Imported brands and acceleration of demand drives Motus profit increase

Motus, the retailer of the BMW, Mercedes-Benz and Volvo brands, expects a jump in headline earnings in its 2022 year as it increases its supply of fleet vehicles to car rental companies and demand for new vehicles rises.

Motus, whose liquidity has allowed the company to engage aggressively in strategic acquisitions, dividend distributions and share buybacks, told shareholders it anticipates headline earnings per share (Heps) to jump by 50%-60% to as much as 1,885c for the year ending in June, up from 1,179c for the year to June 2021.

This comes as the availability of vehicles and higher sales volumes improved Motus’s market share to 23.6% of the passenger vehicle market for the 12 months to 31 December 2021.

Motus said its imported brands have helped to increase its market share. 

“Earnings are increasing as a result of the increase in the supply of fleet vehicles to car rental companies, increased bank joint venture income and higher interest income,” Motus said in a statement.

“The liquidity position remains strong, supported by significant unutilised banking facilities and favourable foreign currency forward cover.”

Motus reported higher volume sales, favourable foreign exchange rates and improved sales through the dealer channel for 2022. Revenue was driven by improving sales to dealers, outright sales to car rental companies and increased selling prices.

As vehicle owners start returning to normal driving patterns, this has resulted in higher usage of vehicles, which has seen improved income for Motus workshops due to the higher use of service and maintenance plans.

In a trading statement on Thursday, the company said there was  a higher demand for new vehicles in the reporting period because of an erratic stock supply and it benefited from increased margins. 

The automotive sector has been grappling for almost two years with a global shortage of semiconductor chips which has hampered the availability of new vehicles for sale.

During the year, vehicle utilisation in the car rental business, which slumped during the hard Covid-19 lockdowns, rose to 72%.

Motus said the shortage of new vehicles saw the pre-owned vehicle market remain buoyant with demand strong in all parts of the country.

While global supply chain disruptions continue to affect the delivery of vehicles, panels and parts, Motus expects inventory supplies to normalise during the second half of the 2023 financial year.

The group, which recently acquired a 60% stake in technology and online pre-owned vehicle business Getworth, said it was fast-tracking its positioning in online vehicle buying, in warehousing and in selling in the pre-owned vehicle market.

The group’s annual financial results for the year ended June 30 2022 will be published on August 31.

Motus’s share price rose 3.57% to R113.19 by midday on Thursday.

gumedemi@businesslive.co.za