Supergroup

17/08/2011

Business Day: Three Super Group divisions excel

Super Group , a global logistics and supply chain management group, said the results it released yesterday for the year ended June were "satisfactory", despite a difficult trading environment.

The company, which conducts business in the UK, Australia, New Zealand and numerous African countries, says improved operating efficiencies and cost containment significantly helped operating margins.

"We are very happy with the way (the results) came out. All three operating divisions did well," CEO Peter Mountford said yesterday. He said the group had seen good cash generation this year and last.

Headline earnings from continuing operations shot up 114% to R339m, with cash generated from operations up 18% to R1,2bn.

Operating profit rose 25% to R612m, mainly as a result of new business in supply chain operations and a 25% increase in new vehicle sales within its dealerships, both in SA and Australia.

It also repaid all term loans in the past year, reducing total gearing to 27%, from 54% previously.

The primary emphasis remains on organic growth and strategic acquisitions, with Super Group having added liquid and dry bulk transport capacity to its business, along with the distribution of pharmaceuticals.

The group also said it focused on cash generation and managing working capital, which saw net cash retention for the year of R672m, despite spending R245m on property, plant and equipment. It mainly attributes the improvement in operating margins — to 7,8%, from 7% a year earlier — to the return to profit of its African logistics operations and the sound performances of its fleet and dealership divisions.

However, it said overall growth in the supply chain sector was moderated by a disappointing result in its Sherwood International business.

Sherwood’s operational profitability fell significantly as a result of lower margins on a number of core beverage procurement contracts. The business was also hit by a fall in agricultural and mining equipment capital expenditure in sub-Saharan Africa, including Mali, Senegal, the Democratic Republic of Congo and Zambia.

Source: Business Day