Motus lowers revenue guidance for year to end-June
Motus Holdings, the automotive group that Imperial Holdings unbundled on to the JSE in late 2018, says while it previously expected to grow revenue in the year to end-June, sales will probably be flat because of the tough operating environment.
The company said in an update to shareholders on Wednesday it expected to “maintain revenue” in the year, with “challenging economic trading conditions” expected to remain over the medium term in all its markets.
Motus said it expected to maintain operating profit, improve working capital efficiency, reduce debt, and to grow normalised headline earnings per share in the financial year.
The company’s shares, which have traded sideways since listing, were 0.4% down at R83.95 on Wednesday morning.
“The South African and global economic and political environments have been unsettled during the period,” Motus said.
Pressures on disposable income in SA had weighed on consumer spending, with consumers shifting to affordable vehicles from premium brand vehicles.
“Worldwide, the automotive industry is facing considerable change, with major disruptive trends likely to change the way vehicles are purchased, used and maintained in the medium to long term.”
The company’s business in the UK had been affected by political uncertainty arising from Brexit, though the DAF commercial and the Pentagon passenger dealerships remained profitable.
“The Mercedes commercial dealerships have been negatively impacted due to the once-off restructuring of the business, carbon emission issues resulting in a lack of inventory availability, lower truck and van sales resulting in a reduction of variable margin earned,” Motus said.
The company said it planned to boost organic growth through “optimisation and innovation” and bolt-on international acquisitions.