Motus dips after revving up headline earnings

MOTUS Holdings fell more than 5 percent on the JSE yesterday, despite the group reporting a resilient 9 percent rise in headline earnings per share to 517 cents for the six months to end December.

Its shares later recovered to close 1.29 percent lower at R77.

Chief executive Osman Arbeen said in an interview that the potential impact of a global spreading of the coronavirus on the automotive industry, locally and abroad, was unknown at this stage.

Arbeen said, however, car sales in China slipped 92 percent in January, due to the longer New Year holiday and the virus in that country, and the car industry was already likely to slow down in China this year, he said.

“These and other factors could adversely impact the local and global economies in the short term. Due to the weak consumer environment that appears to be deteriorating, we are cautious about expectations for the medium term. Despite this, we (aim to) deliver stable financial results for the year to June 2020,” he said,

Revenue increased 7 percent in the interim period to R41.95 billion, while operating profit was stable at R1.8bn, Cash generation was strong at R1.12bn from R382 million in the same period a year before. The interim dividend was held at 240c per share,

Arbeen said the group had made good progress on its strategy and operational targets. Motus’ sales of new and pre-owned vehicles outperformed the market.

He said they were working to reduce vehicle stock levels by June 2020 – a build-up that had occurred due to new models being introduced to the local market and the taking on of additional after-market stock.

Revenue in the retail and rental and after-market parts segments grew 7 percent and 5 percent respectively.

Higher vehicle unit volumes of 2 percent, resulting from increased preowned vehicle sales, higher revenue from the rendering of services, higher selling prices and the acquisitions of Ford and DAF dealerships (UK) boosted revenue.

The South African operations contributed 67 percent to revenue and 93 percent to operating profit. Operating expenses fell 6 percent via cost containment and a reduction in operating lease charges.

The Import and Distribution segment increased revenue 4 percent and operating income 11 percent due to price and volume increases of 7 percent.

On December 31, market share in this segment stood at 15.2 percent.

The retail and rental segment revenue improved 7 percent despite the declines in markets in South Africa, UK and Australia.

Locally, the segment represents 22 original equipment manufacturers and 321 dealerships.