Johannesburg - Super Group is making progress with its strategy to expand its international footprint to buffer the listed transport logistics and mobility company against the uncertain South African economy and emerging market turmoil.
The group, in the six months to December, acquired a 75 percent equity interest in German niche logistics service provider, IN tIME, and 100 percent of novated and vehicle procurement specialist NLC in Australia.
Read: Super Group bolsters profits
Peter Mountford, the chief executive, said yesterday that the group had been through a busy six months but the effort had paid off because it left the group in a stronger position.
Mountford said offshore revenue accounted for 37 percent of total group revenue in the six months to December and 52 percent of operating profit.
“We believe it is critical to diversify our revenue and earnings streams while expanding our offshore presence to ensure we have a buffer against the uncertain South African economy and emerging market tumult,” he said.
Super Group yesterday reported a 40 percent growth in revenue to R12.2 billion in the six months to December from R8.7bn in the previous corresponding period.
Operating profit
Mountford attributed this growth largely to the inclusion of Allen Ford UK, a franchised motor dealership group operating 13 franchised Ford Motor dealerships and two franchised Kia dealerships in the UK, for the full reporting period compared with only one month in the comparable period to December 2014.
Operating profit increased by 23.3 percent to R883 million from R716m.
Mountford said the main reason for operating profit increasing at a slower rate than revenue was the inclusion of Allen Ford UK for the full period at UK dealership margins, and the poor performance by SG Coal within the supply chain Africa division.
This translated into a 21.2 percent improvement in headline earnings a share to 159.2c from 131.4c.
No dividend was declared.
Mountford said the majority of the group’s businesses performed well, with the exception of SG Coal.
He attributed SG Coal’s poor performance to a substantial drop in deliveries to Eskom, poor commodity prices and overall volatile mining conditions, which were aggravated by labour disputes.
Core headline earnings a share increased by 10.8 percent to 158.5c from 143.1c.
Core headline earnings a share excluded the one-off foreign exchange profit of the IN tIME forward foreign exchange contract, the acquisition costs for both the IN tIME and NLC acquisitions, the amortisation of intangibles and broad-based black economic empowerment related costs.
The one-off forward foreign exchange gain of R101m related to the IN tIME acquisition and the rand weakening over the deal period, with the gain offset by related transaction costs of R55m.
Super Group’s net debt position at end-December increased to R2.76bn, with R1.24bn debt raised by SG Fleet to fund the NLC acquisition. The rights offer of R900m in October was used to fund the IN tIME acquisition and an accelerated bookbuild of R360m in December bolstered the group’s capital structure following the acquisition of NLC by SG Fleet.
Total gearing at end-December increased to 31.9 percent from 16.8 percent.
Mountford said the group would continue to explore interesting investment opportunities internationally and in South Africa to maintain its position as an innovative, integrated mobility solutions company.
Mountford said the outlook for the economy over the short to medium term remained subdued and reflective of extreme currency weakness, escalating interest rates and depressed consumer spending. But the Australian and European markets looked more resilient, he added.
Shares in Super Group were unchanged yesterday to close at R38.95 on the JSE.
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