The old proverb that "it's an ill wind that blows nobody any good"rang true for logistics company Imperial, which gained R6bn in new revenue for the year ended June 30.
Imperial CEO Mohammed Akoojee said this week: "The demand for logistic services has increased dramatically.
"This is prevalent in our new business revenue, it is prevalent in our strong contract renewal rate and it's prevalent in our new business pipeline.
"There are positive things that we need to take advantage of that have been a result of some of the impacts of Covid-19, particularly the need for resiliency in supply chains. As such our services have become even more relevant."
This impact was felt across the group, which transports everything from fuel and health-care products to alcohol and other consumer goods.
Revenue, excluding assets that have been sold, rose 13% to R52.2bn. Operating profit surged 60% to R2.34bn, even after approximately R364m was shaved off due to Covid-19-related lockdowns and restrictions around the world. Headline earnings per share rose 218% to 334c.
Akoojee said: "What has driven the results performance has been the way we have in my mind positioned Imperial as an end-to-end service provider. What I mean by that is if you look at flow of product, in terms of how product comes into Africa and then gets to an end consumer, Imperial plays a meaningful role in that entire value of supply chain, particularly in the consumer and health-care sector, which is about 65% of our revenue in Africa.
"And there are only a few competitors that can offer a client route to market into some of the most challenging countries on the continent. To give you an example, we take product into Nigeria to 40,000 points of sale in health care. In Ghana we do about 1,000 points of sale and Kenya 3,000 to 4,000 points of sale."
Another factor that had underpinned the group's performance was its diversification across so many different industries, which gives "us a lot more levers to pull".
"We are not overexposed to commodities, we are not overexposed to the consumer. We have a diversified client base across the business. And this has been driving revenue and profit growth in a difficult environment," Akoojee said.
Makwe Masilela, who heads Makwe Fund Managers, said Imperial's good results show "they are continuing with their strategy of disinvesting" in non-core areas such as the European and South American shipping businesses, which they sold for R4.7bn, and focusing on "being a gateway to Africa" by buying other companies such as J&J Group.
"The group had a very strong recovery in volumes and profits ... Up to the end of June last year they lost about three months as the hard lockdown began in March and continued up until June."
New revenue streams Imperial secured are equally split between the group's three main sectors: its market access division that sources, markets, distributes and sells health-care and consumer goods in more than 20 countries including Kenya, Nigeria, Namibia, Mozambique and Ghana; and its Logistics Africa and Logistics International divisions.
Imperial has also emerged largely unscathed by the violence and unrest that erupted in KwaZulu-Natal and parts of Gauteng in July.
Akoojee said that although there was a "big impact on trading", with the N3 corridor between Durban and Johannesburg being closed for two or three days, Imperial had been minimally affected, with only one of its trucks being significantly damaged. None of its warehouses were damaged.
He said the events of July had no effect on Dubai-based DP World's R12.7bn takeover bid for Imperial, which is expected to be concluded in February if all approvals are met.
Akoojee said: "They [DP World] are investing for the long term and the violence and unrest was a once-off. I can confirm that what happened in July is not an issue."
Negotiations between Imperial and DP World have been concluded and Imperial has "signed the transaction implementation agreement", with only shareholder and competition authority approval still required.
Shareholders, the majority of which have indicated they are not averse to the transaction, will be voting this Friday. Akoojee expects a decision by the competition authorities by the end of this calendar year.
While there has been market concern about a delisting of a company of the quality of Imperial from the JSE, Akoojee said that "from a JSE listings perspective", that investment opportunity "goes away", but attracting an investor to SA and the rest of Africa that is "of the calibre of DP World brings a lot for our economy and the continent".
"They [DP World] are a big investor in infrastructure and ports, which is what our country and continent need."
Akoojee is set to stay on at Imperial if the takeover goes ahead, saying that he will continue to focus on the group's strategy of being the gateway to Africa for clients.
"In my mind the Africa strategy will be accelerated because obviously having a big brother like that [DP World] will help us accelerate a lot of goals we have in terms of expanding the business."
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