Unaudited interim results for the six months ended 31 December 2020 and interim cash dividend declaration
IMPERIAL LOGISTICS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1946/021048/06
Share code: IPL
(‘Imperial’ or ‘company’ or ‘group’)
Unaudited interim results for the six months ended 31 December 2020
and interim cash dividend declaration
– Revenue* up 15% to R26 360 million
(H1 F2020: R22 955 million)
– EBITDA* down 2% to R2 551 million
(H1 F2020: R2 594 million)
– Operating profit* down 18% to R1 201 million
(H1 F2020: R1 463 million)
– Total HEPS down 3% to 185 cents per share
– Total EPS up 96% to 437 cents per share
– Continuing core EPS** down 39% to 235 cents per share
– Strong free cash inflow from continuing operations excluding CPG of R671m
(H1 F2020: R54 million outflow)
– Continuing free cash conversion of 90%
(H1 F2020: 76%)
– Net debt:EBITDA of 1,8x
(H1 F2020: 2,0) – well within banking covenants of 3,25x
– Interim cash dividend of 83 cps declared
(H1 F2020: 167 cents)
– Concluded disposal of the European shipping business for proceeds of R3 440 million
* Excludes the discontinued European shipping business in the current and prior period, and CPG in the prior period.
** Headline earnings are adjusted by items that are not considered to be of a trading nature to arrive at core EPS.
Core EPS is not an IFRS requirement and a reconciliation with EPS and HEPS is included in the full financial results
booklet available on the company’s website.
Imperial is an African focused provider of integrated market access and logistics solutions, with a focus on the
following key industries – healthcare, consumer, automotive, chemicals, industrial and commodities. We take our clients
and principals’ products to some of the fastest growing and most challenging markets in the world. Ranked among the top
30 global logistics providers and listed on the JSE in South Africa, we seek out and leverage new technology to deliver
innovative, end-to-end solutions. Through our significant African footprint and international expertise, and with the support
of our 25 000 people, Imperial’s purpose is connecting Africa and the world – and improving people’s lives with access
to quality products and services.
1. In extraordinary and challenging trading conditions, exacerbated by the COVID-19 pandemic, Imperial increased
revenue from continuing operations, generated strong free cash flow, maintained a strong balance sheet, stringently
managed costs and recorded significant progress against our strategy.
2. Excluding businesses held for sale, revenue grew by 16% from R22 471 million to R26 005 million, supported by new
business gains and acquisitions, despite the decline in trading volumes resulting from the impact of COVID-19 on
3. Continuing EBITDA, excluding businesses held for sale, decreased marginally by 1% from R2 581 million to
R2 562 million.
4. Continuing operating profit, excluding businesses held for sale, declined 16% from R1 481 million to R1 249 million.
This was largely due to the impact of COVID-19 lockdown restrictions; subsequent impact on trading volumes in certain
sectors across the business; associated once-off costs; and investment in people, structure, processes and systems to
support strategic growth and future efficiency in line with our ‘One Imperial’ and ‘Gateway to Africa’ strategy.
5. Continuing HEPS declined by 43% to 180 cents per share versus a decline of 39% in core EPS of 235 cents per share.
Core EPS is a measurement of pure trading performance and is calculated as headline earnings less amortisation of
intangible assets arising from business combinations, acquisition cost, and the re-measurement of put option and contingent
consideration liabilities. We have re-introduced core EPS as management believes it is a more accurate reflection of
Imperial’s trading performance. A full reconciliation of headline earnings to core earnings is included in the full results
announcement, available on the company’s website.
6. A strong recovery in volumes and profitability was recorded in the first half of 2021 compared to H2 F2020.
7. Continuing operating margin declined from 6,4% in the comparable period to 4,6% in H1 F2021. This is mainly due to
the negative impact of COVID-19 on volumes, margin pressure in the Healthcare business in Nigeria and in the healthcare
medical supplies and kitting business (Imres), and the impact of a competitive market on contract renewals and rates.
8. Annualised costs of c.R200 million were removed from Logistics Africa, the full benefit of which will be realised
from F2022, and will assist in maintaining our competitive market positioning.
9. Imperial’s contract renewal rate across its operations on existing contracts is strong at c.80%, with a strong
pipeline of new opportunities.
10. New business revenue of approximately R6,2 billion per annum was secured on a rolling 12-month basis to the end of
December 2020. A material Procter and Gamble (P&G) contract awarded to Imperial’s joint venture with the Chanrai
Summit Group for P&G’s end-to-end distribution and logistics of consumer goods in Nigeria became effective on
1 January 2021.
11. Strategic acquisitions of R120 million were concluded during the period.
12. The disposal of the loss-making business, Pharmed, was successfully concluded during the period.
13. Net working capital of R1 006 million improved by 53% compared to R2 123 million at December 2019 and is in line
with guidance of 4% to 5% of revenue.
