Imperial targets growth from global logistics unit

IMPERIAL Holdings is planning an international expansion of its logistics business, which ranges from inventorytaking drones to pharmaceuticals delivery, as SA’s sixth-largest company seeks to capitalise on growth opportunities and offset the effect of a weak currency.

The company’s logistics division would be the main growth driver of the business, CEO Mark Lamberti said.

“The logistics business will become an increasingly global business,’’ he said. “This will be a major growth vector and that will be mainly off the continent.’’

Mr Lamberti’s work on simplifying the company and selling assets in his two years at the helm has effectively divided Imperial in two. The other half is a vehicles business that includes importing, dealerships and rental operations in subSaharan Africa. The import division had been affected by the weaker rand, which fell 25% against the dollar last year, due to the rising cost of buying in international markets, Mr Lamberti said.

As the structure of the group became clearer, analysts and shareholders were asking whether Imperial could split the logistics and vehicles operations into two separate companies, Mr Lamberti said. “I’m not ready to answer that yet; there’s work to do,’’ he said. “But that is the obvious question.’’

Imperial shares rose 6.1% to R150 on Friday. The stock has increased 26% this year, valuing the company at R30.4bn.

A potential split of the company could make sense in the future, once Imperial had expanded its logistics business further, said Mark Hodgson, an analyst at Avior Capital Markets, who rates Imperial the equivalent of buy.

“It’s something more for the medium to long term,” he said.

“It certainly gives them something to work towards, but I think in the short term you need the cash flows of the vehicle business to continue to build that logistics business.” Mr Lamberti’s comments about logistics growth showed that “they are trying to take control of their destiny”, he said.

“There’s certainly a lot of strategic attention and action taking place.”

Since Mr Lamberti became CEO in March 2014, Imperial had announced R4.7bn of disposals, and it would probably sell about another R3bn of assets by the end of this year, at least half of which would be in real estate, he said.