IPL IPLP
IPL
IPL - Imperial Holdings Limited - Unaudited results for the half year ended
25 December 2006
Imperial Holdings Limited
Registration number (1946/021048/06)
Ordinary share code: IPL ISIN: ZAE000067211
Preference share code: IPLP ISIN: ZAE000088076
Unaudited results for the half year ended 25 December 2006
Highlights
* Headline earnings per share up 21% to 749 cents
* Revenue up 29% to R33.4 billion
* Attributable profit up 25% to R1 599 million
* Strong cash flow and investment in growth opportunities
* Distribution to shareholders up 22% to 280 cents per share
Overview of results
The effects of a modest slow down in consumer spending and a weaker Rand
were absorbed by a continued strong performance by our non-consumer driven
divisions, vehicle dealerships and financial services businesses. The
result is 21% growth in headline earnings per share to 749 cents, which was
achieved from a high base set in the first half of our previous financial
year when HEPS was 34% higher than the previous year. The reported HEPS
growth was positively impacted by the board`s decision to achieve a more
appropriate treatment of Imperial`s investment in Lereko Mobility by the
deconsolidation the group`s investment therein (see below).
Imperial has now been listed for 20 years. During the period, the market
capitalization increased a thousand times from R35 million to R35 billion
while earnings per share grew by 29% per annum compounded annually.
Revenue at R33,4 billion was 29% higher than the previous year, although
this was assisted by the acquisitions of MCC and our United Kingdom
operations, Imperial Commercials and Multipart.
Operating profit at R2,5 billion was 17% better, with the strongest
contributions coming from the Leasing, Motor Dealerships and Insurance
divisions. Operating profit declined in the Distributorships division where
the weaker Rand impacted negatively on margins. Margins were further eroded
by the introduction for the first time of the lower margin United Kingdom
truck dealerships and the low contribution from the UK parts logistics
business. Finally, Tyco returned a loss after interest, the circumstances
of which are further dealt with under the Distributorships divisional
report below.
The effect on the group`s operating margin was a decrease to 7,5% from
8,3%.
Asset growth and higher interest rates caused the interest charge to rise
by 41%, while average interest bearing debt during the period was 28%
higher.
Income from associates was 3% lower at R165 million with the biggest
contributor being R104 million (2005: R89 million) from Imperial Bank.
Associates in the Distributorships division disappointed with a small loss
compared to a profit of R28 million in 2005.
The effective tax rate amounted to 31,3%, down from 34,1%, mainly as a
result of the Lereko deconsolidation.
The distribution to shareholders has increased 22% from 230 cents to 280
cents per share.
Industry conditions
The 2% increase in the prime overdraft rate since June last year caused
vehicle sales growth to slow. Industry-wide sales for the period under
review were 12% higher than in the comparative period, it should be noted
that annual growth in the 2005 calendar year amounted to 28%. During this
reporting period, the Rand traded weaker by 11% against the US $ and by 18%
against the Euro compared to the comparative period.
Growth in demand for our other services, namely logistics, vehicle leasing,
car rental, tourism and vehicle related financial services remained strong.
Our exposure to the mining and construction industries through the newly
acquired MCC group, reported in our Leasing and Capital Equipment division,
has been particularly rewarding to us.
Deconsolidation of Lereko Mobility
In respect of our second major Black Economic Empowerment transaction
entered into during June 2005, the group provided vendor finance in the
amount of R598 million to Lereko Mobility (Pty) Limited ("Lereko") to
facilitate the raising of R800 million additional finance for the
acquisition by Lereko of 7,25% of the group`s issued capital. The
redemption of the total finance provided for the transaction, totaling some
R1,4 billion, will be settled through the disposal by Lereko of part of its
Imperial shares. The right to redemption of the vendor finance ranks behind
all the other elements of finance for the transaction. Accordingly, due to
the group`s risk relating to the vendor finance, the board at the time
considered it appropriate to consolidate the assets, liabilities and
results of Lereko as if it were a subsidiary of the group, despite the
group`s minority interest of 49% therein. By October 2006, the Imperial
share price had risen to a level at which the risk has been reduced
sufficiently for the board to conclude that the consolidation was no longer
required. Accordingly, it has been deconsolidated and is now treated as an
associate.