14. Net capital expenditure (capex) of R269 million from continuing operations decreased from R623 million and was
significantly lower than depreciation (excluding right-of-use assets). The results from implementing more effective
and efficient fleet management technology and disciplines across Logistics Africa contributed to this decline.
15. Net debt (excluding lease obligations) of R5,5 billion decreased by 25% compared to December 2019 due to effective
working capital and capex management, strong cash flow generation and the receipt of proceeds from the disposal of the
European shipping business.
16. Free cash flow (post maintenance capex, repayment of lease obligations and excluding discontinued operations and
CPG) increased to an inflow of R671 million from a free cash outflow of R54 million for the six months ended
31 December 2019.
17. Our cash and liquidity position remains strong with R13,7 billion of available facilities and cash, of which
c.R11,9 billion is committed banking facilities.
18. ROIC of 4,1% (H1 F2020: 8,2%) versus WACC of 7,5% (H1 F2020: 8,0%). The depressed ROIC was due to lower returns in
H2 F2020 over a rolling 12-month basis, impacted by COVID-19.
19. Discontinued operations: the European shipping business was sold on 31 July 2020 and is classified as a
discontinued operation in these results. The South American shipping operation remains part of continuing operations
and is classified as ‘held for sale’.
20. Imperial has been re-organised based on the solutions we offer to our clients (our capabilities) and less so on
regions. As from 1 July 2020, Imperial has operated within two overarching solutions – market access and logistics,
and is categorised into three businesses: Market Access, Logistics Africa and Logistics International. The logistics
businesses encompass contract logistics and freight (road, air and ocean, and lead logistics provider (LLP)). Therefore,
primary segmentation for the period and the narrative thereof in the interim results report is compiled accordingly,
and in line with IFRS reporting.
Market Access – in which close to 100% of revenue is generated in Africa – is integral to our ‘Gateway to Africa’ and
‘One Imperial’ strategy. Our market access solutions see us taking ownership of inventory and responsibility for the
full order-to-cash function. We build complex route-to-market solutions that provide our principals with access to patients
and consumers through comprehensive channel strategies that integrate sourcing, sales, distribution and marketing. Our
solutions also create opportunities to leverage our freight and contract logistics capabilities. Through our operations
in mainly East, West and Southern Africa, we are able to provide market access and logistics services in more than
20 countries on the African continent. Our activities currently focus on two key, defensive industries – healthcare and
– Revenue up 35% to R7,4 billion
– Operating profit down 17% to R422 million
– Operating margin 5,7% (H1 F2020: 9,2%)
– 28% group revenue
– 34% group operating profit
– ROIC of 11,3% versus WACC of 11,9%
Logistics Africa encompasses logistics activities throughout the African continent ie road freight, contract logistics
and LLP in Africa. Logistics will continue to play an integral role in achieving our ‘Gateway to Africa’ and ‘One
Imperial’ strategy – leveraging and expanding freight, contract logistics and supply chain support, and leveraging
cross-selling and upselling opportunities with our market access business.
– Revenue down 2% to R8,1 billion
– Operating profit down 25% to R473 million
– Operating margin 5,9% (H1 F2020: 7,6%)
– 31% group revenue
– 38% group operating profit
– ROIC of 6,4% versus WACC of 7,9%
Logistics International encompasses road freight, air and ocean, contract logistics and LLP activities outside of
Africa – most notably our contract logistics and freight businesses in Europe and the United Kingdom.
– Revenue up 1% to €554 million
– Operating profit down 18% to €18 million
– Operating margin 3,2% (H1 F2020: 4,0%)
– 41% group revenue
– 28% group operating profit
– ROIC of 0,2% versus WACC of 5,7%
Over the past 18 months, we have laid the foundation of our new strategy and are making significant strides in
transforming Imperial from a portfolio of regional businesses to an integrated, end-to-end market access and logistics
business. It is our strategic intent to become a ‘One Imperial’ business and serve as the ‘Gateway to Africa’ to our clients,
principals and customers – transforming from an asset-heavy, 3PL logistics player to an innovative, asset-right business.
The strategic decisions and actions we continue to take are aligned with this ambition.
In H1 F2021 significant progress was recorded against our strategy, which includes:
– We concluded strategic acquisitions in Market Access and Logistics Africa of c.R120 million.
– We concluded the sale of the European shipping business for proceeds of R3 440 million which was received on 31 July 2020.
