Published Date: 2021-09-08 | Source: INCE|Community | Author: The Finance Ghost
Imperial Logistics is on the cards to be bought out and delisted from the JSE.
"What else is new?" I hear you cry. Sadly, it's a reality at the moment that the JSE is shrinking and so is our choice of investments on the local exchange.
On the positive side, it means that international buyers are still seeing value in South Africa, despite the continuous flow of weird, wacky and sometimes depressing news that we face on a weekly basis as South Africans.
Imperial has released results for the 12 months to June 2021 and they were solid, with revenue up 13%. Earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed 22% and headline earnings per share (HEPS) took a rocket trip to the moon by jumping 218%.
Naturally, some of this was because the hard lockdown was in the base. This helps growth rates look far better than would otherwise have been the case.
Debt ratios improved (net debt : EBITDA reduced to 1.3x from 2.8x the prior year) and cash flow conversion was excellent. However, there was no final dividend due to the pending deal for the business.
Imperial had a busy year with its portfolio of businesses. It announced the acquisitions of Deep Catch Namibia Holdings for R633m and the J&J Group for R4.4bn. The company also sold Pharmed, which was a loss-making business. The proceeds of R4.7bn from the sale of the European and South American shipping businesses also landed in the account.
The potential buyout by DP World remains subject to shareholder approval and other regulatory approvals. The circular was distributed on 17th August and the shareholder meeting is scheduled for 17th September.
Imperial's board thinks that the deal will be concluded by February 2022. That's a handy point to remember: buyouts can easily take 6 months to be finalised even after the circular is sent, assuming no major headaches with regulators.