Motus Holdings demonstrates resilience with a 2% dividend increase and 3% growth in headline earnings, despite challenging market conditions. The automotive giant maintains a 20.3% market share in South Africa while adapting to shifting consumer preferences towards pre-owned vehicles.
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Automotive and mobility company, Motus Holdings, has raised its interim dividend by 2% to 240 cents per share for the six months ended 31 December 2024 compared to the previous year, with returns on invested capital decreasing to 10.7%.
Over the same period, Motus’ weighted average cost of capital also decelerated to 9.9% while its equity to net debt structure stood at 56%:44% compared to 52%:48% previously.
During the half year period under review, headline earnings per share in Motus grew 3% to 681 cents while attributable profit for the period went up marginally by 1% to R1.127 billion.
This came despite revenues over the half year period slumping R56.1bn, with earnings before interest, depreciation and amortisation falling by 4% R4bn. Cash flows from operating activities of R186 million for the half year compared top outflows of R230m a year earlier.
With data from the Automotive Business Council (Naamsa) showing that South Africa retailed 269 680 vehicles for the six months to 31 December 2024, Motus said it had a market share of 20.3% for the period.
South Africa’s passenger vehicles market grew by 9.2% during the half year although light commercial vehicles (LCVs) and heavy commercial vehicles (HCVs) markets contracted by 14.7% and 6.5%, respectively.
“Management’s forecast for new vehicle sales for the 2025 calendar year is between 525 000 to 540 000 vehicles, with Naamsa forecasting the new vehicle market to improve by single digits compared to the 2024 level,” said Motus.
It said consumer preferences in South Africa “have shifted towards pre-owned vehicles,” bolstering growth and competition in the market.
Interestingly, the vehicle rental industry had now surpassed pre-COVID revenue levels despite a price increases the company deemed essential “to offset inflationary pressures on vehicles” and other costs.
“The aftermarket parts sector is an essential and growing market, driven by an ageing and diverse vehicle parc with rising vehicle ownership, as well as extending replacement cycles. It remains a competitive landscape with a range of players from large distributors to informal sector suppliers, as well as online distributors,” explained Motus.
It nonetheless experienced a challenging first quarter on the back of a slow-down in the economies in which it operates, including Australia and the UK. There was, however, an improved performance for the second quarter which was supported by improved business confidence, lowering of interest rates and the introduction of the Two-Pot retirement system in South Africa.
The Two-Pot retirement system had resulted “in positive consumer sentiment, and increasing momentum” with new vehicle model launches.
“The Group’s performance in the second quarter showed a marked improvement compared to the first quarter, with a notable shift in operating profit and profit before tax contributions which were supported by a reduction in net finance costs enabled by a conscious effort to reduce inventory and net debt,” said Motus.
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