There was less shareholder cheer for Motus Holdings on the JSE after the company’s stock shed more than 4% off its share price in yesterday’s trade session in the aftermath of subdued attributable profits and headline earnings per share for the full year period to the end of June.
The company’s share price hit a low of R101 on the JSE after opening at R106.
Motus paid a final dividend of 410 cents per ordinary share although it stated that there was “no assurance that a dividend will be paid” in respect of any other financial year.
“Any future dividends will be dependent upon the consolidated operating results, financial condition, investment strategy, capital requirements and other factors affecting the group,” the company said.
Despite a 16% upswing in revenues to R106.3 billion, full year attributable profits in the company were only marginally up by 2% at R3.3 billion. Headline earnings per share for the period went up by just 1% to 2046 cents.
The company described the full year period to June 2023 as a “challenging and evolving trading environment”. It described its financial performance as “resilient,” pivoted on “strong strategic and operational” delivery.
The automotive industry in which it operates across South African, Australian and UK markets, had started to absorb “inflationary pressures, rising interest rates and a heightened global cost-of-living” crisis, it said.
“The Group has responded well, supported by cost containment, resilient demand, supply chain normalisation and continued funding by the banks,” Motus said as it presented its financials for the period.
In South Africa, both automotive import and retail businesses had been “positively impacted by the higher margins achieved due to the stock shortages in new and pre-owned vehicles in the first half” of the period under review.
However, this had been achieved against the backdrop of lower volumes as Motus on maximising profitability from available stock.
Its aftermarket parts and spares business in South Africa had top performed although the segment suffered from headwinds that included loss of trading due to high levels of load shedding.
Recovery in the South African vehicle rental market has seen Motus’ trading business in this category notch up operational recovery to about 80% of its pre-Covid volumes.
“Our vehicle rental business recovery is in line with the rest of the industry and delivered strong results in this financial year with a stellar performance from the international and corporate channels.
With the UK economy continuing to face headwinds arising out of inflation, high interest rates and personal taxes that are putting consumer spending under pressure, new vehicle production for Motus in that market “steadily improved” throughout the financial year under review.
Although the UK vehicle market grew, its retail volumes for the passenger vehicles were negatively impacted by logistical difficulties.
Motus’ Australian market’s performance exceeded the prior financial year due to increased supply and the fulfilment of long-standing orders. Shipping delays at the Australian ports are however, still ongoing although the supply of vehicles has started to normalise.
“Consumer spending is under pressure with an increase in inflation and interest rates. The improved performance was supported by high margins achieved on the new vehicle back orders and improved pre-owned vehicle sales volumes despite these headwinds,” it said of the Australian operation.
BUSINESS REPORT