If Lereko had remained consolidated until the end of this reporting period,
growth in headline earnings would have increased by 11,4% to R1 287 million
and HEPS growth by 12,6% to 695 cents.
On the balance sheet, the deconsolidation caused shareholders` equity to be
R1 559 million higher, and the net debt/equity ratio to be 87% instead of
107%.
Vehicle sales
Through its various passenger and commercial vehicle retail businesses in
Southern Africa, Australia, Sweden and the United Kingdom, the group
retailed 65 541 (2005: 57 602) new and 34 592 (2005: 29 526) used vehicles
during the period. In addition, 23 012 used vehicles were sold to the
trade, while our vehicle import and distribution business, Associated Motor
Holdings sold 9 176 (2005: 6 324) new vehicles on a wholesale basis to non-
group dealers appointed by it. Renault and Tata, in each of which Imperial
holds effective interests of 49%, sold 6 905 and 10 059 vehicles
respectively during the period.
Balance sheet and cash generation
Net interest bearing debt at R10 940 million increased by 21% over June
2006. The net debt/equity ratio was 87%, including (as debt) the R300
million in perpetual preference shares which was raised in November 2006.
For credit rating purposes, the perpetual preference shares carry a 75%
equity weighting, which would reduce the net debt/equity ratio to 84%. The
proceeds of the preference share issue were utilised to provide funding to
take delivery of 2 630 386 Imperial shares in terms of a forward purchase
agreement.
Net debt/EBITDA (annualized) was low at 1,6 times (2005: 1,7).
Cash generated by operations increased by 73% mainly as a result of
improved working capital management. Investment in capital expenditure and
acquisitions amounted to R2 477 million, 11% higher than last year.
Expansion capital expenditure increased by 30% while replacement capital
expenditure declined by 18%. The cash conversion ratio was 97%, with free
cash flow amounting to R1,3 billion.
R760 million was returned to shareholders during the period through share
buybacks and capital distributions.
Expansion of the group
The dealerships division opened 2 new and 9 used car operations during the
period, and in the Distributorships division, 5 new car dealerships and two
motor bike dealerships were opened in South Africa, and a Mitsubishi
dealership was opened in Sydney, Australia. As a value added operation in
the Dealerships division, we acquired a controlling interest in Jurgens Ci
(Pty) Limited, the manufacturer and distributor of leisure caravans and
camping equipment. The transaction is still subject to approval by the
Competition Commission. Jurgens manufactures and sells approximately 2 500
caravans per annum through a network of franchised dealers.
Tourvest made seven new investments in individual tourist products in South
Africa, Nigeria and the Carribbean.
In the Leasing and Capital Equipment division, Terex Africa, the
distribution rights for New Holland earth moving equipment and Excelrate
battery charging equipment for electric forklifts and industrial batteries
were acquired effective for the second half of the year.
Imperial Air Cargo was successfully established in the Aviation division
and has gained a meaningful share of the domestic air cargo market.
Divisional reports
Logistics
R`million 2006 2005 change
Revenue 7 321 6 249 17,2%
Operating profit 425 404 5,2%
Operating margin (%) 5,8 6,5
Operating assets 8 201 7 628 7,5%
Southern Africa
The Southern African logistics business achieved operating profit of R323
million. Had we adjusted 2005`s profit by R18 million for the effect of the
partial sale of two subsidiaries to BEE entities and non-recurring events,
operating profit growth would have been 12% over 2005. The operating margin
in the local division declined from 8,3% to 7,9%, due to fuel price
increases, load imbalances and pricing pressure from strong competition.
Cash generation in this business was good, which caused the interest charge
to be maintained at R45 million after taking into account the interest rate
increase. Capital expenditure was 29% lower than last year resulting from
the late delivery of trucks.
Wage negotiations were concluded and agreement was reached for the next two
years.
The outlook for the division remains positive as it has a broad base of
blue chip customers spanning most sectors of the economy.
