Automotive News South Africa

Super Group 'delivers' its own set of excellent results

Super Group‚ an industrial transportation operator‚ says it delivered "an excellent set of results" for the year to June‚ with earnings growth resulting from its integrated logistics plan.
Super Group's Peter Mountford says that while the group results were in line with expectations, margin pressures and "extremely challenging" business conditions. Image:
Super Group's Peter Mountford says that while the group results were in line with expectations, margin pressures and "extremely challenging" business conditions. Image: RMI

The results were achieved despite "highly challenging" market conditions and inflationary pressures experienced in southern Africa and Australasia‚ the group said.

Revenue rose 22%‚ mainly on new contracts secured in the Supply Chain South Africa businesses‚ a strong performance in the African logistics cluster and better sales in the vehicle dealerships unit.

"We are expecting trading conditions in the South African economy to remain challenging over the short to medium term‚" Chief Executive Peter Mountford said.

"We are also anticipating an increase in competitive pricing pressures across all sectors and will continue focusing on driving cost efficiencies throughout the group," he said.

Operating profit increased by 18.6% to R1.34bn. This was driven by operational efficiencies and cost controls in each of the businesses‚ as well as new contracts.

Expansion but margins remain under pressure

But margin pressure - with the exception of its dealerships division - was a result of competitive markets‚ especially in the second half of the financial year.

But Mountford said new clients in consumer goods and "quite good" commodities cargoes out of Zambia‚ the Democratic Republic of Congo and Zimbabwe through Durban harbour had boosted the group.

During the year Super Group undertook the listing of 52.5%-owned subsidiary SG Fleet Group on the Australian Securities Exchange.

Through its SG Convenience warehousing for fast-moving consumer goods business in South Africa it also bought R&H Liquor Distributors‚ a liquor distributor for restaurants and hotels.

The group also bought a 50.1% interest in the GWM South Africa (Great Wall Motors) distributorship and acquired two GWM dealerships. But it said that none of the acquisitions had a material effect on the annual results.

Super Group's return on net operating assets after tax was 18.6% for the year. The net debt position fell 42‚8% to R91m‚ with total gearing of 1.7%.

Operating cash flow shot up 39% for the year to R2bn with a working capital outflow of R90m compared to R286m last year‚ as a result of stringent working capital management. Meanwhile‚ cash generated from operations‚ after working capital‚ increased by 65.7% to R1.9bn.

Source: I-Net Bridge

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