For the year ending June 30, 2020, Imperial Logistics reported its continuing revenue was up by 5% to ZAR*46.4bn. The company’s continuing EBITDA, however, was down by 11% to ZAR4.1bn, as was its operating profit, which fell by 40% to ZAR1.5bn.
The Market Access business delivered a resilient performance in challenging circumstances, growing revenue by 18% to ZAR12.4bn and decreasing operating profit marginally by 1% to ZAR710m. Despite the negative impact of Covid-19 on trading and volumes, results benefited from significant new contract gains of ZAR1.7bn annualised revenue and the inclusion of new acquisitions concluded in the second half of the 2020 financial year. While its healthcare businesses performed well and it was still able to service various channels in most markets in its consumer business, demand reduced due to lower activity, mainly in markets where sales of liquor and tobacco were negatively impacted due to Covid-19 related trading restrictions.
In an already difficult, low-growth and the increasingly competitive trading environment – exacerbated by the impacts of Covid-19 – Logistics Africa recorded revenue growth of 3% but operating profit declined by 34%. There was a 45% drop in revenue during the peak of lockdown in April. Results were negatively impacted by Covid-19 related trading restrictions, associated once-off costs and lower margins in the healthcare businesses in South Africa. Results were supported by new contract gains of ZAR2bn annualised revenue, the benefit of cost-saving initiatives undertaken in 2019 and cost management during Covid-19. Around 90% of this business is currently in operation. Imperial anticipates normal trading to return in the short to medium term given that lockdown restrictions on alcohol and tobacco have been lifted. This business will also benefit from further cost reduction initiatives of ZAR200m planned in 2021.
Most impacted by the Covid-19 pandemic was Logistics International business with revenue and operating profit from Logistics International decreased by 7% and 78% respectively in Euro terms. Revenue of €78m was lost during the peak of Covid-19 as this business has significant exposure to the automotive and industrial sectors (65% of revenue), where the impact of the pandemic was most severe. The high fixed cost base (50%) in this business, once-off impairments due to Covid-19 and low water levels in South America negatively impacted operating profit.
Mohammed Akoojee, Group CEO of Imperial, said, “The past year has been extraordinary and challenging – and as individuals and a business we have faced unprecedented circumstances and difficult market conditions across operations. Despite the 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, effectively managed costs and recorded significant progress against its strategy.”
Source: Imperial Logistics
*€1=ZAR19.44 / $1=ZAR17.36