– We concluded the sale of Pharmed in South Africa in November 2020, an underperforming and low return on effort business
– We are progressing the sale of the South American shipping business.
– We invested c.R100 million on appropriate and effective systems, processes, resources and structures and will continue to
invest significantly over the next three to five years to ensure successful execution of all our key strategic imperatives.
This will position the business for sustainable growth, and improve efficiencies and costs over the medium term
– Significant progress was recorded in strategic digital and IT initiatives, including Digital Fleet Management, enabling
our Road Freight business, and progress with partnerships to enable digital distributorships in our Market Access business.
– USD20 million innovation fund continues to record significant activity with five actively managed portfolio companies.
– We are implementing an appropriate organisational structure and systems to operate as ‘One Imperial’.
– Our ESG and women empowerment initiatives continue to make a difference.
Achieving our strategic ambitions will require us to make significant capital investments in digital and data
initiatives, technology, and strategic acquisitions over the next five years. Capital allocation will be prioritised for
those areas that most amplify our primary strategic positioning and focus – being Africa, and focusing on five key industries
– healthcare, consumer, chemicals, automotive, and industrial and commodities. Over the past 10 years, Imperial’s
investment in Africa, outside South Africa, was focused primarily on building its market access capability in the defensive
and fast-growing healthcare and consumer industries. During this time, Imperial has developed strong expertise, networks,
and knowledge of operating successfully in some of the fastest growing and most challenging markets in Africa. Serving as
an integrated logistics and market access provider will require us to invest in logistics businesses outside South
Africa too, particularly those that will give us access to freight capabilities, including in other key growth industries,
to facilitate trade flows into, out of and across key African trade lanes. We are therefore actively exploring potential
growth opportunities in both Market Access and Logistics Africa on the continent (outside South Africa).
In addition, we have thoroughly assessed the strategic fit of our international portfolio. We have concluded that
Logistics International is non-core to our ‘Gateway to Africa’ strategy and we have therefore decided to explore an
appropriate exit plan for this business. The exit plan will relate to the remaining assets in the International portfolio
being contract logistics and freight, including Palletways. Given the current macro-economic uncertainty, this may take time
to progress as the objective is to maximise value for shareholders through this process.
The group’s liquidity position remains strong with R13,7 billion of unutilised banking facilities. A total of 71% of
the group debt (including lease obligations) is long-term in nature and 65% of the debt (including lease obligations)
is at fixed rates.
After considering the strong cash flow generation and the balance sheet of the business, and the steady recovery in
operations since H2 F2020, an interim cash dividend of 83 cents per ordinary share was declared by the board and will
be paid to shareholders in March 2021 (H1 F2020: 167 cps). The dividend payout ratio will be assessed at each reporting
period, subject to prevailing circumstances.
Declaration of interim ordinary dividend
For the six months ended 31 December 2020 notice is hereby given that a gross interim ordinary dividend in the
amount of 83,00 cents per ordinary share has been declared by the board of Imperial, payable to the holders of the
202 074 388 ordinary shares. The dividend will be paid out of income reserves.
The ordinary dividend will be subject to a local dividend tax rate of 20%. The net ordinary dividend, to those
shareholders who are not exempt from paying dividend tax, is therefore 66,40000 cents per share.
The company has determined the following salient dates for the payment of the ordinary dividend:
Declaration date Tuesday, 23 February
Last day for ordinary shares to trade cum ordinary dividend Tuesday, 16 March
Ordinary shares commence trading ex-ordinary dividend Wednesday, 17 March
Record date Friday, 19 March
Payment date Tuesday, 23 March
The company’s income tax number is 9825178719.
Share certificates may not be dematerialised or rematerialised between Wednesday, 17 March 2021 and
Friday, 19 March 2021, both days inclusive.
Directorate and executive management changes
Ms Harriet-Ann (Bola) Adesola and Ms Juliet Anammah, both of Nigeria, were appointed as independent non-executive
directors of Imperial with effect from 22 February 2021. Ms Adesola is a qualified attorney and a director on the boards
of the Lagos State Employment Trust Fund Board of Trustees (Chairman), FinTech Association of Nigeria (Trustee), Capital
Club West Africa (Director), Standard Chartered Bank, Mauritius (Chairman), Standard Chartered Bank, Ghana (Director),
United Nations Global Compact Board (Co-Vice Chairman), Healthcare Federation of Nigeria (Trustee), and Aloseda Ltd,
Ms Anammah is a qualified pharmacist and a director on the boards of Jumia Nigeria (Chairman), Flour Mills of Nigeria
(Non-Executive Director), APT Pensions (Non-Executive Director), FBN Holdings (Independent Non-Executive Director),
Consultative Group to Assist the Poor (Member of Executive Committee) and Energy Entrepreneurs Growth Fund (Member
of Investment Committee).
