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Imperial Holdings Beats Profit Estimates, Eyes Acquisitions

Aug. 20 (Bloomberg) -- Imperial Holdings Ltd., owner of South Africa’s biggest car-dealer network, said full-year earnings climbed 15 percent as sales at its automotive and logistics units grew across the continent.

Headline earnings per share, which exclude one-time items, advanced to 18.04 rand in the 12 months through June, the Johannesburg-based company said in statement today. That beat the 16.88 rand median estimate of nine analysts surveyed by Bloomberg. Sales rose 14 percent to 92.4 billion rand ($9.11 billion), in line with the forecast by analysts.

“Our portfolio of businesses proved to be resilient despite challenging trading conditions in South Africa,” Imperial’s Chief Executive Officer Hubert Brody said in an e-mailed statement.

The company’s shares advanced 3.8 percent, the biggest gain since June 28, to 211 rand, at the close in Johannesburg, valuing the company at 44 billion rand. The stock has added 6.2 percent this year, compared with a 9 percent rise in the 166-member FTSE/JSE Africa All-Share Index.

Imperial, which imports and distributes vehicles from Korean makers Hyundai Motor Co. and Kia Motors Corp., is grappling with an economic slowdown in South Africa. The rand has weakened 16 percent this year, the worst performer of 16 major currencies tracked by Bloomberg.

‘Tougher Trading’

“We anticipate tougher trading conditions in the new motor vehicle market during the year ahead,” the company said. “Reduced disposable income, a weaker currency and the high base created by strong volume gains in the last four years all present headwinds for growth.”

The company is targeting acquisitions worth 500 million rand to 1.5 billion rand in consumer logistics across Africa and Europe, Brody said in an interview from Johannesburg. Imperial has “4 billion rand of debt capacity to spend,” he said.

Imperial operating profit from Africa excluding its home market advanced 33 percent to 397 million rand. Imperial raised its final dividend 16 percent to 440 cents per share.

To contact the reporter on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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