Super Group, the logistics and mobility solutions group, is well positioned to deliver a strong performance in its 2023 financial year, CEO Peter Mountford said yesterday.
The release of strong results for the year to June 30, 2022, despite challenging markets in Southern Africa, Europe, UK and Australasia, seemed to be reflected in the share price, which soared 8.47 percent by early yesterday afternoon to R30.23.
Mountford said they would continue to be affected by weak economic growth and challenging trading conditions, regardless of the countries or industries in which they operate.
Strict expense and cash management would be critical to mitigate lower volumes, reduced rates and smaller margins, and the group would maintain a conservative and robust financial position,” chief financial officer Colin Brown said yesterday.
Market share gains would be pursued to offset volume losses by introducing new brands and product lines – as well as expanding into new markets. The strategy to acquire businesses to complement and expand the group’s offerings also remained in place, said Brown.
Super Group’s headline earnings increased 33.4 percent to R4.76 billion in the year to June 30, after revenue increased by 17 percent to R46.24bn.
Group revenue and normalised operating profit before capital items contributions from non-South African businesses were 51 percent and 53 percent respectively.
“Super Group resiliently weathered the global shock waves of events such as the war in the Ukraine, global logistics and supply chain disruptions and extreme weather,” said Mountford.
Ebitda (earnings before interest tax depreciation and amortisation) increased 69.8 percent to R7.03bn. Gearing, after IFRS 16 and securitisation’s, was 21.1 percent, Brown said in a telephone interview.
The trading environment for the South African supply chain businesses was expected to remain tough, with consumer spend under pressure from soaring inflation and unemployment.
Many clients would continue to face product supply shortages and logistics issues. New business opportunities and improved volumes in the hospitality, entertainment and tourism sectors should help position these businesses for reasonable growth in the year ahead.
Although marginal improvements were being realised, cross-border trade would continue to be plagued by border delays. In the commodity sector, new export markets were being explored, and the diversification of mineral sectors leveraged.
The European supply chain businesses would continue to weather the impacts of the war in Ukraine and the semiconductor shortage, with the division also focusing on industry diversification and cost management.
With constrained consumer spending and vehicle shortages, the South African dealership market was expected to remain challenging.
As the supply of new vehicles improved, pent-up demand might help offset the impact of rising interest rates, but limited production and low inventories were likely to persist in the short term due to supply chain issues and semiconductor shortages.
A focus on high-growth volume brands would help the business mitigate the impact of low stock levels in the premium segment.
In the UK, strong margins and higher average retail prices would offset the impact of the semiconductor crisis on new vehicle stock supply, but trading conditions would remain challenging.
SG Fleet continues to benefit from growth in demand. The business’ performance in the year ahead would be bolstered by new business wins, strong retention rates and the realisation of the synergies inherent in the LeasePlan acquisition.
Fleet Africa was expected to benefit from increased activity on existing contracts, and it was hoped that some progress would be made in the issue and award of parastatal lease portfolio tenders.
BUSINESS REPORT