Super Group signs Kenya deal as profit swells 8%
Super Group had secured its first entry into East Africa through a new contract signed with the Kenyan government, the company said at its financial results presentation for the year to June on Monday.
CEO Peter Mountford said the group would provide vehicles to its clients, with potential for related contracts.
The group reported an 8% growth in operating profit to R2.1bn for the year, while core headline earnings per share grew 8% to 332c.
Revenue was up 15% to R29.9bn, lifted by acquisitions and the turnaround of the SG Coal business.
Apart from sub-Saharan Africa, the logistics group operates in UK, Australia and Europe. It continued to increase its geographical footprint with five strategic acquisitions during the year under review.
Super Group’s non-South African businesses contributed 40% of its revenue over the period and 61% of profit before interest earnings.
However, Super Group did warn that difficult trading conditions in its Dealerships SA business would continue. The recent interest rate cut was not expected to make a big difference, it said.
The South African dealership business increased its revenue 36.7% to R9bn.
While the group would intensify its offshore growth, it would focus on increasing its market share in SA. Its UK business was expecting a slowdown in growth in the new-vehicle market given the uncertainty around Brexit and the speculation regarding changes in government policies.
An analyst, who spoke on condition of anonymity, said that while the overall performance was satisfactory, it was disappointing that it had lost a contract with the City of Joburg. “It was a little bit unexpected.”
The local logistics environment was highly competitive and there was pricing pressure from clients, the analyst said.
Super Group’s share price on the JSE was down almost 3%, to close at R39.40.