MOTUS Holdings said its revenue was expected to increase by single digits for the 12 months to June 2024, but headline earnings per share would likely decrease, compared to the prior year, in a tough local vehicle sales market.
South Africa’s biggest automotive sales and distribution group said in a trading statement yesterday that a review of the year’s results showed that they expect that earnings before interest, taxation, depreciation and amortisation (Ebitda) would remain in line with the prior year.
However, headline earnings per share were expected to decrease by between 25% and 35% to between 1 330 cents and 1 535c per share compared with 2 046c per share last year.
Earnings a share was expected to be between 1 305c and 1505c a share, or 25% to 35% lower from the 2 008c per share at the same time last year. Nevertheless, the group’s management expected that a dividend would be paid in October this year.
Motus directors said consumers were experiencing considerable strain on their disposable incomes due to the challenging trading environment, marked by the uncertainty that was created by the elections, high interest rates, fuel prices and energy costs.
In addition, higher-than-normal vehicle and parts price inflation, exacerbated by the impact of the weak rand, had also negatively impacted affordability.
They said the oversupply of vehicles from the Original Equipment Manufacturers (OEMs) was moderating. However, additional “discounts” which were continuing to generate vehicle sales were impacting margins negatively.
Motus’s business segments that were more significantly affected by declining consumer spending were being supported by strategies of international expansion and diversification.
Net debt was decreasing due to declining inventory levels since July 2023, and declining levels of vehicles for hire, compared to December 2023, due to reduced seasonal demand.
The group said it remained well within bank covenant levels with more than sufficient banking facilities.
Long-term priorities remained unchanged and were focused on ensuring that Motus was the leading automotive group in South Africa, with a select international presence in the UK and Australia, and a limited presence in Asia and Southern and East Africa, directors said.
“We are confident that our diversified integrated business model, implementation of existing strategic initiatives and the experienced management team, will successfully navigate the group during these difficult times,” they said.
The annual results were expected to be published on September 3, 2024. Motus’s share price traded 0.6% higher at R85.29 yesterday around midday, on the JSE, with the price 11% lower over a year.
In April, the group announced the retirement of its CEO since 2017 Osman Arbee, with effect from October 3, 2024, while the chief financial officer (CFO), Ockert Janse van Rensburg, had been appointed as CEO from November 1, 2024.
Yesterday, Motus said Brenda Baijnath had been appointed as CFO-designate with effect from September 1, 2024, and as the CFO from November 1, 2024.
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