Europe
Imperial Logistics International grew operating profit by 5% and Revenue by
25% in Rand terms. In Euro terms, operating profit was lower by 10% and
Revenue was 6% higher. The reduced margin occurred in the inland waterway
container shipping business due to operational issues relating to water
levels and port congestion. Margins were also lower in Panopa after the
introduction of lower margin but value adding transport business.
Activity levels and profitability in this business are expected to be
maintained as the German economy remains strong. A shortage in transport
capacity has developed in Germany due to increased outsourcing and
international trade, and a shortage of drivers.
Leasing and capital equipment
R`million 2006 2005 change
Revenue 2 135 1 290 65,5%
Operating profit 415 239 73,6%
Operating margin (%) 19,4 18,5
Operating assets 5 709 4 413 29,4%
The MCC acquisition, effective from December 2005, made a significant
contribution to the results for the period. MCC capitalized on strong
demand for open cast mining services and was awarded contracts in the
Elands Platinum, Marikana and Lonmin Extension projects during the period.
Demand from the construction and road building industries was also strong.
The Southern African corporate vehicle and forklift leasing operations
maintained their fleet size at 30 000 units in a market in which
manufacturers and banks are becoming increasingly competitive. In response
to this trend, the division has successfully altered its business model
towards a higher value added content instead of earning the pure financial
margin. Whilst new vehicles were added to the fleet, both the governments
of Lesotho and Namibia have reduced their fleets.
The division`s results benefited from higher interest rates, as a
substantial portion of its funding is procured at competitive fixed rates,
or from its own capital, while lending rates are floating. The UK forklift
dealership performed well.
The Terex, New Holland and Excelrate expansions which were concluded at the
end of the period will fit in well with existing operations and are
expected to make a positive contribution soon.
Aviation
R`million 2006 2005 change
Revenue 2 045 1 721 18,8%
Operating profit 179 141 27,0%
Operating margin (%) 8,8 8,2 -1.6%
Operating assets 3 652 3 712 -2,0%
Operating profit includes the profit on the sale of aircraft of R68 million
against R10 million in the previous period. The weaker Rand slightly
enhanced normal trading profitability, while aircraft sales volumes were
good. Margins in NAC have improved following the resolution of maintenance
problems in the contracts division. Air Contractors in Europe continued to
perform well, and Naturelink has recovered to a position close to
breakeven.
Imperial Air Cargo was launched in August 2006 and succeeded in capturing a
meaningful share of the domestic air cargo market in a short period, and
passed the breakeven mark in profitability.
Trading for the second half is expected to remain good.
Car Rental & Tourism
R`million 2006 2005 change
Revenue 1 887 1 719 9,8%
Operating profit 265 249 6,4%
Operating margin (%) 14,0 14,5
Operating assets 2 892 2 492 16,1%
The car rental market remained very competitive with margins being squeezed
by cost pressures, particularly accident repair costs and lower claims
recoveries , while charge-out rates remained virtually unchanged. Car
rental revenues increased by 11% while volumes grew by 12% on slightly
lower growth in the fleet size. The used car market was under stiff
pressure from competitive new car prices resulting in reduced sales volumes
by Auto Pedigree.
We expect these conditions to improve, as rates have begun to harden, and
with new car prices beginning to rise, we expect the used car market to
benefit.
Tourvest, as well as our wholly owned tourism operations improved on the
back of a weaker Rand. International inbound passenger volumes to South
Africa increased by 8% year on year for the nine months to September, and
individual spending by tourists has increased. Tourvest`s retailing
operations, including airline duty free sales, performed well, and the
company benefited from the expansion of its range of tourist products.
Headline earnings per share at Tourvest increased by 14%.
Distributorships
R`million 2006 2005 change
Revenue 10 572 7 276 45,3%
Operating profit 615 647 -4,9%
Operating margin (%) 5,8 8,9
Operating assets 9 335 5 901 58,2%
After a period of exceptional growth by this division, margins have
recently come under pressure in the vehicle import business due to the
weaker Rand and strong competition. Some relief was obtained through
forward exchange cover. However the duty portion of total import cost, as
well as part of the vehicle cost cannot be covered. Only limited price
increases could be implemented.
