Aug 22, 2012
Imperial logistics business grows despite difficult trading conditionsBack
Construction|SECURITY|Africa|CIC Holdings|Components|Imperial Holdings|Imperial Logistics|Imperial-Logistics|Industrial|Industrial Equipment|Lehnkering|Ports|Rental|Security|System|Africa|Namibia|South Africa|Security|Equipment|Food Sectors|Industrial Equipment|Industrial Services|Logistics|Manufacturing|Manufacturing Clients|Manufacturing Volumes|Retail|Security|Service|Services|Steel|Transport|Rhine|Hubert Brody|Infrastructure|Jacob Zuma|Security
© Reuse this
The diversified industrial services and retail group’s Southern African logistics business won more contracts from existing and new clients during the year ending June, despite a challenging trading environment.
“Some of the subdivisions, like the tankers business and the general transport and warehousing business actually performed very well. But this is owing to good contract gains, while the markets were difficult,” Brody noted.
The Southern Africa logistics business recorded a 19% growth in revenue to R16.46-billion and 16% growth in operating profit to R910-million for the year ended June.
However, operating margins for the period declined by 0.2% to 5.5%, owing to the acquisition of consumer goods service provider CIC Holdings at the beginning of 2011.
Acquisitions during the reporting period included German logistics firm Lehnkering, 74.9% of dry-bulk shipping business Dettmer Bulk Reederei operating on the Rhine river; 70% of Datadot, a business that uses microdots as a security identification system to protect, among others, motor vehicles and motorcycles; as well as 75% of vehicle accessories and outdoor equipment business Safari Centre.
Brody indicated that manufacturing volumes had been flat in South Africa, making clients more price-sensitive. He added that some of the company’s manufacturing clients had been affected by industrial action at the beginning of the year, especially in the steel, fuel, paper and food sectors.
Meanwhile, Imperial’s construction clients had also been impacted by the slow start of the South African government’s infrastructure development plans, announced by President Jacob Zuma in his State of the Nation Address in February.
Looking north of South Africa’s borders, Brody said the company found that its transport volumes were under some pressure, particularly in Namibia.
“Some of the other transport corridors to other ports in Africa are becoming more reliable…there, is maybe, less reliance on South Africa, which has impacted on certain of the transport routes,” he explained.
However, Brody insisted that notwithstanding increased competition in the Southern Africa space, the company achieved good numbers.
Imperial achieved a 25% growth in revenue at R80.8-billion and operating profit increased by 25% to R5.6-billion with the group achieving a return on equity of 23% and core earnings a share rising 32%.
Logistics revenue grew by 34% and operating profit increased by 33%, while the combined distributorship, retail and financial services revenue and operating profit was up 22% and 23% respectively.
Imperial attributed the growth to strong growth in the South African motor vehicle market, strengthening of the market positions of the group’s imported brands and lower interest rates.
The group sold 114 754 new vehicles in the financial year, 19% higher than the prior period, outperforming the South Africa new vehicle market, which grew by about 13% during the reporting period.
In the short term, Imperial expected trading conditions in the Southern African logistics division to remain challenging. “But many of our good contract gains will start kicking in even more now and make a good contribution,” Brody noted.
The growth rate of new vehicle sales in South Africa was also anticipated to slow, as the base was currently substantially higher. However, the recent reduction in interest rates was expected to support demand.
“Under current conditions, we expect growth in 2013, albeit at a slower rate than what it was in the past year,” Brody said.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Other Video News
Recent Research Reports
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
This Week's Magazine
While Ekurhuleni-based transformer manufacturer Reliable Transformers currently designs, manufactures and tests its products according to the SANS 780 specifications for distribution transformers and other applicable transformer specifications, it is working towards...
Global endpoint security solutions company Kaspersky Lab has introduced new measures to prevent cyber criminals from accessing sensitive data, alongside its malware-signature and heuristic device analysis detection methods. Threats to mobile devices have increased...
To ensure uptake and a positive impact, Wireless Fidelity (Wi-Fi) networks in cities must be provided at schools, community centres and commercial centres to enable citizens and government to access information that will improve access to and delivery of services....
Eco-estate Monaghan Farm, located near Lanseria airport, north-west of Johannesburg, has taken a new approach to modern living and sustainability with its 517 ha development, dedicated to farm living.
Forklift and lift-truck distributor Goscor Lift Hi-Reach launched the Genie SX-180, the tallest self-propelled super boom in Africa, in Johannesburg last month. “As the official distributor of the well-known Genie range of equipment in Southern Africa, we are pleased...