Integrated performance and overview of results


1. Diluted core earnings exclude once off and non-operational items.

Divisional Revenue
Divisional Revenue
 
Revenue (R million)   Operating profit (R million)
Revenue (R million)   Operating profit (R million)
Basic core earnings per share (cents)   Total assets (R millon)
Basic core earnings per share (cents)   Total assets (R millon)

OVERVIEW

Imperial produced a satisfactory result for its 2014 financial year. The Group’s portfolio of businesses proved to be resilient and performed to expectation in challenging trading conditions. All divisions except the Vehicle Import, Distribution and Dealership division showed good growth on the prior year. Revenue increased 12% to R103,6 billion, exceeding R100 billion for the first time. Operating profit increased 2% to a record R6,2 billion, lagging revenue growth as margins in the Vehicle Import, Distribution and Dealership division were depressed by the delayed impact of a weak Rand.

Diluted Core EPS held steady at 1790 cents per share and diluted HEPS decreased 7% to 1 606 cents per share. A full reconciliation from earnings to headline earnings and core earnings is provided in the financial performance section.

The return on equity of the group was 19% and, notwithstanding the significant organic and acquisitive investment over the last four years, the net debt to equity ratio (excluding preference shares) at year end was 63%, well within the targeted range of 60 – 80%. Cash flow from operating activities declined 28% to R3 billion largely as a result of higher working capital levels.



GROWTH TREND IN FOREIGN BUSINESSES
Revenue (R million)   Operating profit (R million)
Revenue (R million)   Operating profit (R million)
GROWTH TREND IN NON-MOTOR BUSINESS
Revenue (R million)   Operating profit (R million)
Revenue (R million)   Operating profit (R million)
 
Divisional Revenue
Divisional Revenue


 

 

 

 

 

 

 

 


STRATEGY

These results reflect progress with Imperial’s previously espoused intent to decouple the Group’s performance from the cyclicality of South African new vehicle sales, by investing in, or developing, less correlated businesses where our experience and expertise enables us to provide value in new markets and geographies.

This strategy resulted in non-vehicle revenue increasing 20% to R45,5 billion (44% of group revenue) with foreign revenue increasing 26% to R35,1 billion (34% of group revenue). Non-vehicle operating profit increased 26% to R3,3 billion (54% of group operating profit) and operating profit from foreign operations increased 30% to R1,6 billion (27% of group operating profit), while operating profit from African operations outside of South Africa increased 32% to R523 million.

In addition the group enhanced its portfolio by exiting sub scale operations and investing in assets and acquisitions that will enhance growth, returns and sustainability for our stakeholders.

These results also reflect the start of a more recent drive to eliminate complexity in the management and reporting of Imperial. In this regard the group’s three major lines of business: logistics; vehicles; and financial services (respectively generating 35%, 48% and 17% of group operating profit) will be managed through five divisions: Logistics Africa (including South Africa); Logistics International (all non-African countries); Vehicle Import, Distribution and Dealerships; Vehicle Retail, Rental and Aftermarket Parts (which will now include Car Rental and Aftermarket Parts previously reported on separately); and Financial Services.