Retail motor business boosts South Africa's Combined Motor FY results
JOHANNESBURG (Reuters) - South Africa's Combined Motor Holdings Limited (CMH) reported on Tuesday a 17.1 percent increase in full-year headline earnings, buoyed by a strong performance by the group's core retail motor business.
The motor and car hire group said headline earnings per share for the year ended Feb. 28 rose to 332.9 cents per share from 284.2 cents in the previous year.
"The group reported a good set of results..., despite the ongoing challenges presented by a difficult economic, trading and political environment," said Chief Executive Officer Jebb McIntosh in a statement.
The economy slipped into a recession in the first quarter of 2017, then recovered in the next two quarters, although it is expected to lag global growth mainly due to political uncertainty lack of clarity on policy.
The group's core motor retail business achieved sales growth of 11.8 percent, driven mainly by the Toyota, Nissan, Honda and Mazda products, while the luxury market continued its declining trend, it said.
CMH's revenue increased by 3.4 percent to 10.6 billion rand ($882.47 million) from 10.2 billion rand in the previous year, while operating profit increased 15.5 percent to 438.4 million rand.
"Revenue growth was restrained by limited vehicle price increases, as manufacturers fought for market share ... and the continuing downward trend of sales within the luxury vehicle segment," said McIntosh.
The firm declared an annual dividend of 115 cents per share, up 15 percent.
The firm expects the estimated 3 percent to 5 percent rise in new vehicle sales in 2018 to provide a welcome stimulus for the industry.
South Africa's new vehicle sales rose 1.1 percent to 49,233 units in March, data from the trade and industry department showed earlier this month.
($1 = 12.0117 rand)
(Reporting by Nomvelo Chalumbira, editing by Louise Heavens)
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