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MOTUS HOLDINGS LIMITED - Voluntary Pre Closed Period Trading Update

Release Date: 19/06/2019 09:00
Code(s): MTH     PDF:  
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Voluntary Pre Closed Period Trading Update

Motus Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 2017/451730/06
Share code: MTH
ISIN: ZAE000261913


The South African and global economic and political environments have been unsettled during the
period. In South Africa, low economic growth, a weak currency and high unemployment have negatively
impacted GDP growth and disposable income, which have negatively affected consumer spending and
vehicle affordability. The automotive market remains competitive and consumers continue to trade
down with the shift to affordable vehicles from premium brand vehicles. Worldwide, the automotive
industry is facing considerable change, with major disruptive trends likely to change the way vehicles
are purchased, used and maintained in the medium to long term.

Operational performance
South Africa
The total vehicle market performance in South Africa declined by 2,4% (11 months to May 2019: 496
512 units, May 2018: 508 785 units). The Retail and Rental operations are experiencing difficult trading
conditions but these are partially offset by cost containment and the elimination of unprofitable
dealerships. Entry level vehicle and small SUV sales in the dealership channel have assisted the
Importer segment. The Motor-related Financial Services segment remained stable. The Aftermarket
Parts business has been enhanced by the acquisition of a controlling shareholding in the Taiwanese
wholesaler, ARCO in March 2018. The centralised Finance and Insurance business across the dealer
network, which executes group financial services strategies, has provided economies of scale and a
competitive advantage for the business.

United Kingdom (UK)
The UK operation has been impacted by the political uncertainty arising from Brexit. Despite the
negative impact of Brexit on vehicle sales the DAF commercial and the Pentagon passenger
dealerships remain profitable. The Mercedes commercial dealerships have been negatively impacted
due to the once-off restructuring of the business, carbon emission issues resulting in a lack of inventory
availability, lower truck and van sales resulting in a reduction of variable margin earned. Senior
management changes were introduced to improve systems and the future profitability of the Mercedes
commercial operations.

The Australian economic environment remains competitive. SWT (Melbourne) dealerships purchased
in October 2017 recorded an improvement while the Sydney business was negatively impacted by
lower volumes due to the over exposure to certain brands that performed below expectations in the

Participation across the automotive value chain through our four business segments and a diversified
portfolio in the automotive industry provides resilience in difficult operating conditions. In addition, our
fully integrated business model and brand representation across the segments provides a more
defensive business model.
Our strategic objectives are centred around deepening our competitiveness and relevance across the
automotive value chain by driving organic growth through optimisation and innovation, bolt-on selective
international acquisitions to improve brand representation and/or extend the footprint in adjacent
regions to leverage our existing capabilities and networks.

Guidance update
Shareholders are referred to the SENS announcement of 26 February 2019 where we provided
guidance for the financial year to 30 June 2019.
MOTUS remains focused on longer-term trends in the automotive industry and continues to evaluate
how these changes will impact the market we operate in. Cost management and innovation initiatives
should benefit the group in the medium to long term.
We provide updated guidance to 30 June 2019 as follows:

    -     challenging economic trading conditions to remain for the short and medium term in all the
          geographies in which we operate;
    -     to maintain (previously increase) revenue;
    -     to maintain operating profit;
    -     to improve working capital efficiency and reduce debt compared to December 2018; and
    -     to achieve growth in normalised HEPS.

MOTUS is currently finalising its results for the year ending 30 June 2019 and is scheduled to release
its results on 28 August 2019.

The forecast financial information herein has not been reviewed or reported on by MOTUS’ external
independent auditors. The information contained in this announcement contains the views and
forecasts of MOTUS management at the time of publication.

19 June 2019

Standard Bank of South Africa Limited

Date: 19/06/2019 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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