Imperial Holdings' plans for unbundling its Imperial Logistics and Motus entities, and listing them separately, are still in the works but are dependent on a number of internal and external factors, CEO Mark Lamberti said on Tuesday.
The company last year said work was in progress to determine the viability and benefits to Imperial shareholders of the unbundling of these entities.
Imperial Logistics has assets mainly in South Africa, the rest of Africa and Europe. Motus encompasses Imperial's vehicle import and distribution; vehicle retail and rental; aftermarket parts; and motor-related financial services operations.
"Internally, the thing that is of absolute importance is that both of these businesses are properly geared, because when we unbundle, Imperial Logistics will effectively be a separately listed company and, at that stage, both of these business will have to have a balance sheet that enables them to grow," Lamberti told journalists at a roundtable in Johannesburg.
He noted that external factors, such as political developments, still played a role.
"In the last while, it's been positive, but it could have gone the other way. We still believe that a downgrade, or some major correction to markets, is something that we should be cautious about and, therefore, we'll be alive to that," said Lamberti.
He added that the perfect time for the unbundling would be "after the delivery of the [group's] full-year results".
The company on Tuesday reported a 5% increase it in its operating profit to R3.09-billion for the six months ended December 31, supported by a 16% increase in headline earnings a share to 717c and a 9% increase in earnings a share to 671c.
This was split between Imperial Logistics reporting R1.39-billion in operating profit, up 7% and Motus adding R1.71-billion to the balance sheet, up 5%.
Imperial Holdings highlighted that it would release capital and further sharpen its executive focus by further disposing of noncore, strategically misaligned, underperforming or low return on effort assets. This includes properties valued at R606-million and interests in smaller entities amounting to around R55-million.
It further planned to invest around R1.3-billion this year to maintain the quality of its assets, particularly in vehicles for hire.
Meanwhile, the company's focus would increasingly fall outside South Africa's borders, with Lamberti explaining that, as the company was the largest and most dominant player here, it would only seek organic growth locally.
He added that the company's ability to carry out local acquisitions would be limited by the Competition Commission, while original-equipment manufacturers would limit the company's acquisitions in the motoring business.
Currently, around 46% of the group's revenue is derived from international grounds, up 20% to R30.7-billion, matched by a 4% increase in foreign operating profit, to R1.1-billion. This encompasses 35% of group profit.
Lamberti explained that while Imperial did not have a set target for expanding its international growth, its eyes were set on Australia, which still held significant potential and Europe, which was currently a "growth story".
Lamberti further noted that, if newly elected President Cyril Ramaphosa delivered on the promises he made in the State of the Nation Address last week, the country would also see a level of regulatory certainty that it has not experienced before, which eases investment decisions.
"You will see an uptick in business and consumer confidence," he said, adding that discretionary spend would definitely increase, boding well for the motor vehicle industry.
"This is like 1994 again," he quipped.