Global transport and logistics group Imperial Holdings is sticking to its African growth strategy, but is likely to face close scrutiny from investors and shareholders as it sells off businesses, and acquires new ones.
Covid-19 prompted a series of questions by analysts about how the company viewed the value of its businesses as the pandemic casts a shadow, but the group appears confident it will have the balance sheet to pursue its strategy of being a “gateway to Africa”.
The group has refused to be drawn on what SA assets are on the chopping block, but is set to get a boost as it receives the proceeds of the sale of its European shipping business, with the some R3.6bn sale expected to be finalised in June.
The group is also seeking to sell its South American shipping business within the next year, but appears confident it can find a buyer. The group is looking for a medium-sized acquisition that will give it air and sea transport capability.
Covid-19 has put severely crimped the group's cash flow, however, and is currently its focus. Imperial, however, expects the pandemic to lead to casualties in SA's transport sector, which could lessen competition and lead to a rise in prices, as well as volumes.
In other markets, Imperial has secured new contracts that will help boost its sales overtime. Its UK business has renewed contract to provide logistics for a major car manufacturer.
Imperial’s chemical logistics division has been awarded the contract to store and handle lithium-ion traction batteries for the German operations of a major global automotive manufacturer.
Online retail now accounts for nearly 5% of retail sales
For a long time, online retail was said to be coming for traditional retail sector’s lunch due to the rise of e-commerce players such as the US’s Amazon and Naspers-backed Takealot in the local market.
Many doomsayers said the days of brick-and-mortar stores were numbered but even as Takealot topped R196m in sales on Black Friday in 2018, the sector is still young, accounting for a mere 1.4% of total retail spending in 2019 according to Visa.
Data from World Wide Worx shows that this small slice of the retail pie was worth R14bn.
Lockdowns, which have eroded much value in the business sector and economy, may be the growth spurt that the sector needed to grow — at least from toddler to infant.
Travel restrictions and bans on the sale of certain goods and services have forced many businesses, both large and small to embrace technology and increase their presence online.
During this period, indications are that online retail now accounts for close to 5% of retail sales.
Karen Nadasen, country manager of PayU SA, a fintech company that provides payment technology to online merchants, expects this number to possibly reach 10% by the end of 2020.
As a business, if you’re not already involved in this digital revolution, it may be time to take advantage of digital sales channels for your own products and services, or to provide some support for the vast ecosystem of payments providers, door-to-door delivery, curatorship, back-end systems, web developers, social media strategists, online marketers and call centre staff out there.
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