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Super Group expects more profit outside SA

Aug 30 2016

Listed transport logistics and mobility company Super Group expects the operating profit contribution of its non-South African businesses to head towards 70 percent from the 60 percent level achieved in the financial year to June.

However, Peter Mountford, the chief executive of Super Group, stressed yesterday that the growth in the group’s non-South African operating profit would not be the result of a strategic target set by the group, but the result of the annualisation of deals done in the past year.

“It is not a strategic goal to get to any percentage of non-South African operating profit and it’s not because we are not focused on South Africa, which remains core and important to the group,” he said.

Super Group’s results for the year to June include the financial results of SG IN tIME’s, the group’s European supply chain business, for eight months and novated and vehicle procurement specialist NLC in Australia for seven months.

Further growth

The inclusion of these two acquisitions from the current financial year, together with the acquisition post year-end by Australian-based SG Fleet of UK-based Fleet Hire effective from this month, was expected to further grow the group’s non-South African operating profit.

In South Africa, the group’s acquisition of nine Western Cape vehicle dealerships for about R490 million together with a strategic property for R200m from Sandown Motors, a subsidiary of Mercedes-Benz South Africa, was expected to be effective from September.

Mountford said the only potential acquisition by the group at this time was a small bolt-on in the group’s European logistics business, while the expansion of its fleet lease business into Kenya and Tanzania was expected to materialise over the next 12 months.

“We have been working on some opportunities in Kenya and Tanzania and have entered into agreements with our financial institution partners and should be able to get pilot projects off the ground in the next 12 months,” he said.

Super Group reported yesterday a 10.4 percent growth in headline earnings a share to 292.6c in the year to June from 265c in the previous year.

Revenue increased by almost 31 percent to R25.9bn from R19.8bn. Operating profit improved by 30 percent to R1.95bn from R1.5bn. Cash generated from operations increased by 43.4 percent to R2.9bn from R2bn.

A dividend was not declared.

Mountford said the group managed to expand its international footprint substantially with the various offshore acquisitions concluded over the past two years and at year-end, the non-South African businesses contributed 42 percent of group revenue and 60 percent of group operating profit.

Super Group rose 1.37 percent on the JSE yesterday to close at R40.77.

Source: Business Report – IOL