Following the margin reduction during the first half of our financial year,
we expect that, should the Rand remain at current levels, price increases
would begin to compensate for the reduction. Recent trading levels of the
Rand would already relieve some margin pressure, and import duty reductions
of 2% (6% i.r.o. European imports) came into effect on 1 January 2007. The
vehicle parque in our imported vehicle brands is maturing and a growing
contribution can be expected from parts and service operations. Lastly, we
still see strong sales growth, although not at historical levels.
Losses are still being incurred in our Australian Ford dealerships where
Ford`s market share has declined significantly. We have closed two
unprofitable dealerships out of the nine we acquired.
The performance of our associate, Renault was disappointing.
Our commercial vehicle import, assembly, dealership and service operation,
Tyco, which operates the distributorships for International, DAF and
Renault trucks, VDL buses and JAC medium commercial vehicles, incurred a
loss due to operational problems. Production and inventory planning
regarding new vehicles, over-stocking of used vehicles and poor margins, as
well as service related issues were the main contributing factors. Decisive
corrective actions were taken and senior management changes were effected.
We expect the business to return to profitability during the second half of
the financial year. The outlook for this business remains positive in view
of a good product line and strong demand for commercial vehicles.
The newly acquired UK operations performed satisfactorily. The 18 DAF and
LDV outlets operating as Imperial Commercials contributed well to revenues
and profits, while the parts logistics business operating as Multipart has
made satisfactory progress in the restructuring process which was foreseen
at acquisition. A new state of the art distribution centre was opened in
the Manchester area, which will improve efficiencies.
The South African parts distribution business which was started as a
greenfields business with a bolt-on acquisition added later, is proving to
be successful.
Motor vehicle dealerships
R`million 2006 2005 change
Revenue 9 048 7 313 23,7%
Operating profit 243 190 27,9%
Operating margin (%) 2,7 2,6
Operating assets 3 845 2 968 29,5%
New and used vehicle sales growth comfortably exceeded market growth. Gross
profit margins were maintained in spite of increased competition but the
operating margin increased from 2,6% to 2,7% due to higher value added
sales of financial products, vehicle enhancements and accessories. Workshop
and parts sales performed well. Good results were achieved in our four
Nissan dealerships in Sweden.
Significant capital investment continued in line with capacity requirements
and branded retail standards.
While total market volumes remained strong, especially in commercial
vehicles, margins in the used vehicle market were under pressure.
Higher interest rates have begun to slow the growth rate in vehicle sales,
especially in the luxury car segment. However, this comes from an
exceptionally high base, and we expect positive growth to continue and be
buoyed by the small car segment. Demand remains driven by the entry of
first time buyers, a trend which we expect to continue as urban
demographics change and the economy attracts new entrants to the job
market. The division should also benefit from several new model launches
planned by manufacturers.
Commercial vehicle demand is supported by infrastructure spending, and we
have increased our exposure in this market.
Our aftermarket strategy which includes Beekmans Canopies has begun to
yield good results.
Insurance
R`million 2006 2005 change
Revenue 1 581 1 293 22,3%
Operating profit 375 301 24,6%
Operating margin (%) 23,7 23,3
Operating assets 3 542 2 985 18,7%
Premium income growth of 25,4% was in excess of motor industry growth as we
continue to gain market share. Whilst underwriting conditions in the motor
market have become more challenging due to high accident repair costs,
underwriting profits have increased. Investment income was excellent in a
strong equities market. Good progress is being made towards the
implementation of new requirements imposed by the National Credit Act, to
take effect on 1 June 2007. The act will cause single premium business to
be replaced with monthly premiums. This will reduce the amount of
investment funds, and as a result of a higher lapse experience on monthly
premiums than single premium policies, the overall impact on profitability
in the near term is unclear. However, we believe that premium rates should
compensate for investment income lost, leaving the prospects for long term
income growth intact.
Associates
Earnings from our primary associate, Imperial Bank increased by 17% to R104
million. Gross loans and advances amounted to R28,4 billion at December
2006, of which R17,4 billion was in motor vehicle finance.
