Super Group, one of the leading transport logistics and mobility groups headquartered in South Africa, reported a good set of results despite challenging economic and trading conditions for the year ended 30 June 2015. Peter Mountford, Chief Executive Officer of Super Group, commented that the results reflected good performances from most businesses with the only significant disappointment being the African Logistics operations.
Financial highlights for the year ended 30 June 2015
During the year Super Group bedded down the acquisition of the 75% interest in Phola Coaches, effective 1 July 2014, and the acquisition of 100% of Allen Ford (UK), a franchised UK Ford and Kia motor dealership group, effective 1 December 2014.
The revenue for the Group increased by 38.6% to R19,8 billion and operating profit by 11.6% to R1,5 billion as a result of the solid performance by Supply Chain South Africa, both Fleet Solutions businesses, Dealerships SA and the inclusion of Allen Ford (UK) for the seven months to June 2015. The Group operating profit margin declined to 7.6% as a result of the acquisition of Allen Ford (UK) and the poor performance by the African Logistics business.
Basic earnings per share (EPS) and HEPS for the year under review increased by 8.5% to 270,4 cents and 9.0% to 271,1 cents, respectively. Core HEPS increased by 11.2% to 289,1 cents on the basis that the Broad-Based Black Economic Empowerment (B-BBEE) scheme, amortisation of intangibles and acquisition costs amounting to 18,0 cents per share are excluded from HEPS. No dividend was declared by the Group for the year to 30 June 2015.The net asset value per share increased by 16.9% to 1 680,5 cents at 30 June 2015.
Colin Brown, Chief Financial Officer of the Group, noted that as a result of the corporate actions undertaken by Super Group during the year, the Group’s total net borrowings as at 30 June 2015 increased to R995 million, resulting in a total gearing ratio of 16.8%. The Group’s Return on Net Operating Assets (RNOA), after tax, was 16.7% and if the effects of the acquisitions and disposals are excluded, the normalised RNOA is 18.1%.
The Group’s cash flow position remained strong and reported that operating cash flow increased by 5.9% for the year to R2 123 million with a working capital outflow of R102 million.
“Subsequent to year end, we were pleased to announce the acquisition of a 75% interest in IN tIME, a German-based logistics company that provides time-critical delivery services across Europe, for a purchase consideration of €79.2 million (approximately R1,1 billion). We will fund this acquisition using cash on hand as well as undertaking a fully underwritten Rights Offer of approximately R900 million,” said Mountford. He continued to say that the rationale for entering into this transaction is because the IN tIME business is an excellent fit and falls directly within the core strategy to expand the Group’s Supply Chain activities in industry niches where they have extensive experience such as the automotive and industrial parts industries. The acquisition further expands Super Group’s geographical footprint and gives the Group access to the state-of-the-art proprietary dispatching software developed by IN tIME.
Mr Neill Davies, a Non-Executive Director of Super Group since November 2009, retired from the Board effective 30 June 2015 and the Board appointed Ms Mariam Cassim with effect from 1 July 2015.
“We are expecting the South African economy to remain under severe pressure over the short to medium term with an increase in operational challenges, including among others increased competition and cost increases. Our strategy remains in place and we remain committed to deliver real growth in earnings over the medium to long term and enhance shareholder value;” Mountford concluded.