Super Group warns of profit fall

The share price of transport and logistics company Super Group had its steepest fall in a week after the company said that its full-year profits would drop.

Group business operations were disrupted by the Covid-19 lockdowns. The share price fell 8.33% to close at R16.50, valuing the group at R6.13bn.

Super Group’s operations include courier services, vehicle rentals and car dealerships.

“The Covid-19 pandemic has resulted in the business environment becoming more demanding and uncertain, and it has created significant business disruptions in all geographies in which the group operates,” Super Group said.

With partial lockdowns in Australia, Germany, Spain and the UK, the impact on the group’s trading was “inherently negative”. Profit was hit by sharp drops in new-vehicle sales in SA and the UK during lockdowns in those countries.

Headline earnings per share (HEPS) for the 11 months to May 2020 were 48.9% below the prior period’s, the group said in a trading update.

MANAGEMENT IS FOCUSED ON OPERATIONAL DELIVERY IN A FLEXIBLE AND COST-EFFICIENT MANNER

Heps for the year to end-June were expected to be 50% lower than the prior period’s 373.6c.

Heps is a widely used profit measure in SA that strips out one-off items to give a better indication of the underlying performance of a business.

Revenue from operations of R31.4bn in the 11 months to end May was 11.9% less than for the previous matching period, the group said.

“In the short-term, management is focused on operational delivery in a flexible and costefficient manner, and within the parameters set by governments,” the group said.

The group said its major focus for the next six months would be on minimising the effect of restrictions imposed due to Covid-19, the retention of existing contracts and promoting new business solutions for new customers in the supply chain and fleet Africa operations in particular.

Super Group’s results for the financial year to June 2020 had been and would continue to be affected by Covid-19, weak macroeconomic conditions and business rationalisation in Europe and SA.