CAPE TOWN – Imperial Logistics performed in line with expectations in the first three months of its 2021 financial year with revenue up by 24 percent and operating profit up by 280 percent over the last quarter of the 2020 year.
However, while volumes and operating activities had improved since June 2020 after many countries eased lockdown restrictions, the business had not yet fully recovered to pre-Covid-19 levels, the group, which operates in over 26 African and European countries said in a pre-close statement yesterday.
Contract renewal rates remained strong at 75 percent. A pipeline of new opportunities and new business revenue of R6.1 billion had been secured to the end of September.
The group said the impact of Covid-19 on the economies of African countries where it operated was severe.
All businesses in the Market Access division were in operation.
New business revenue of about R1.8bn per year was secured to the end of September.
Competition Commission approval was awaited for the sale of the Pharmed business in South Africa.
The disposal did not represent Imperial’s exit from the local healthcare industry, merely an exit from non-core wholesale activities.
Logistics Africa’s volumes and margins were being impacted by weak economies, high unemployment and low consumer spending, exacerbated by Covid-19. Logistics Africa grew revenue in the first quarter compared to the first quarter of 2020, driven mainly by new contract gains.
The Transport and Warehousing and Specialised Freight businesses benefited from volume growth in mining and a recovery in alcohol trade.
However, operating profit was dented due to the impact of margin pressure on renewals as well as the effect of the extended ban on liquor, tobacco and related industries.
At Logistics International a return to lockdown restrictions in Europe could impact the businesses.
Imperial shares gained 1.89 percent to close at R40.50 on the JSE on Monday.