Wrap Text
Short-form summarised interim financial results for the six months ended 31 December 2019
Motus Holdings Limited
Incorporated in the Republic of South Africa
Registration number: 2017/451730/06
ISIN: ZAE000261913
Share code: MTH
("Motus")
Short-form summarised interim financial results for the six months ended 31 December 2019
Financial highlights
- Revenue up 7%, R 41 954 million (2018: R 39 379 million)
- Operating profit stable, R 1 831 million (2018: R 1 838 million)
- Earnings per share up 10%, 479 cents per share (2018: 436 cents per share)
- Headline earnings per share up 9%, 517 cents per share (2018: 474 cents per share)
- Interim dividend maintained, 240 cents per ordinary share (2018: 240 cents)
- Net asset value per share up, 6 221 cents per ordinary share (2018: 6 145 cents)
- Return on Invested Capital* reduced to 12,6% (2018: 14,3%)
- Weighted average cost of capital* improved to 10,3% (2018:10,8%)
- Cash generated by operations R1 121 million (2018: R382 million)
- Net debt to equity* 73,6% (2018: 63,4%)
- Net debt to EBITDA* 1,8 times (2018: 1,5 times)
* Excludes the impact of IFRS 16
Note:
1) Ratio analysis is provided excluding the impact of IFRS 16 to ensure comparability to prior years and is in line with
covenant methodology used by our debt providers.
2) Return on invested capital and Weighted average cost of capital are calculated on a rolling 12-month basis.
Environment
The global and South African political and economic environments remain unstable. Emerging markets
have been more severely affected compared to developed economies. The latest spread of the
Coronavirus will impact economies throughout the world as China is a large part of the global
economy. The impact is unknown at this stage, however, Motus will continue to monitor the situation.
The economic outlook for South Africa remains weak and challenging in the immediate and medium
term. Consumer and investor confidence is depressed resulting in low economic growth rates being
projected for the immediate and medium term. This is exacerbated by the potential investment
ratings downgrade, retrenchments (mainly in our customer base), state-owned entity problems, load
shedding, lower tax revenues, a deteriorating fiscal position and high unemployment. Additional risks
that are business specific include access to credit, higher bank bad debt provisions, consumers under
pressure, cyber risk and legislation which results in additional cost of doing business.
In South Africa, the total new vehicle market performance declined by 2% for the six-month period
according to NAAMSA (six months to December 2019: 279 016 units, six months to December 2018:
284 817 units). At December 2019 our retail market share is 20,1% (December 2018: 19,3%), positively
impacted by the Motus Importers who achieved higher sales volumes in the entry level models. Motus
performed better than the market and reported 2% higher new and pre-owned vehicle unit volumes
(December 2019: 111 939 units; December 2018: 109 796 units).
The UK new vehicle market has declined. The market has been negatively impacted by weak business
and consumer confidence, political and economic instability, exacerbated by Brexit uncertainty.
The Australian economy remains depressed with challenges including, restrictive regulatory lending
conditions currently facing consumers, slow wages growth and extreme environmental factors. The
economy is negatively affected by the trade war tensions between the United States of America and
China, as China is their dominant trading partner. The Australian automotive industry remains
competitive, with new vehicle sales down for the six months to December 2019 compared to 2018.
The global automotive sector is going through a period of unprecedented change, with declining
volumes, new technologies and business models, demanding consumer expectations and increased
competition. The industry is experiencing a dramatic shift in the way vehicles are owned, powered
and driven, as well as in the way they are manufactured. In response to disruption, many OEMs are
building strategies around key areas of change, namely, connectivity, autonomous driving, sharing and
electrification/hybrids. We remain focused on keeping abreast of these changes and aligning with
customer needs and expectations.
Financial performance
The South African operations contributed 67% to revenue and 93% to operating profit, for the period
(2018: 68% and 92%), with the remainder being contributed by the UK, Australia and South East Asia.
The results for the period reflect strong strategic and operational progress based on a resilient
financial performance in a challenging environment. We are pleased with the stable performance our
diversified offering provides, given the uncertainties in the markets in which we operate.
Revenue improved by 7% mainly due to the increased revenue in the Retail and Rental and
Aftermarket Parts business segments of 7% and 5% respectively. Higher vehicle unit volumes of 2%
resulting from increased pre-owned vehicle sales, higher revenue generated from the rendering of
services, an increase in selling prices and the bolt-on acquisitions of Ford and DAF dealerships (UK)
improved revenue. Revenue growth excluding acquisitions was 2%.
Operating profit remained stable. Gross margins have been under pressure due to the competitive
environment. Operating expenses (excluding depreciation) decreased by 6%. The decline in operating
expenses is a result of cost containment and a reduction in operating lease charges as a result of IFRS
16. Excluding the effects of IFRS 16 operating expenses would have decreased by 1%. Costs have been
well contained over the last three years, adjusting to our changing economic environment.