Black Economic Empowerment
Imperial`s BEE strategy is still yielding very positive results. Since
entering into the transactions with Ukhamba and Lereko Mobility, an
aggregate amount of R1,6 billion of wealth has been created for previously
disadvantaged individuals and communities. The strategic intent with the
transactions is clearly demonstrated in the active cooperation between our
empowerment partners and some of our operating divisions. Ukhamba`s primary
investments are a 10,1% stake in Imperial and a 34% stake in Distribution
and Warehousing Network Limited, a JSE listed distributor and manufacturer
of building materials, which grew its headline earnings by 54% during the
period under review. Ukhamba has made several smaller strategic investments
in areas related to Imperial`s business. In addition, the group has entered
into several other empowerment initiatives at subsidiary level, resulting
in the practical and financial empowerment of a large number of black
people.
Investment in skills development
In response to a pressing shortage of technical and management skills in
virtually all spheres of our business, the board has approved the
establishment of a R100 million company focused skills development and
training fund.
Prospects
We expect further good growth in revenue and earnings for the full
financial year. Vehicle sales growth will be lower than the previous
financial year, but growth in the overall economy is expected to remain
robust. The expected recovery in some of our under-performing businesses
should further contribute to good results.
Retirement of Chief Executive
The group`s Chief Executive, Bill Lynch, has decided to relinquish his
position as Chief Executive with effect from 1 November 2007, or such later
date as a suitable successor is appointed. Bill has recovered from his
illness of last year and his decision was reached after careful
consideration of his age and 36 years of service with the group, in order
to enable him to scale down his demanding business schedule. He has however
agreed to continue serving on the board as a non-executive deputy Chairman
with effect from 1 November 2007, allowing a seamless transition to a new
Chief Executive.
The Remuneration and Nomination Committee of the board will now embark on a
process to select a suitable successor to Bill, which will include the
identification of suitable internal and external candidates. It is expected
that the selection process would be completed by August 2007 and an
announcement in this regard will be made as soon as an appointment has been
confirmed by the board. The current deputy Chief Executive, Hafiz Mahomed,
has requested not to be taken into consideration in the process of
identifying suitable candidates. He will however continue in his position
as deputy Chief Executive and Group Financial Director.
Leslie Boyd has agreed to remain as Chairman of the group beyond November
2007, thereby providing further continuity and keeping available his
considerable wealth of experience and knowledge of the group.
In addition to the appointment of a new Chief Executive, the company will
seek to identify a suitable black candidate for appointment to the board as
a non-executive deputy Chairman alongside Bill. In accordance with the
articles of association, the appointment of the two deputy Chairmen and the
re-appointment of Leslie Boyd as Chairman will also be tabled at the next
annual general meeting of shareholders for approval.
The company wishes to thank Bill for his enormous contribution to the
company and industry during his executive service with the group, a period
during which the group grew from a small motor retail business to a
powerful force in the mobility industry, both in South Africa and abroad.
We look forward to his contribution in his new capacity for years to come.
Remuneration and Nomination Committee
Phumzile Langeni, Roddy Sparks and Younaid Waja have been appointed as
members of the Remuneration and Nomination Committee with effect from 27
February 2007. The committee will then consist of Leslie Boyd (Chairman),
Phumzile Langeni, Mike Leeming, Roy McAlpine, Roddy Sparks, Oshy
Tugendhalft and Younaid Waja.
