Motus Holdings reports significant turnaround in second half performance

Motus Holdings saw a significant turnaround in the second half of its financial year, with better sales, profit margin recovery, and improved operational efficiencies, following focused management actions after a muted first half.

Trading for the automotive group in the first half had been marked by economic uncertainty across the group’s operating regions, high interest rates, and intensified competition.

The results appeared to be favourably received by investors, as the share price rose 3.87% to R108.43 on the JSE Tuesday morning, at a time when the JSE All-Share Index was down 0.53%.

“As we continue to navigate the structural shifts in the automotive industry, our strategies, underpinned by our operational agility, mitigate against cyclicality and position Motus well for sustainable, profitable growth,” said CEO Ockert Janse van Rensburg.

The non-vehicle contribution to earnings before interest, tax, depreciation, and amortisation (EBITDA) came to 55%, exceeding its 50% target for the year to June 30, as the group successfully focused on better income diversification.

Thirty-five percent of EBITDA was generated from outside South Africa, reflecting the growing contribution of the group’s operations in the UK, Australia, Asia, and other African markets.

The group maintained market share, selling one in five new passenger vehicles in South Africa.

Debt was cut by R4.2 billion, cash flows improved, and headline earnings a share increased by 5%. This occurred while revenue was 1% lower at R112.6bn (R113.76bn). Operating profit of R5.48bn was in line with the prior year’s R5.5bn. Net finance costs fell by 13% to R1.91bn.

The total dividend per share increased by 6% to 550 cents. Net asset value increased by 11% to 11 305 cents a share. Cash flows from operating activities increased by 60% to R5.67bn.

During the year, Motus disposed of the Mercedes-Benz Truck and Van division (MTV) in the UK Retail business. This sharpened the focus on growing the DAF business. The R441m proceeds were used to repay debt, against net assets of R542m, resulting in a loss of R116m.

The R2.9bn reduction in contributions from the Retail and Rental segment was mitigated by higher contributions from: Import and Distribution up R2.8bn (14%); Aftermarket Parts up R885m (6%); and Mobility Solutions up R83m (3%).

The reduced revenue was mainly due to reduced contributions from new vehicle sales of R3.3bn (6%), primarily in international operations. This was offset by increased contributions from pre-owned vehicle sales of R1.5bn (6%), parts and other goods sold of R350m (1%), rendering of services of R255m (2%), and insurance revenue of R11m (3%).

The group’s passenger and commercial vehicle businesses, including the UK and Australia, sold 206 010 vehicle units (2024: 202 623), comprising 115 910 new units (115 899) and 90100 pre-owned units (86,724) during the year.

The South Africa operations contributed 56% to revenue and 65% to EBITDA, with the remainder being contributed by the UK, Australia, and Asia.

The marginally lower operating profit was mainly due to margin pressure, strong competition, and reduced demand experienced by the Importer business and the International Retail businesses.

The SA Retail division’s revenue and operating profit increased by 3% and 1%, respectively. The business was negatively impacted by reduced consumer disposable income, the buying-down trend, competition, and the shift in the market between new and pre-owned.

The Vehicle Rental division saw revenue and operating profit increasing by 6%.

In the UK, the disposal of MTV resulted in reduced revenue. Revenue and operating profit decreased by 13% and 20%, respectively, at the UK level. Excluding MTV, revenue and operating profit decreased by 8% and 14% for the year, respectively.

In Australia Retail, revenue and operating profit decreased by 3% and 9%, respectively. This was a result of foreign currency translations. When measured in Australia dollars, revenue increased 1%.

Motus anticipated an improved financial performance to December 31, 2025.