Motus has reported higher profits, cash generation and dividends after a surge in South African vehicle sales, highlighting how improving consumer demand and lower interest rates have strengthened the automotive sector and boosted shareholder returns.
The automotive group said on Tuesday attributable profit rose 20% to R1.35bn in the six months to end-December, while cash generated from operations jumped more than tenfold to R1.94bn.
The company lifted its interim shareholder payout by 25% to 300c per share, a sign of confidence in earnings growth and strengthening cash flows.
The country’s biggest automotive group benefited from a strong rebound in vehicle sales as lower borrowing costs and easing inflation supported consumer demand. New vehicle sales in South Africa increased by 13% to 49,360 units during the period, helping lift overall group vehicle sales to 111,911 units, it said.
Revenue rose 3% to R57.7bn, while operating profit increased 8% to R2.74bn. Headline earnings per share rose 19% to 807c per share while net finance costs fell 23% as debt declined and interest rates eased.
Motus said improved cash generation and disciplined working capital management supported dividend growth and share buybacks, with R476m returned to shareholders through repurchases during the period
Motus said South Africa remained the key driver of performance, contributing 60% of revenue and 67% of earnings before interest, tax, depreciation and amortisation (ebitda).
The local automotive market recovered strongly, with national new vehicle sales rising nearly 18% during the six-month period, supported by pent-up demand, improved affordability and an influx of more competitively priced vehicle brands, it said.
Motus strengthened its balance sheet as strong cash flows enabled it to reduce debt and improve financial flexibility. Its net debt to ebitda ratio improved to 1.5 times from 2.1 times, well below covenant limits.
The group’s import and distribution division posted the strongest growth, with operating profit surging 66%, while its retail, rental, aftermarket parts and mobility solutions divisions all reported improved profitability.
Motus said improved cash generation and disciplined working capital management supported dividend growth and share buybacks, with R476m returned to shareholders through repurchases during the period.
The group expects full-year earnings to grow by double digits, boosted by sustained vehicle demand, lower interest costs and continued operational discipline.
Business Day
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