By Sfundo Parakozov
JOHANNESBURG (Reuters) -South Africa’s biggest vehicle dealership, Motus Holdings, on Tuesday reported a 28% slide in annual profit, sending its shares down.
Motus’ shares were down 5% at 1452GMT, after its headline earnings per share – the country’s main profit measure – declined to 14.79 rand ($0.8286) in the year to June 30, from 20.46 rand last year.
It blamed the profit drop on “higher-than-normal vehicle and parts price inflation, volatility in the local currency against major currencies and high interest rates.”
The company, which has operations in the UK, Australia and sub-Saharan Africa, said its South African market was the most affected by the slow down in demand.
Motus’ Chief Financial Officer Ockert Janse van Rensburg told Reuters the company’s geographical diversification had helped offset the impact of South Africa’s challenging environment.
“If it wasn’t for the diversified income streams, we would have struggled,” Janse van Rensburg, who takes over as CEO from the retiring Osman Arbee in October, said.
“South Africa went down 20% on operating profit, yet the international business went up 40% year on year, and that is the beauty of internationalisation and diversification that we were beating the drum for,” he added.
South Africa’s new vehicle sales fell 4.9% year-on-year to 43,588 units in August, the country’s motor industry body Naamsa said on Monday.
“People panic when they see the Naamsa numbers and I’m saying don’t panic, because there is a big part of our business that’s not dependent on those Naamsa numbers,” Arbee said.
Motus, which was unbundled from Imperial Holdings and listed separately in 2018, declared a final dividend of 285 cents per share.
Janse van Rensburg said the expected return of interest rate cuts would lift the business outlook in Motus’ local and international markets.
($1 = 17.8587 rand)
(Reporting by Sfundo Parakozov; Editing by Nqobile Dludla, Louise Heaven and Alistair Bell)
