IPL IPLP
IPL
IPL/ IPLP - Imperial - Update On Trading Environment
Imperial Holdings Limited
Registration number: 1946/021048/06
Share code: IPL
ISIN: ZAE000067211
Preference share code: IPLP
ISIN: ZAE000088076
("Imperial")
UPDATE ON TRADING ENVIRONMENT
Given the current market conditions and global economic slowdown, Imperial
wishes to provide investors with an update on the prevailing conditions in the
markets in which Imperial operates and the impact thereof on the group over the
first four months of the financial year.
The group operates in the following markets:
- Logistics in South Africa and Europe
- Car rental and tourism
- Motor vehicle importation, distribution and retailing
- Motor related and other financial services
Logistics Southern Africa
In Southern Africa, conditions in logistics are satisfactory despite a slowdown
in demand from customers operating in consumer driven sectors. General freight
movement, warehousing and supply chain services are holding up although some
weakness is expected going forward based on the general slowdown in economic
activity in a number of sectors.
Logistics Europe
In Germany, where the bulk of our European logistics operations are based, the
government has made available an Euro500 billion stimulus package to support
financial markets. Freight volumes in the inland waterway shipping division
still remain relatively strong, except for coal and iron ore transport where a
slowdown is being experienced. Containerised and bulk freight handling in the
port terminal operations remained busy but is expected to slow down in the
remaining part of the year. The automotive and steel logistics operations have
slowed down and this is expected to continue in the new year. The recent
acquisitions in Europe are being successfully integrated and our new container
capacity is coming on stream.
Car Rental and Tourism
The car rental market is under some pressure where volumes are weaker than
anticipated mainly due to a slow down in domestic leisure and inbound travel
which is impacting utilization. We are satisfied with the rental rates being
achieved. Used car volumes and profit margins are slightly weaker than the
previous year. Volumes and profitability in our tourism operations remain
acceptable.
Motor retail, import and distribution
Motor retail business saw a continuation and further deterioration of extremely
weak trading conditions. With a high fixed cost component, these businesses are
unable to deliver acceptable returns under current market conditions, although
both our distributorships and dealerships divisions are profitable. These
conditions are expected to remain until sufficient interest rate reductions have
been effected to restore the financial position of consumers. Aggressive cost
reduction initiatives are being pursued in our businesses and generally
throughout the industry. Commercial vehicle operations are performing better
than passenger vehicles, but are also slowing down.
Insurance and banking
Underwriting results in the insurance division are satisfactory although the
credit life business remains under pressure from lower policy sales and higher
lapses. Notwithstanding the fact that the majority of our investable insurance
funds are in cash instruments, the overall results of the division are severely
depressed by the performance of its equity portfolio in line with the market.
Results from our banking interests are negatively affected by higher bad debt
provisions in the consumer market.
Discontinued operations
The sale of the aviation division is near to completion with some conditions
precedent remaining to be fulfilled. The collection and realisation of the
assets of Commercial Vehicle Holdings is progressing well. The proceeds of the
sale of our investment in Tourism Investment Corporation Limited have been
received.
This announcement may contain certain forward looking statements which are
subject to factors which are outside the group`s control. Such forward looking
statements are made based on the knowledge of the group at today`s date. Any
statement or information that could be considered as being forecasted financial
information has not been reviewed and reported on by the auditors of Imperial
either in accordance with ISAE 3400 or ISAE 3000 (Revised). Shareholders should
note that this is not a trading statement as contemplated in section 3.4 of the
JSE Listings Requirements.
Company Secretary
RA Venter
By order of the Board
19 November 2008
BEDFORDVIEW
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 20/11/2008 09:05:45 Produced by the JSE SENS Department.
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