.
"At 39%, Imperial’s gearing levels are manageable given the company’s strong free cash flow generation," he said.
But he said management had stated it was "cautious going forward" as conditions for South African logistics were expected to remain challenging.
In addition, new vehicle sales were expected to slow from existing levels.
Imperial said the integration of newly acquired German logistics group Lehnkering was successful and performed in line with expectations.
The group had spent R1.9bn on acquisitions this year, raising debt to just above R3bn, Mr Brody said.
"(But) acquisitions over the past three years will contribute (an) annualised R15bn to turnover," he said.