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Short-form summarised annual financial results for the year ended 30 June 2019
Motus Holdings Limited
("Motus")
Incorporated in the Republic of South Africa
Registration number: 2017/451730/06
ISIN: ZAE000261913
Share code: MTH
Short-form summarised annual financial results for the year ended 30 June 2019
Financial highlights
- Revenue up 3,5%, at R 79 711 million (2018: R 77 001 million)
- Operating profit up 1%, R 3 620 million (2018: R 3 593 million)
- Normalised HEPS up 11%, 1 090 cents per share (2018: 986 cents per share)
- Full year dividend up 10%, 490 cents per ordinary share (2018 pro forma*: 444 cents per ordinary share)
- EPS down 18%, 953 cents per share (2018: 1 162 cents per share)
- HEPS up 2%, 1 009 cents per share (2018: 986 cents per share)
- Net asset value per share up 7%, 6 185 cents per ordinary share (2018: 5 762 cents per ordinary share)
- Return on Invested Capital stable at 13,5% (2018: 13,5%)
- Weighted average cost of capital 10,7% (2018:10,7%)
- Cash generated from operations R2 743 million (2018: R4 301 million)
- Net debt to equity ratio 55,9% (2018: 50,7%)
Note:
HEPS: Headline earnings per ordinary share
EPS: Earnings per ordinary share
Normalised: this excludes the once-off non-cash flow impact of share based payment expenses amounting to
R160 million
Return on invested capital and Weighted average cost of capital are calculated on a rolling 12-month basis.
*Pro forma: MOTUS listed in November 2018.
Environment
The Global and South African political and economic situations are unstable. The weakening of the global
economy is weighing heavily on emerging markets and South Africa is bearing the brunt of these global issues.
In addition, the political challenges are exacerbating the economic problems for SA Inc. This has adversely
impacted businesses and the people of South Africa.
The new vehicle market continues to be affected by the weak macro-economic environment in the country and
pressure on household disposable income. Industry margins could continue to underperform as consumers continue
to delay purchases, trade down with the shift to cheaper vehicles and place pressure on the supply of pre-owned
vehicles.
The automotive industry remains highly competitive with technological advances and increasingly empowered
consumers. As the connected consumer becomes more prevalent in the market, it is imperative to remain relevant
to the needs of the digitised consumer. Changes to vehicle ownership structures in South Africa are imminent
namely; ride sharing and car sharing type of businesses with people in search of economical, convenient and
sustainable ways to travel.
The UK market was down for the 12 months to June 2019. The market remains competitive and unstable, due
to Brexit uncertainties and growing geopolitical tensions.
The Australian automotive industry has faced tough market conditions and a downward sales trend. Tight
financial lending and regulatory constraints have contributed to challenging market conditions. The market
declined for the 12 months to June 2019, with SUV vehicle models continuing to dominate the market.
Financial performance
The South African operations contributed for the year, revenue and operating profit of 67% and
90% respectively, with the remainder being contributed by the UK, Australia and South East Asia.
Our performance was resilient with an improvement in key financial metrics to June 2019. We are pleased
with the broadly solid performance, given the uncertainties in the markets in which we operate.
The Group's passenger and commercial vehicle businesses, including the UK and Australia, retailed
131 725 new vehicles (2018: 146 455) and 83 554 pre-owned vehicles (2018: 81 123) during the year.
The reduced sales are attributable to market contraction and reduced volumes to the car rental industry
in South Africa, where the margins are lower.
South African annual unit vehicle sales declined by 2,4% as reported by NAAMSA. The market continues to
experience a decline in sales of luxury vehicles, in favour of entry level vehicles and small to medium
SUVs, as consumers continue to trade down due to affordability. UK and Australia acquisitions continue to
contribute positively to sales volumes, despite a decline in these markets.
Revenue improved by 3,5% despite reduced sales volumes attributed to market contraction and the sales mix,
enhanced by price increases and acquisitions. The revenue contribution from pre-owned vehicle sales increased
by 11%. The selling of parts and rendering of services also contributed positively. Operating profit improved
by 1% to R3 620 million. All business segments reported an increase in operating profit with the exception of
the Retail and Rental segment. Operating expenses increased by 5%. Cost control initiatives during these
economically challenging times remain a management focus.
The Import and Distribution segment reported a 3% decline in revenue with growth in operating profit of
3%, the Retail and Rental segment reported 3% growth in revenue with an operating profit decline of 6%, the
Motor-Related Financial Services segment reported flat revenue with a 5% growth in operating profit and the
Aftermarket Parts segment reported an increase in revenue and operating profit of 8% and 11%, respectively.
Net working capital increased by 13% to R7 580 million from a low base in June 2018 of R6 731 million. This
increase is due to normalisation of working capital levels at the importers, as vehicle supply normalised.
Higher inventory levels were carried at the dealerships mainly due to recent acquisitions and a slowdown in
vehicle sales. Motor-Related Financial Services' working capital increased, mainly due to lower trade payables
relating to vehicles for hire. In the Aftermarket Parts segment, additional stock was carried due to
acquisitions and a wider selection of brands being introduced to capture lower-end consumers.