Goodwill and intangible assets increased mainly due to the acquisition of the DAF dealerships in the
UK (R139 million) in July 2019. Goodwill amounting to R60 million relating to the Mercedes operations
in the UK was impaired. This is due to diesel taxis no longer being sold and anticipated higher duties
on imported inventory when Brexit is finalised.
Vehicles for hire increased primarily due to the increase in vehicles for hire in the Retail and Rental
segment. This was due to the change from leased vehicles to owned vehicles and the cyclical car rental
up-fleet, recognised in the statement of financial position in the car rental business.
Net working capital increased since June 2019 but is in line with December 2018. Working capital was
mainly impacted by the inclusion of the Chinese distribution warehouse in the Aftermarket parts
business segment.
Motus generated R1 121 million (2018: R382 million) cash from operating activities (before capital
expenditure) due to lower cash utilised in working capital.
Liquidity
The liquidity position is strong with R5,3 billion unutilised banking facilities. Excluding lease liabilities,
60% of the Group debt is long term in nature and 29% of the debt is at fixed rates. Excluding floorplans
which can be seen as part of the working capital cycle, 75% of the Group debt is long term in nature
and 36% of the debt is at fixed rates.
Dividend
An interim dividend of 240 (2018: 240) cents per ordinary share has been declared. This is in line with
our guideline payout ratio of 45% of headline earnings per share.
Subsequent events
In February 2020, the Group acquired eight passenger dealerships in Ballarat, Australia (provincial city
in Victoria) for between R380 million and R420 million, including goodwill. Due to the recent nature
of this acquisition, the amounts are still provisional.
Board changes
There have been no changes to the board of directors.
Strategy
We remain well positioned to maintain our leading automotive position in South Africa and grow in
selected international markets. 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 bolt-on acquisitions. We aim to deliver stable profit margins and cash
flows while maintaining a reliable dividend pay-out through the cycle.
Prospects
The results for the period reflect strong strategic and operational progress based on a resilient
financial performance in a challenging environment. We are pleased with the stable performance
given the uncertainties in the markets in which we operate.
The negative impact of the Coronavirus on a number of the OEMs production and supply of vehicles
(as their parts supply are interrupted), the Aftermarket Parts business and the global economy is
unknown at this stage. This could adversely impact the local and global economies in the short term.
Due to the weak macro and consumer environment that appears to be deteriorating, we are cautious
about expectations for the short and medium term.
Despite these challenges, we remain committed to delivering stable operating and financial results for
the year to June 2020.
We thank all shareholders, the board of directors, management and stakeholders for their support.
OS Arbee
Chief Executive Officer
OJ Janse van Rensburg
Chief Financial Officer
25 February 2020
Declaration of interim ordinary dividend for the six months ended 31 December 2019
Notice is hereby given that a gross interim ordinary dividend in the amount of 240,00 cents per
ordinary share has been declared by the board of Motus, payable to the holders of the 195 513 720
ordinary shares. The dividend will be paid out of reserves.
The ordinary dividend will be subject to a local dividend tax rate of 20%. The net ordinary dividend, to
those shareholders who are not exempt from paying dividend tax, is therefore 192,00 cents per
ordinary share.
The company has determined the following salient dates for the payment of the ordinary dividend:
Last day for ordinary shares to trade cum ordinary dividend Tuesday, 24 March 2020
Ordinary shares commence trading ex-ordinary dividend Wednesday, 25 March 2020
Record date Friday, 27 March 2020
Payment date Monday, 30 March 2020
The company’s income tax number is 983 671 2167.
Share certificates may not be dematerialised/rematerialised between Wednesday, 25 March 2020
and Friday, 27 March 2020, both days inclusive.
On Monday, 30 March 2020, amounts due in respect of the ordinary dividend will be electronically
transferred to the bank accounts of certificated shareholders that utilise this facility. In respect of
those who do not, cheques dated 30 March 2020 will be posted on or about that date. Shareholders
who have dematerialised their shares will also have their accounts, held at their CSDP or broker,
credited on Monday, 30 March 2020.
On behalf of the board
JK Jefferies
Company Secretary
25 February 2020
Corporate information
DIRECTORS
GW Dempster (Chairman)*
A Tugendhaft (Deputy Chairman) **
OS Arbee (CEO)#
OJ Janse van Rensburg (CFO)#
KA Cassel#
P Langeni*
S Mayet*
KR Moloko*
MJN Njeke*
* Independent non-executive
** Non-executive
# 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, 2008
(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 & Touche
20 Woodlands Drive
The Woodlands
Woodmead
2025
SPONSOR
The Standard Bank of South Africa Limited
30 Baker Street
Rosebank
Johannesburg
2196
Release date 26 February 2020
This announcement is itself not audited and the forecast and interim financial information herein has
not been reviewed or reported on by Motus’ auditors.
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/2020/jse/isse/mthe/MTH_HY.pdf and on
Motus' website at https://www.motuscorp.co.za/investors/results/interim-results/.
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: 26-02-2020 08:00:00
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