By order of the board
L Boyd, Chairman
W G Lynch, Chief Executive
A H Mahomed, Financial Director
Condensed income statement
for the half year ended 25 December
Audited
Unaudited Unaudited Year
ended
December December June
2006 2005 % 2006
Rm Rm change Rm
Revenue 33 388 25 825 29 54 105
Profit from operations 3 444 2 948 6 090
before depreciation and
recoupments
Depreciation and (945) (816) (1 632)
recoupments
Operating profit 2 499 2 132 17 4 458
Foreign exchange gains 50 34 (138)
(losses)
Fair value (losses) (13) (53) 26
gains on foreign
exchange derivatives
Fair value gains 10 (83) (74)
(losses) on financial
instruments (Lereko
Mobility)
Profit before net 2 546 2 030 25 4 272
financing costs
Net financing costs (498) (352) (782)
Income from associates 165 170 282
and joint ventures
Profit before 2 213 1 848 20 3 772
exceptional items
Exceptional items 27 (53)
Profit before taxation 2 240 1 848 21 3 719
Income tax expense 641 573 1 234
Profit after taxation 1 599 1 275 25 2 485
Attributable to:
Equity holders of 1 429 1 157 2 247
Imperial Holdings
Limited
Minority interest 170 118 238
Net attributable profit 1 599 1 275 25 2 485
for the period
Cents Cents Cents
Earnings per share*
- Basic 764,0 618,3 24 1 198,1
- Diluted 700,5 579,6 21 1 125,8
Additional information
Headline earnings per
share*
- Basic 749,0 616,9 21 1 222,1
- Diluted 686,9 578,2 19 1 148,3
Earnings per share
reconciliation
Headline basic earnings 749,0 616,9 1 222,1
per share
Impairment of property, (4,2)
plant and equipment
Profit on sale of 3,2 1,4 5,5
property, plant and
equipment
Exceptional items 11,8 (25,3)
Basic earnings per 764,0 618,3 1 198,1
share
*Based on the weighted
average number of
shares in issue for the
period
Net asset value per 5 825,5 4 432,4 5 330,3
share (cents)
Number of ordinary
shares (million)
- in issue 186,7 188,0 187,5
- weighted average 185,3 187,1 187,5
Other shares in issue
(million)
- Preferred ordinary 14,5
- Deferred ordinary 19,2 21,0 21,0
Financing Rm Rm Rm
Net interest 497 364 808
Foreign exchange (gain) (15) 284
loss on monetary items
Fair value losses 16 (12) (310)
(gains) on borrowings
and interest swaps
498 352 782
Exceptional items
Impairment of goodwill (1) (43)
Profit (loss) on 28 (10)
disposal of investments
in subsidiaries and
associates and joint
ventures
27 (53)
Condensed balance sheet
at 25 December
Audited
Unaudited Unaudited Year
ended
December December June
2006 2005 2006
Rm Rm Rm
ASSETS
Intangible assets 1 024 728 945
Investments in associates and 2 458 1 599 1 602
joint ventures
Property, plant and equipment 5 003 3 194 4 231
Transport fleet 2 649 2 655 2 570
Leasing assets 6 707 5 771 6 443
Vehicles for hire 1 213 1 162 896
Deferred tax assets 394 365 426
Other investments and loans 2 369 2 071 2 208
Other non-current financial 782 542 718
assets
Inventories 8 177 5 932 7 535
Taxation in advance 215 89 108
Trade and other receivables 8 591 7 116 8 248
Cash resources 1 686 1 248 1 630
Total assets 41 268 32 472 37 560
EQUITY AND LIABILITIES
Capital and reserves
Attributable to Imperial 11 721 8 333 10 002
Holdings` shareholders
Minority interest 820 617 785
Total shareholders` equity 12 541 8 950 10 787
Liabilities
Non-redeemable, non- 300
participating cumulative
preference shares
Equity-settled interest- 771 794
bearing borrowings
Retirement benefit 218 178 218
obligations
Interest-bearing borrowings 12 326 10 362 10 699
Liabilities under insurance 1 515 1 148 1 331
contracts
Deferred tax liabilities 1 014 873 941
Other non-current financial 31 136 127
liabilities
Trade and other payables and 12 301 9 011 11 545
provisions
Current tax liabilities 1 022 1 043 1 118
Total liabilities 28 727 23 522 26 773
Total equity and liabilities 41 268 32 472 37 560
Supplementary information Rm Rm Rm
Capital commitments 770 596 1 038
Contingent liabilities 786 495 810
Declaration of distributions
Preference shareholders and Ordinary shareholders
Notice is hereby given that:
* a preference dividend of 88,15 cents per preference share has been
declared payable to holders of non-redeemable, non-participating preference
shares; and
* a distribution of 280 cents per ordinary share has been declared payable
to ordinary shareholders as follows:
- a capital distribution out of share premium of 160 cents per ordinary
share payable in terms of the general authority granted at the annual
general meeting of shareholders held on 1 November 2006; and
- a dividend of 120 cents per ordinary share
payable to the respective shareholders recorded in the registers of the
company at the close of business on Friday, 30 March 2007.
