Prospects

In the short term, we expect trading conditions in the Southern African logistics division to remain challenging. The pressure on our manufacturing client base persists and volumes remain under pressure. In the medium to long term, the fundamentals of the logistics market are very good as customers outsource more of their activities to logistics specialists and expectations are that industry growth will exceed that of GDP. Given Imperial’s infrastructure and network, it is ideally positioned to capitalise on these growth opportunities and gain more business.

Expansion into Africa is a key priority and will continue to gain momentum. CIC will also play a key role in our African expansion into the fastgrowing FMCG sector. Acquisitions in both South Africa and the rest of Africa will be a further growth driver.

The strong growth experienced in our International Logistics division over the past three years has created a substantial base for further growth. The Lehnkering acquisition and the favourable terms of the financing arrangements will make a positive impact on the results for the coming financial year as it will make a contribution for the full year. Despite the economic crisis in Europe, we are positive about the medium term prospects of our International Logistics business. It is well positioned in attractive niches in the logistics industry in Germany and acquisitions could be a further growth driver. Our management in Germany continues to be vigilant in assessing the situation across Europe in order to be able to react to any significant developments that affect our related business and volumes.

In a competitive car rental market, we are focused on improving brand awareness and yield, while optimising our fleet size and managing costs even tighter. Used vehicle demand is expected to improve on the back of a weaker currency as the gap between the cost of new and used vehicles widens. Results from our tourism operations will continue to be affected by global economic conditions.

The growth rate in new vehicle sales in South Africa is expected to slow as the base is now substantially higher, however, the recent reduction in interest rates will support demand. Despite the recent weakening of the currency, cars remain affordable as vehicle price increases lag inflation. The growth in the car parc of our brands will enable us to earn increasing annuity income streams from parts and service activities. Businesses that augment and are allied to our motor related activities should also continue to grow.

The Autoparts business is not affected directly by new vehicle sales and should continue to perform solidly as initiatives to expand its product range and geographic footprint bear fruit. Goscor will continue performing well as it capitalises on a strong order book, growth in its rental business and after sales maintenance opportunities.

Whilst underwriting conditions are unpredictable, earnings in the Financial Services division should grow in the future. We have not yet reached our full potential in this market and there is still significant opportunity in this area of the group due to our positioning in the motor industry. Regent’s investment portfolio continues to be conservatively managed. Liquid Capital will continue leveraging its position by innovating new products and partnerships to create new sources of revenue and growth. It will generate growing annuity earnings on the back of new business being placed on its book in the current strong vehicle sales cycle.

Overall, our businesses are well positioned in each of their markets to seek growth opportunities in and adjacent to their existing industries. Despite significant organic and acquisitive growth during the last few years, the group’s statement of financial position remains strong and can therefore take advantage of such opportunities as they arise.

The group experienced strong growth over the past number of years and has established a much higher level of performance. Given current market conditions, growth is expected in the 2013 financial year, albeit at a slower rate.