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Super Group posts revenue, earnings increase

Feb 12 2014

​Transport logistics and mobility company Super Group on Monday reported a 30% jump in adjusted headline earnings per share to 126c for its six months to last December, on top of strong earnings increases in the past few interim periods.

CEO Peter Mountford said the group’s African Logistics division, which benefited from its fleet diversification, and Supply Chain SA division were Super Group’s growth drivers in the period.

Supply Chain SA “did very well” largely thanks to new contracts and the contribution of a recent acquisition, while African Logistics saw a 59.7% rise in revenue, although off a low base.

Super Group’s revenue for the period grew 31.5% to R7.14bn.

However, Mr Mountford said SG Fleet underperformed mainly due to the fall in vehicle-leasing as a result of the uncertainty created by the previous government of Australia from July 2013, relating to potential Fringe Benefit Tax amendments.

Last month, Super Group said SG Fleet was proposing to list on the Australian Securities Exchange.

Mr Mountford said Super Group would “marginally increase our controlling interest to approximately 50.7% in the listed entity”.

Super Group’s total gearing at the end of the period rose to 5% from 3.7% at the start of the period.

Four and a half years ago, when the new management team took over, Super Group’s gearing was around 650%.

Mr Mountford said management had since worked hard to be cash generative and reduce gearing. “Our gearing levels at 5% are low but there’s a lot of pipeline business in various operations — Supply Chain SA, the Fleet Africa leasing businesses and the like — so we are not concerned about it.”

The company intended keeping gearing below 40%, he said.

Super Group increased its total assets by 12.9% to R11.9bn during the period, mainly as a result of capital expenditure of R461m.

Mr Mountford said capital was spent on vehicle purchases in SG Freight, Super Rent and the African Logistics operations, and completing the new warehouses at Super Park.

He said South Africa was “experiencing a lot of headwinds” and conditions were tough with fuel price hikes, consumers under pressure and toll roads. However, the group was “cautiously optimistic going into the second half”.

During the period, the company repurchased 2.1-million of its shares, totalling 0.7% of the issued share capital, at an average share price of R24.38. The total consideration relating to these repurchases was about R53m.

“We believe there are opportunities to expand our core businesses and with the domestic medium term note programme listed at the end of October 2013, it will allow the group to diversify its sources of funding, optimise borrowing costs and facilitate its growth strategy,” he said.

Source: Business Day