The company has determined the following salient dates for the payment of
the preference dividend and capital distribution:
2007
Last day for preference shares and Friday, 23
ordinary shares to trade cum-preference March
dividend and cum capital distribution
respectively
Preference and ordinary shares commence Monday, 26
trading ex-preference dividend and ex March
capital distribution respectively
Record date Friday, 30
March
Payment date Monday, 2 April
Share certificates may not be dematerialised/rematerialised between Monday,
26 March 2007 and Friday, 30 March 2007, both days inclusive.
On Monday, 2 April 2007, amounts due in respect of the preference dividend
and the capital distribution will be electronically transferred to the bank
accounts of certificated shareholders that utilise this facility. In
respect of those who do not, cheques dated 2 April 2007 will be posted on
or about that date. Shareholders who have dematerialised their shares will
have their accounts, held at their CSDP or Broker, credited on Monday, 2
April 2007.
In terms of the Exchange Control Regulations of the Republic of South
Africa, cash payments based on emigrant`s shares controlled in terms of the
Exchange Control Regulations will be forwarded to an Authorised Dealer in
foreign exchange controlling their blocked assets. The elections by
emigrants for the above purpose must be made through the Authorised Dealer
in foreign exchange controlling their blocked assets. Payments due to non-
residents are freely transferable from the Republic.
Preferred ordinary shareholders (Unlisted)
Notice is hereby further given that a dividend of 267,5 cents per preferred
ordinary share has been declared and is payable to preferred ordinary
shareholders recorded in the registers of the company at the close of
business on Thursday, 29 March 2007.
On Friday, 30 March 2007 the dividend will be electronically transferred to
the bank accounts of preferred ordinary shareholders.
On behalf of the board
RA Venter, Group Company Secretary
27 February 2007
Condensed cash flow statement
for the half year ended 25 December
Audited
Unaudited Unaudited Year
ended
December December June
2006 2005 % 2006
Rm Rm change Rm
Cash flows from
operating activities
Cash generated by 3 442 2 999 5 889
operations before
changes in working
capital
Net working capital (230) (1 140) (255)
movements
Cash generated by 3 212 1 859 73 5 634
operations
Net financing costs (498) (364) (782)
Taxation paid (727) (20) (597)
Net cash flows from 1 987 1 475 35 4 255
operating activities
Cash flows from
investing activities
Net acquisition of (108) (120) (755)
subsidiaries and
businesses
Expansion capital (1 724) (1 328) (2 662)
expenditure
Net replacement capital (645) (782) (1 104)
expenditure
Investments, equities ( 397) (460) (321)
and loans
Net cash flows from (2 874) (2 690) (4 842)
investing activities
Cash flows from
financing activities
Cash flow from 864 (12) 3 809
financing activities
Purchase of treasury (298) (1 539)
stock
Issue of preference 298
shares
Dividends paid (80) (55) (138)
Capital distribution (462) (413) (846)
Net cash flows from 322 (480) 1 286
financing activities
Net (decrease) increase (565) (1 695) 699
in cash and cash
equivalents
Cash and cash (1 643) (2 342) (2 342)
equivalents at
beginning of period
Cash and cash (2 208) (4 037) (1 643)
equivalents at end of
period
Condensed statement of changes in equity
for the half year ended 25 December
Share
Share repurchases/
capital consolidated Other Retained
and
premium shares reserves earings
Rm Rm Rm Rm
Balance at 25 1 762 (2 497) 1 272 9 465
June
Net gains 33
(losses) arising
on translation of
foreign
operations not
recognised in the
income statement
Net profit 1 429
attributable to
equity holders of
Imperial Holdings
Limited
Minority share of
attributable
profits
Net acquisition
of minority
interest
Contingency 28 (28)
reserve created
in terms of the
