Super Group shares hit by lower earnings
Chief executive Peter Mountford said that the declines for the six months to December 31 were due to low economic growth in South Africa, political uncertainties in Europe and changes in product.
Super Group’s revenue fell 3percent to R18.86billion, mainly due to a decline in Dealerships UK’s revenue, which had been impacted by uncertainties due to an election and Brexit, said chief financial officer Colin Brown. Most divisions had experienced tough trading conditions.
Earnings before interest, tax and amortisation (Ebitda) decreased by 7.9percent to R1 28bn. This was due mainly to the underperformance of Supply Chain Africa’s commodities businesses, impairment of goodwill in Phola Coaches, and introduction by SG Fleet of a re-designed protected lease product. Operating profit fell 8.7percent to R1.18bn - the operating profit margin declined to 6.3percent from 6.7percent.
Supply Chain Africa’s results were hurt by margin pressure in its commodities businesses on the back of electricity generation and transmission problems in South Africa, and a sharp decline in commodity trading in sub-Saharan operations. Coal transport operations were particularly hard hit by rain in November and December, said Brown.
The decline in profitability was partly offset by inclusion of LiebenLogistics and GLS Supply Chain Equipment and a solid performance by Digistics. Three acquisitions were made in the interim period, two from the same parent in South Africa and a small company in Germany.
Supply Chain Europe performed poorly in Germany, due to a depressed car market, the result of production-related problems in the country,
In SG Fleet, despite growing revenue, business faced external pressures including the tough credit environment and poor new motor vehicle sales.
The company also changed its add-on insurance portfolio, which resulted in a conversion of upfront to annuity-based income, which reduced the current period’s profitability.
Fleet Africa ended the period in a strong position, having extended a major contract and secured a number of new full maintenance lease and managed maintenance contracts.
Headline earnings per share decreased 12.3percent to 152.5cents.
The net debt-to-equity ratio, excluding lease liabilities, increased to 30.1percent, compared to 24.1percent as at June 30, 2019. The net asset value per share increased marginally by 0.3percent from R30.37 at June 30, 2019, to R30.46 at December 31.
Cash generated increased by 37.9percent to R2.06bn.