JSE-listed mobility solutions company Super Group successfully navigated a challenging economic climate and political uncertainties during the six months ended December 31, 2018, reporting a 13% increase in operating profit to R1.29-billion, compared with R1.14-billion for the six months ended December 31, 2017.
This resulted in the group’s operating profit margin improving from 6.4% to 6.7%.
Earnings a share were up by 15% year-on-year to 176c, while headline earnings a share increased by 12% year-on-year to 174c.
The company declared no dividend for the reporting period.
Super Group attributed its solid results to an ongoing strong performance by the commodities businesses within Supply Chain Africa, as well as its Digistics business on the back of various new Quick Service Restaurant contracts.
Group revenue increased by 8.2% to R19.4-billion, compared with R18-billion in the prior corresponding period, owing to significant volume increases in the Supply Chain Africa’s commodities business, SG Coal, Legend and African Logistics, as well as its QSR logistics business, Digistics.
“The mining commodity industry in Africa experienced another exceptional period with good volume growth. However, with the exception of Digistics, the consumer businesses within Supply Chain Africa were adversely impacted on by the low growth in the South African economy.
“Additionally, Supply Chain Europe’s business was severely impacted on by the requirement for European original-equipment manufacturers to submit all their vehicles to the Worldwide Harmonised Light Vehicle Test Procedure, from September 2018, as a consequence of the knock-on effect of the historic diesel controversies and the implementation of the Diesel Euro 6 Emissions Standard,” the company explained.
Fleet Africa performed well on the back of increased ad hoc volumes on existing contracts. SG Fleet, however, delivered a disappointing set of results, owing to a lacklustre novated lease market, as a result of the decline in new-vehicle sales.
Dealerships SA outperformed the National Association of Automobile Manufacturers of South Africa’s statistics.
The new Mercedes-Benz agency model had a significant impact on sales across South Africa, coupled with the overall decline in luxury vehicle sales.
Dealerships UK's Ford and Kia dealerships gained market share despite the uncertainty around Brexit and the overall decline in new vehicle sales in the UK.
Super Group expects Supply Chain Africa to continue benefitting from the positive commodity cycle in 2019, while the consumer-facing and other supply chain businesses will remain under severe pressure as a result of declining consumer spending and the prevailing uncertain political environment leading up to the South African national elections in May.