As we are progressing our ‘Gateway to Africa’ strategy, both appointments are critical to diversifying the skills on
our Board and are in line with our Board succession planning. The Board welcomes Ms Adesola and Ms Annamah, and looks
forward to the experience and knowledge they will contribute and the value they will add.
Ms Bridget Radebe was appointed to succeed Mr Graham Dempster as Chairman of the audit committee from
1 September 2020. Mr Graham Dempster remains a member of the audit committee.
Mr Rohan Venter resigned as Company Secretary with effect from 9 November 2020. Mr Jeetesh Ravjee, Group Legal
Executive, was appointed as acting Company Secretary on the same date until a permanent appointment is made.
Many of our markets continue to face increasing uncertainty and volatility, being in various levels of lockdown and
restrictions. However, as some of these restrictions are easing and COVID-19 vaccines are in the process of being
rolled out, volumes and operating activities are improving – but the business is not yet at pre-COVID-19 levels.
It remains to be seen how the second wave of COVID-19 will fully impact the business. Forecasts indicate that most
economies in the key African markets in which we operate contracted in 2020, with low to modest growth expected in 2021.
We therefore expect volatile trading conditions across the markets in which we operate until some level of normalisation
is reached around the COVID-19 pandemic.
At this stage, for the 12 months to 30 June 2021, subject to stable currencies, steady recovery in volumes and revenue
on the back of easing COVID-19 restrictions, as well as a recovery from current levels in markets in which we operate,
we expect Imperial’s continuing operations to deliver:
– Double-digit revenue growth compared to F2020.
– Double-digit operating profit growth compared to F2020.
– Double-digit growth in continuing HEPS compared to F2020.
– Double-digit growth in core EPS compared to F2020.
– Strong free cash flow generation – free cash conversion expected to be between 70% and 75%.
Imperial’s balance sheet remains strong and resilient, with headroom in terms of debt capacity and liquidity to
facilitate our strategic growth aspirations. We have a strong pipeline of new business opportunities which we are working
hard to translate into new contracts. While we will continue to meet the demands and manage the implications of the
pandemic in the short term, we will also ensure that we continue to deliver our strategic objectives.
We thank our shareholders and funders for their ongoing support.
Certain information presented in this results announcement constitutes alternate financial measures which are
presented for illustrative purposes only. The responsibility for preparing and presenting the alternate financial measures
and for the completeness and accuracy thereof is that of the directors of Imperial. Because of its nature, the alternate
financial measures may not fairly present Imperial’s financial position, changes in equity, and results of operations or
cash flows. The alternate financial measures and any forecast financial in-formation contained in this results announcement
is based on information available at the time of publication and has not been audited or reviewed or otherwise reported
on by the external auditors of Imperial.
23 February 2021
The content of this announcement is the responsibility of the directors of Imperial Logistics. It is only a summary
of the information contained in the full SENS announcement. This announcement is itself not audited but extracted
from audited results. Any investment decisions by investors should be based on the consideration of the full announcement
as published on SENS on Tuesday, 23 February 2021. The full announcement is available for viewing at
https://senspdf.jse.co.za/documents/2021/JSE/ISSE/IPLE/IPLH1F2021.pdf and on Imperial Logistics’ website at
www.imperiallogistics.com/interim-results.php. The full announcement is also available for inspection at the registered
office of Imperial, at no charge, weekdays during office hours 09:00 to 16:00. Copies of the full announcement may also
be requested from the Acting Company Secretary at firstname.lastname@example.org.
Business address and registered office: Jeppe Quondam, 79 Boeing Road East, Bedfordview, 2007
Directors: P Langeni# (Chairman), M Akoojee (Group Chief Executive Officer), H Adesola##, J Anammah##,
GW Dempster## (Lead Independent Director), P Cooper##, RJA Sparks##, B Radebe##, D Reich##*,
JG de Beer (Group Chief Financial Officer)
# Non-executive ## Independent non-executive *Swiss
Acting Group Company Secretary: J Ravjee
Executive Vice President: Corporate Affairs and Investor Relations: E Mansingh
Share transfer secretaries: Computershare Investor Services Proprietary Limited, 1st Floor, Rosebank Towers
15 Biermann Avenue, Rosebank, 2196. Private Bag X9000, Saxonwold, 2132
Sponsor: Rand Merchant Bank (a division of FirstRand Bank Limited), No 1 Merchant Place, Cnr Fredman Drive and
Rivonia Road, Sandton 2196
Date: 23-02-2021 07:05:00
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