Super Group profits up

Super Group profits up

FMCG SUPPLIER NEWS

IOL Business - Feb 21st, 08:13

Despite the prevailing highly competitive economic and trading environment, JSE listed transport logistics and mobility group Super Group (SPG) posted a 63% increase in headline earnings to R244 million for the six months ended December 2011. 

This translated into diluted headline earnings per share of 79.2 cents versus 46.6 cents the previous comparable half-year.

Peter Mountford, Chief Executive Officer of Super Group, stated: “The results for the period under review could mainly be attributed to the satisfactory performance delivered by the Supply Chain South Africa business and the strong improvement in operating margins reflected by African Logistics. In addition, the Fleet Solutions business outperformed the Group's expectations, mainly as a result of a number of new contracts, favourable residual values, lower maintenance costs and stringent control of overheads. Dealerships continued to experience sales volume growth that exceeded industry statistics.”

Cash generation within the Group was exceptionally strong during the period and the Group was able to reduce net borrowings by R330 million, retain net cash, after working capital, of R767 million and acquire shares, by the company and the Super Group Share Incentive Scheme, for a total consideration of approximately R103 million.

Mountford added that Super Group managed to terminate its existing Bank Facility Agreements, as announced on SENS on 8 February 2012, and normalised funding arrangements were concluded in February 2012. Consolidated gearing is down to 15% (30 June 2011: 27%), which is well below the Group's targeted range of 30% to 40%.

Super Group increased revenue by 23% to R4.7 billion from R3.8 billion mainly as a result of new business generated in the Supply Chain South Africa and Fleet Solutions businesses as well as a 19% increase in new vehicle sales within the Dealership operations.

Operating profit increased by 36% to R405 million, reflecting a healthy operating margin of 8.7% (December 2010: 7.8%).

Mountford said that he believes the improved results were mainly due to the increased profitability of the African Logistics operations and the excellent performance in the Fleet Solutions Division.

Profit before taxation increased by an impressive 63% to R343 million, reflecting the benefits of improved operational profitability and lower finance costs.

The balance sheet of the Group remains robust and reflected a net asset value per share of 947 cents, an increase of 14% from the 832 cents at 30 June 2011.

“We are expecting the Southern African economy to remain pedestrian and competitive. Revenue growth rates are expected to be in line with general economic growth, other than where we generate new business or extend our product lines. We have identified and are considering a number of business opportunities that will be earnings-enhancing and value-accretive to the Group. The Eastern Cape Provincial Government contract expired at the end of January 2012 and despite this loss, we are expecting to generate earnings and headline earnings of at least R1.60 per share for the year ending 30 June 2012;” concluded Mountford. - I-Net Bridge