Liquidity
The liquidity position is strong with R7,5 billion unutilised banking facilities. 61% of the Group debt is
long-term in nature. Excluding floorplans which can be seen as part of the working capital cycle, 39% of the
debt is at fixed rates.
Dividend
A final dividend of 250 (interim 240) cents per ordinary share has been declared bringing the full year
dividend to 490 (2018 pro forma: 444) cents per ordinary share. This represents a 10% increase from the
prior year and is in line with our targeted pay-out ratio of 45% of normalised HEPS.
Board change
Mrs KA Cassel joined the board as executive director with effect from 1 July 2019. The board welcomes
Mrs Cassel and looks forward to her contribution.
Company Secretary change
Mr RA Venter resigned as Company Secretary at 30 June 2019 and Mrs JK Jefferies was appointed as Company
Secretary with effect from 1 July 2019. The board would like to thank Mr Venter for his positive contribution
and legal counsel during the past 15 years as part of Imperial Holdings Limited and recently with Motus. The
board welcomes Mrs Jefferies and looks forward to working with her.
Strategy
We are well positioned to maintain our leading automotive retail market share in South Africa and grow in
selected international markets. We aim to sustain best-in-class earnings, targeted returns and generate high
free cash flows providing a platform for a consistent dividend pay-out through the cycle.
We have a strategic focus on deepening our competitiveness and relevance across the automotive value chain,
by driving organic growth through optimisation and innovation, and with selective acquisitions.
Prospects
The Group has produced solid financial results for the year under challenging trading conditions. South
Africa's socio-political and economic outlook is fragile which impacts sentiment, economic activity and the
volatility of the Rand. Despite this, we anticipate solid operating and financial results for the year to
June 2020, subject to stable currencies in the economies in which we operate and South Africa retaining its
investment rating grade.
On behalf of the board we thank all the shareholders and stakeholders for their support. We will continue to
execute on our strategies.
OS Arbee OJ Janse van Rensburg
Chief Executive Officer Chief Financial Officer
26 August 2019
Declaration of final ordinary dividend for the year ended 30 June 2019
Notice is hereby given that a gross final ordinary dividend in the amount of 250,00 cents per ordinary
share has been declared by the board of Motus, payable to the holders of the 196 513 720 ordinary shares.
The dividend will be paid out of reserves.
The ordinary dividend will be subject to local dividend tax rate of 20%. The net ordinary dividend, to
those shareholders who are not exempt from paying dividend tax, is therefore 200,00 cents per share.
The company has determined the following salient dates for payment of the ordinary dividend:
2019
Last day for ordinary shares to trade cum ordinary dividend Tuesday, 17 September
Ordinary shares commence trading ex-ordinary dividend Wednesday, 18 September
Record date Friday, 20 September
Payment date Monday, 23 September
The company's income tax number is 983 671 2167
Share certificates may not be dematerialised/rematerialised between Wednesday 18 September 2019 and
Friday 20 September 2019 both days inclusive.
On Monday, 23 September 2019, amounts due in respect of the ordinary dividend will be electronically
transferred to the bank accounts of certified shareholders that utilise this facility. In respect of those
who do not, cheques dated 23 September 2019 will be posted on or about that date. Shareholders who have
dematerialised their shares will also have their accounts, held at their Central Securities Depository
(CSDP) or broker, credited on Monday, 23 September 2019.
On behalf of the board
JK Jefferies
Company Secretary
26 August 2019
Corporate information
Directors
GW Dempster (Chairman)*
A Tugendhaft (Deputy Chairman)
OS Arbee (CEO)
OJ Janse van Rensburg (CFO)
KA Cassel
P Langeni*
S Mayet*
K Moloko*
MJN Njeke*
*Independent non-executive
Company Secretary
JK Jefferies
Group Investor Relations Manager
N Varty
Business address and registered office
1 Van Buuren Road
Corner Geldenhuis and Van Dort Streets
Bedfordview, 2007
(PO Box 1719, Edenvale, 1610)
Share transfer secretaries
Computershare Investor Services Proprietary Limited
1st Floor Rosebank Towers
15 Biermann Avenue
Rosebank
Johannesburg
2196
Auditors
Deloitte and Touche
20 Woodlands Drive
The Woodlands
Woodmead
2025
Sponsor
The Standard Bank of South Africa Limited
30 Baker Street
Rosebank
Johannesburg 2196
Release date 28 August 2019
This announcement is itself not audited but extracted from audited results. The forecast information herein
has not been reviewed or reported on by Motus' auditors.
The proforma information contained in this announcement is the responsibility of the directors and has
been inserted for illustrative purposes and due to their nature are not in accordance with International
Financial Reporting Standards and may not fairly present the financial position of Motus.
Full announcement:
The content of this unaudited announcement is the responsibility of the directors of Motus. It is only
a summary of the information contained in the full announcement and it does not contain all details.
Any investment decisions by investors should be based on the consideration of the full announcement which
is available at https://senspdf.jse.co.za/documents/2019/jse/isse/mthe/MTH_FY.pdf and on Motus' website at
https://www.motuscorp.co.za/presentations-test/. The full announcement is also available for inspection at
the registered office of Motus and the offices of the sponsor, at no charge, weekdays during office
hours 09:00 to 16:00.
Date: 28/08/2019 08:00:00
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