Imperial Logistics prepares for European exit
CEO says exit plan could take some time
Imperial Logistics is ready to proceed with an exit from its international business as part of its strategy to focus on Africa, the freight group said on Tuesday as it posted a 43% drop in half-year headline earnings.
The company had said in November that it was exploring options for its international business, which operates mainly in Europe and the United Kingdom with significant exposure to the automotive and industrial sectors that have been badly hit by the fallout from the COVID-19 pandemic.
"We have concluded that Logistics International is non-core to our 'Gateway to Africa' strategy and we will explore an appropriate exit plan for this business," CEO Mohammed Akoojee said, adding that the current macroeconomic uncertainty could slow progress.
The international business accounts for 41% of group revenue and 28% of group operating profit. In the six months to Dec. 31, the first half of its financial year, the international business registered a marginal 1% rise in revenue but an 18% drop in operating profit in euro currency terms.
That represented something of a recovery from a punishing second half of its financial year to June 2020, helped by strong volume growth in its express palletised distribution business.
Overall group revenue grew by 15%, supported by new business and acquisitions, despite the decline in trading volumes resulting from the pandemic's impact on operations.
Headline earnings per share from continuing operations fell to 180 cents and the company declared an interim dividend of 83 cents, down from 167 cents in the same period a year earlier, having refrained from a full-year payout last year.
Imperial also concluded acquisitions costing about 120 million rand ($8.2 million) during the period.
These included Parcel Ninja, which will allow it to expand into e-commerce fulfilment, and a 49% stake in Johannesburg-based pharmaceutical manufacturing and healthcare services company Pharmafrique, which trades as Kiara Health. ($1 = 14.6526 rand)