File picture: Philimon Bulawayo
JOHANNESBURG - Super  Group, the listed transport logistics and mobility group, expects its Supply Chain Africa business to continue to benefit from the positive commodities cycle.

However, group chief executive Peter Mountford said yesterday (mon ) the consumer-facing and other supply chain businesses were expected to remain under severe pressure due to declining consumer spending and the uncertain political environment leading up to the national elections.

Super Group on Monday  reported a 13 percent growth in operating profit to R1.3  billion in the six months to December from R1.15bn in the prior period.

Revenue rose 8 percent to R19.4bn from R17.97bn.

Headline earnings a share grew by 12 percent to 174c from 155c.  An interim dividend was not declared.

Mountford said these results were mainly attributable to the ongoing strong performance by the commodities businesses within Supply Chain Africa as well as Digistics on the back of a number of new Quick Service Restaurant contracts.

He said the other businesses performed adequately despite the challenging economic climate and political uncertainties in a number of countries in which the group operated.

“These results are definitely sustainable. We are starting to see the benefit from the diversity that we have got across our supply chain businesses where there have been really strong performers and a few underperformers as well.

“We have seen a very strong performance out of the commodity environment north of South Africa and as well as South Africa. That certainly has driven some glitter in the results.

“We have also had a decent result from our fast-food distribution type business as well and a strong performance from Fleet Africa in South Africa as well as the dealerships, particularly in the UK,” he said.

Mountford said Fleet Africa, despite the depressed full maintenance leasing tender environment, was well positioned in terms of its broad-based black economic empowerment (BBBEE) credentials but the ongoing impact of corruption in the public sector and state-owned enterprises being under severe financial strain were concerns faced by this business.

“However, this business is aspirational of growth in an anti-corruptive environment,” he said.

Mountford said the main threat to the dealerships UK business was the uncertainty surrounding a possible economic downturn in the near future as a result of Brexit.

He said the downturn in the UK economy could also see a further shift away from new to used vehicle sales without a Brexit deal.

But Mountford did not think it was the “doomsday” that people were spelling out although it would result in complications and was “not an ideal outcome”.

Mountford stressed that despite the lack of business confidence in South Africa and slowing global economic growth, together with the myriad of regulatory changes faced by the majority of Super Group's offshore businesses, a reasonable financial performance was expected for the remainder of the year.

This was mainly on the back of a continuing strong African commodities environment and new business in the South African consumer-facing businesses, he said.

BUSINESS REPORT