Revenue growth for Super Group
Super Group says it had good revenue growth throughout the company in the six months to end-December 2017, pushing aside political uncertainty and adverse trading conditions in Africa, Europe and the UK.
Australian economic conditions were stable, with good growth in certain industries, the supply chain management company said. Meanwhile, the results reflected the benefits of geographical diversification. Non-South African businesses contributed 46% of revenue and 62% of operating profit in the period. Revenue shot up 27% to R18bn, operating profit jumped 11% to R1.1bn, while headline earnings per share were up 8%.
"It is not a perfect result by any means," CEO Peter Mountford said on Monday. "It was a ‘decent performance’ against consumer headwinds in SA."
Mountford said a stronger rand was good for the group’s big footprint in SA, providing cheaper inputs. However, a weaker rand strengthened the bottom line in earnings in currencies that included euro, pounds and dollars. But in the latest period, Super Group said overall exchange rate variances had an "immaterial impact" on earnings compared with the same period previously.
Revenue in the six months was pushed up mainly on the acquisition of the Slough Motor Corporation dealerships in the UK, the acquisition of an 88% interest in Spanish courier company Servicios Empresariales Ader and as a result of the inclusion of the Essex Auto Group in the UK and Western Cape vehicle dealerships.
SG Coal also put in an "excellent performance". The division transports primary minerals commodities to railheads.
The increase in net finance costs of 36% to R169m was attributable to the funding of acquisitions, as well as the funding of the working capital. Super Group’s net debt position at the end of December 2017 was R3.3bn, a gearing ratio of 31.6%.
In late 2017, the group had raised R500m through an accelerated book-build placement of shares at R40.25 a share that was oversubscribed.
Damon Buss, an analyst at Electus Fund Managers, said on Monday Super Group’s results were "relatively poor" compared with expectations.
"Key areas of disappointment" were Fleet Africa, where earnings before interest and tax had fallen more than expected and in the supply chain Europe division, where the margins of recently acquired courier firm Ader were "much weaker than expected". But the group’s dealership businesses did relatively well in tough environments.