Imperial logistics group has been impacted by Covid-related costs but says it is well positioned to capture new opportunities that arise.
Imperial Logistics says it made good progress with its strategy to focus on its growing African footprint last year despite challenging trading conditions that were exacerbated by the Covid-19 pandemic. While headline earnings for the year to end-June are significantly lower, the global logistics group grew revenue from continuing operations, generated strong free cash flow and maintained a strong balance sheet.
The company’s strategy is aimed at aligning its international portfolio to position it as the “Gateway to Africa” in the medium to long term. This will result in it having an integrated logistics and market access offering, focused on Africa and leveraging its capabilities mainly in the healthcare, consumer, chemicals, industrial and automotive industries.
Over the period, it concluded the sale of its European shipping businesses, using the net proceeds of R3.44 billion from the disposal to reduce debt. It spent R900 million on strategic acquisitions which it said contributed positively to its performance for the year.
Due to the impact of Covid-19 and the costs it incurred to reduce fixed overheads and further rationalise its portfolio, earnings for the year came in lower. Many of its businesses across the 32 countries where it operates were severely impacted by restrictive measures imposed at the beginning of March. While those essential to the sourcing, warehousing, transportation and distribution of medical supplies, food, basic goods and other essential products and services remained in operation throughout the lockdown, only segments of these businesses generated revenue, while it continued to incur overhead costs.
For the year, revenue from continuing operations rose 5% to R46.4 billion but earnings before interest, tax, depreciation and amortisation declined 11% to R4.1 billion. Continuing headline earnings per share (HEPS) came in 65% over at 156c per share. It hasn’t declared a final dividend leaving its total dividend for the year at 167c per share.
Imperial said its contract renewal rate remained strong at about 80% and it secured new business revenue of around R6.2 billion a year. Its liquidity remained high, with R13.2 billion of available banking facilities and cash following the receipt of the European shipping proceeds.
It expects to grow revenue, operating profit and HEPS in the year ahead subject to stable currencies, a steady improvement in volumes and revenue on the back of easing Covid-19 restrictions, and a recovery in the economies in which it operates.
The pandemic has provided lessons for us that will fundamentally change the way we live and work in the future,” CEO Mohammed Akoojee said. “Being an essential services’ provider with a unique value proposition, Imperial is well positioned to capture the many opportunities that will arise from changing market trends.”
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