Global logistics and mobility solutions provider Super Group said headline earnings a share are expected to decline between 29.9% and 19.7% in the six months to December 31 and gearing is expected to fall with sale of its Australian business.
The JSE-listed company is finalising its interim results, and it anticipates revenue from continuing operations to decline by between -12.5% and -2.3% to between R22.4 billion and R25bn.
Operating profit is expected to drop between -21.8% and -11.8% to between R860m and R970m.
The Supply Chain Africa consumer businesses performed “adequately” despite constrained demand as high interest rates and rising living costs continue to negatively impact demand in the fast-moving consumer goods sector.
The industrial and commodity transport business's were negatively impacted by significantly lower coal export volumes, border delays and slow turnaround times at South African ports.
Coal export volumes fell through Maputo in the final quarter of the calendar year due to political unrest in that country.
The coal logistics operations were able to mitigate some of this impact locally, Super Group directors said. Copper exports to China and the Middle East continue to be rerouted from Durban to Dar es Salaam and Walvis Bay.
“The expectation remains that some copper exports will revert to Durban over the second half of this financial year,” the group said.
The Fleet Africa division performed well despite the lack of parastatal tender activity and it was able to sustain ad hoc rental volumes and optimise operational costs.
The South African Dealerships business performed well in an environment where the 2024 dealer vehicle sales declined by 3.7%.
The entry of new Chinese manufactured vehicle brands negatively affected the market share of traditional and legacy vehicle brands and also had an impact on later model pre-owned and demo vehicle sales and margins.
The group however became more represented within these new product ranges. Used vehicle sales and aftermarket activity levels remained resilient.
The Dealerships UK business produced poor results, driven largely by lower Ford new vehicle sales, and the negative effect of the Vehicle Emissions Testing and Standards (VETS) legislation on margins on combustible fuel and new energy vehicle sales.
“Ford remains under significant pressure, with its overall passenger market share declining to 5.8% from a historically market-leading position... the Ford commercial market share remains stable.”
The group said it would likely rationalise and consolidate its dealership footprint in the UK because with an increase in the VETS threshold for 2025 to 28%, the current position of the company would likely persist.
“This will include a review of cost structures and investment plans to ensure the business is correctly positioned to deal with what is effectively a significant structural change in the UK dealership business and car market,” the group said.
SG Fleet and inTime have been classified as assets held for sale from October 1, 2024, and December 1, 2024, respectively.
The pending sale of Australia-based SG Fleet was expected to reduce gearing from 221% to 24.1%,. A R16.30 return of investment to shareholders in the form of a dividend was contemplated.
The Supply Chain Europe division's performance was affected by a sharp decline in European automotive parts distribution volumes and a significant erosion of gross margins due to poor vehicle manufacturing volumes across Germany.
The group said its financial position remained strong with net debt to equity levels and headroom on covenants remaining at healthy levels.
BUSINESS REPORT