For the half-year ending December 31, 2019, Imperial Logistics saw continuing revenue grow by 1% year-on-year to ZAR*25.4bn. Continuing operating profit also grew to ZAR1.6bn, a rise of 9.1% compared to H1-19. Continuing operating margin improved from 5.9% in the prior period to 6.4% and EBITDA totalled ZAR2.9bn. New contract gains and the benefits of the rationalisation and cost-cutting in South Africa and International in 2019, were attributed to the positive results. Imperial faced increasingly challenging trading conditions in most of its markets, which negatively impacted volumes across most businesses.
Outside of South Africa, continuing revenue generated was ZAR17.8bn and accounted for 70% of group revenue compared to ZAR18.7bn in the prior period (H1-19: 74% of group revenue). Continuing operating profit generated outside South Africa was ZAR1.1bn and accounted for 64% of group operating profit, up 10% compared to R1.0bn generated in the prior period (H1-19: 64% of group operating profit).
In South Africa, ZAR7.6bn or 30% of group revenue and R579m or 36% of group operating profit was generated by this division in the six months to December 31, 2019. Weak economic conditions, high unemployment and lower consumer spending negatively impacted volumes, it is likely this trend is set to continue for the foreseeable.
The Rest of Africa saw continued revenue reach ZAR64bn or 25% of group revenue and ZAR511m or 31% of group operating profit was generated for the six months ending December 31m 2019. Its position as a leading distributor in the healthcare and consumer space continues meant it stood in good stead as the region saw subdued growth and lower consumer spending.
The Eurozone and UK make the ‘International’ segment of Imperial. International operations generated ZAR1bn or 45% of group revenue and ZAR545m or 33% of group operating profit in H1-19. In Europe, industries such as steel, chemicals and automotive remain under pressure. While Germany avoided entering a recession, trading conditions are increasingly deteriorating, resulting in a decline in volumes across key industries, offset by new contract gains and cost-cutting initiatives. In the UK, Brexit continues to increase economic and political uncertainty, with the potential risk of depressing consumer demand and activity, ongoing risk to the volumes of express palletised distribution business (Palletways).
Source: Imperial Logistics
*ZAR = €0.06/ ZAR = $0.07
