Ramaphosa lifted confidence in SA
Transport and logistics group Imperial says the new political changes under President Cyril Ramaphosa has given rise to improved business and investor confidence, which bode well for its earnings prospects.
Transport and logistics group Imperial acknowledged the new political changes under President Cyril Ramaphosa, saying they have given rise to improved business and investor confidence, which bode well for its earnings prospects.
The company will generate at least 54% of its revenue in the year to end-June, which renders it a key player in the local economy, according to its trading update released on Thursday.
In the matching period a year ago, its revenue line stood at a heady R119.5bn.
The prospect of an economic recovery under Ramaphosa stirred a clamour for locally orientated stocks, pushing the value of Imperial shares on the JSE from R191 in October to a record R284 by the end of January. The stock has since retracted to R220 as “Ramaphoria” abated and the rand retreated from its multiyear best of R11.51/$, reached in February.
Unum Capital trading desk analyst Lester Davids said the stronger rand would have provided scope for the Reserve Bank to cut interest rates, thus helping consumers to start spending again.
The company segments itself into two broad categories. Motus Corporation, which incorporates the motor vehicle chain, is in the process of being unbundled and separately listed later in the year. Imperial Logistics makes up the other part of the business, entailing transport, warehousing and distribution management.
Imperial expects double-digit growth in its headline earnings per share, helped in part by the lower base created in the matching a year ago when earnings dipped.
“The group operates in diverse geographic areas, which gives it the ability compensate … however, the major regions, such as Europe, have been starting to show negative surprises when it comes to economics data releases, while the UK still grapples with its exit from the EU and has also started to signal weaker economic growth,” Davids said.