Imperial books 37% profit jump

Johannesburg - Transport group Imperial Holdings [JSE:IPL] booked a 37% rise in full-year profit on Wednesday, helped by robust new auto sales at home while a strong German economy bolstered its logistics unit.

Imperial, which operates car rental, dealerships and logistics businesses, said on Wednesday diluted headline earnings per share totalled 1 289c in the year to end-June compared with 941c a year earlier.

Imperial, one the biggest operators of auto dealerships in South Africa, has been benefiting from lower interest rates and a tentative economic recovery.

Previous views of a rate hike before the year end had weighed on the stock.

The market now sees a rate cut as more likely, given the weak global and local economy.

Shares in Imperial are down about 14% so far this year, lagging behind an 8% fall in the broader All Share [JSE:J203] index for the same period.

"The rate of growth in new car sales is expected to be lower in an uncertain environment," the company said in a statement.

South African vehicle sales growth rose 10.5% year-on-year in July, official data showed earlier this month, but analysts say the number showed slower momentum in demand for new cars.

Revenue rose 21% to R64.6bn helped partly by a string of bolt-on acquisitions in the past two years. Imperial said those acquisitions, which include a logistics firm CIC Holdings and car parts merchant Midas, added R7bn to annual turnover over the past 24 months.

The company, whose trucks and cargo vessels haul everything from fast-moving consumer goods to coal, said it logistics unit in Europe was robust thanks to a strong economy in Germany but the southern Africa part of the business was under pressure.