Car rental boosts Imperial Holdings

Car rental boosts Imperial Holdings

A rebounding tourism sector in South Africa has boosted profits at Imperial Holdings.

The transport group benefited as tourists returned to Africa’s largest economy, posting total diluted headline earnings per share of 941 cents for the year ended June 2010, up 39 per cent from 675 cents a year ago.

Fiscal full-year profit rose 35 per cent to 1.94 billion rand (£170 million), compared with 1.44 billion rand a year earlier.

Operating profit grew 34 per cent to R3.3 billion (£290 million).

All Imperial divisions increased operating profits during financial 2009, with the main contributors being the insurance and distribution divisions.

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Car rental and tourism divisions, which have less volatile profit streams, generated ten per cent of revenue.

Imperial operates the Grosvenor Tours, Gage Car Hire and Tempest Car Hire brands in South Africa.

Imperial chief executive Hubert Brody said the group had continued to deliver outstanding results notwithstanding the tough economic conditions which still prevail in many of its markets.

“We have focused on operational efficiencies, increasing our margins, managing costs tightly, lowering our debt and on sound marketing,” he explained.

“We’ve ensured our acquisitions have been earnings enhancing and we continue to concentrate on capital management.”

World Cup

Looking ahead Imperial warned the rate of growth in new vehicle sales may slow as the base from which it is expanding is higher and car rental demand tapers off following the soccer World Cup, which ended in July.

A planned emissions tax on new cars may also pressure the affordability of vehicles.