On Tuesday, IPL surged 6.11% to close at R200 per share after it released results for the year ended 30 June 2017. In it, revenue increased by 1% to R119.5bn, while operating profit grew by 2% to R6.5bn. However, despite the uptick, the group reported an 18% decline in its profit before tax, negatively affected by foreign exchange losses of R619mn. As a result, earnings per share dropped by 14% to come in at 1,339 cents, while headline earnings per share declined by 10% to 1,390 cents. The board cut IPL’s final dividend to 330 cents, down from 425 cents a year ago, resulting in an 18% slump in the full-year dividend to 650 cents.
On Tuesday, Imperial released interim results for the six months ended 31 December 2016. During the period, revenue increased by 2% to R61.3bn, while operating profit rose by 4% to R3.2bn. However, if you exclude the current year’s acquisitions, both total revenue and operating profit would have declined by around 3%. Overall, core earnings per share fell by 8% to 795 cents, while earnings per share dropped by 23% to 679 cents. Headline earnings per share slumped by 15% to come in at 682 cents, down from the 587 cents recorded previously. Since 2015, Imperial Holdings has disposed of, or is busy disposing of, 42 businesses with a total revenue of R11.9bn and operating profit of R937m. The group has also sold off, or is in the process of selling, 82 properties worth around R5.1bn. All this in an effort to improve capital allocation in very difficult operating environment. The board declared an interim dividend of 320 cents per share. It also announced that the dividend would be tied to HEPs in future. Imperial previously had no formal dividend policy.
Imperial rose sharply on Friday afternoon, with the share gaining 2.19% to settle at R150.50, boosted by reports it would be reorganising its operations into two units. South Africa’s sixth largest company by sales will be split into its logistics and vehicle divisions, with each division having its own CEO. As of the 1st July 2016, the newly created Logistics and Vehicles divisions will be reported on as single entities, with Marius Swanepoel set to be appointed as the CEO of the new logistics unit. Current CEO, Mark Lamberti, will remain the executive chairman of the vehicle unit until the end of the year, after which CFO Osman Arbee will take over. The news has boosted Imperials share price to its highest level in 6-weeks and has extended its gains to around 26% for 2016 alone.