Insurance Act
Movement in hedge (479)
accounting
reserve
Reallocation of 5 (5)
Imperial Banks`
credit risk
reserve to
statutory reserve
Net movement in (63)
share based
payment reserves
Issue of ordinary
shares
Issue of
preferred
ordinary shares
Repurchase of (298)
ordinary shares
Deconsolidation 715 361 483
of Lereko
Mobility
Capital (550) 88
distributions
Minority share of
dividends
Balance at 25 1 212 (1 992) 1 157 11 344
December
Total Audited
Unaudited Unaudited Year
ended
Minority December December June
interest 2006 2005 2006
Rm Rm Rm Rm
Balance at 25 June 785 10 787 8 355 8 355
Net gains (losses) 1 34 (143) 279
arising on
translation of
foreign operations
not recognised in
the income
statement
Net profit 1 429 1 157 2 247
attributable to
equity holders of
Imperial Holdings
Limited
Minority share of 170 170 118 238
attributable
profits
Net acquisition of 1 1 92 128
minority interest
Contingency reserve
created in terms of
the Insurance Act
Movement in hedge (57) (536) (181) 609
accounting reserve
Reallocation of
Imperial Banks`
credit risk reserve
to statutory
reserve
Net movement in (63) (27)
share based payment
reserves
Issue of ordinary 20 39
shares
Issue of preferred 4
ordinary shares
Repurchase of (298) (101)
ordinary shares
Deconsolidation of 1 559
Lereko Mobility
Capital (462) (413) (846)
distributions
Minority share of (80) (80) (55) (138)
dividends
Balance at 25 820 12 541 8 950 10 787
December
Basis of preparation
This condensed interim financial information for the half year ended 25
December 2006 has been prepared in accordance with International Accounting
Standards applicable to interim financial reporting: IAS 34 - Interim
Financial Reporting. This condensed interim financial information should be
read in conjunction with the annual financial statements for the year ended
25 June 2006.
Our Black Economic Empowerment associate, Lereko Mobility (Proprietary)
Limited, was previously consolidated (even though we held 49%) because
there was significant risk relating to the recovery of the notional capital
provided by the group. The directors are now of the opinion that as the
Imperial share price has risen substantially this risk is now remote and
Lereko is equity accounted with effect from 26 October 2006.
Accounting policies
The accounting policies adopted in preparation of this condensed interim
financial information are consistent with those of the annual financial
statements for the year ended 25 June 2006.
Revenue restatement
In line with the restatement in our June 2006 annual report, SAICA Circular
9/2006 - Discounts, rebates and extended payment terms, has revised the
basis for determining revenue in our Car Rental and Tourism division:
Rm
Revised revenue 1 719
As previously stated 1 687
32
Revenue in the distributorship division was over stated in the prior period
due to revenue between operations within the division being included in
revenue that should have been eliminated.
Revised revenue 7 276
As previously stated 7 655
(379)
Net reduction in revenue 347
The above restatements only affect the revenue and cost of sales lines and
had no effect on profits.
To view the segmental table please go to www.imperial.co.za
Non-executive directors:
L Boyd (Chairman), PL Erasmus, P Langeni, MJ Leeming, JR McAlpine, VJ
Mokoena, PS Molefe, MV Moosa, CE Scott, M Sisulu, RJA Sparks, A Tugendhaft,
Y Waja
Executive directors:
WG Lynch (Irish), RJ Boettger, HR Brody, MP de Canha, RL Hiemstra, WS Hill,
AH Mahomed, GW Riemann (German)
Company secretary:
RA Venter
Business address and registered office:
Imperial Place, Jeppe Quondam, 79 Boeing Road East, Bedfordview, 2007
Share transfer secretaries:
Computershare Investor Services 2004 (Proprietary) Limited, 70 Marshall
Street, Johannesburg, 2001
Sponsor:
Merrill Lynch SA (Pty) Limited, 138 West Street, Sandown Sandton, 2196
Date: 28/02/2007 07:00:04 Produced by the JSE SENS Department. |