09 Jun - 6 min read

Initial Trading Statement and Operational Update

Initial Trading Statement and Operational Update

Motus Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number: 2017/451730/06
Share code: MTH    ISIN: ZAE000261913
("Motus" or “the Company” or “Group")


INITIAL TRADING STATEMENT AND OPERATIONAL UPDATE


INITIAL TRADING STATEMENT

In terms of the Listings Requirements of JSE Limited, companies are required to publish a
trading statement as soon as they become reasonably certain that the financial results for
the period to be reported on will differ by more than 20% from that of the previous
corresponding period.

Accordingly, an initial review by management of the financial results for the year ending
30 June 2021 has indicated that:

                                      Projected range            Actual

                                      30 June 2021               30 June 2020

 Earnings per share (EPS)             In excess of 1,000 cents   165 cents per share
                                      per share

 Headline earnings per share          In excess of 1,000 cents   296 cents per share
 (HEPS)                               per share


The financial information on which this initial Trading Statement is based (and other
information contained in this announcement) has not been reviewed or reported on by
Motus’ external auditors. A further trading statement will be released once the Company
has a greater degree of certainty with regards to its financial results for the year ending
30 June 2021.

The annual financial results of the Group for the year ending 30 June 2021 will be published
on 31 August 2021, with the investor presentation being hosted virtually at 09:00 on
31 August 2021.


OPERATIONAL UPDATE

Economic climate

The economic and trading conditions continue to be weak in all the economies in which we
operate notwithstanding signs of improvement since the initial lockdowns in 2020. The
economies in the UK and Australia are anticipated to recover sooner as these are matured
economies, the vaccination roll-out programmes are faster and levels of infection are
under control. The South African economy will take much longer to recover to pre-Covid
levels.

Vehicle markets

The new vehicle markets in the geographies in which we operate continue to be affected
by weak macro-economic environments. Vehicle sales are under pressure as consumers
postpone purchases and, in South Africa specifically, trade down to more affordable entry
level new or pre-owned vehicles.

Average monthly new vehicle sales reported by The Automotive Business Council for South
Africa (known as NAAMSA) are 37 900 vehicles. Management projects annual new vehicle
sales to be between 430 000 to 450 000 vehicles for the calendar year to December 2021,
compared to 380 500 vehicles in the comparative period, which is an estimated increase
of 16% in unit sales.

In the UK, the Society of Motor Manufacturers and Traders (SMMT), forecast annual new
passenger vehicle sales to be 1 850 000 vehicles for 2021, compared to 1 631 000 vehicles
in the comparative period. Light Commercial Vehicle volumes are strong, driven by an
increase in home deliveries, and are forecast to be 369 000 vehicles in 2021, compared
to 293 000 vehicles in the comparative period.

In Australia, the Federal Chamber of Automotive Industries (FCAI), forecast annual new
vehicle sales will exceed one million vehicles for 2021, compared to 916 968 vehicles in
the comparative period.

Strong demand for pre-owned vehicles, which provide better value for money, continues
on the back of the unavailability of new vehicles.

Car Rental (SA)

The Car Rental business recovery remains slow due to limited travel by the corporate and
government sectors, and limited international and local tourism, coupled with price
competitiveness in the market. During recent weeks, there have been signs of an increase
in local leisure and business travel.
Financial Services (SA)

The Financial Services business has continued to demonstrate resilience in the current
environment and performance is being protected by annuity income streams and pre-paid
plans.

The business has been adversely impacted by the reduction in vehicle sales including sales
to vehicle rental companies. The performance of the bank joint ventures remains under
pressure, and management does not anticipate any profit shares for the current financial
year.

Aftermarket Parts (SA)

The Aftermarket Parts business was positively impacted by stock availability, servicing of
pent-up demand, increasing our customer base and growing market share after the initial
lockdown. The shift from higher priced premium products to more affordable products is
continuing.

We reduced the fixed cost base and synergies are being achieved through the use of the
distribution centre in China.

Foreign currency cover (SA)

Hyundai, Kia and Renault have forward cover on the Euro and US Dollar to February 2022.
All outstanding Mitsubishi commitments are covered. The Group purchases 70% of its
vehicles in US Dollars.

Inventory supply constraints

Vehicle manufacturing globally has been affected by the Covid-19 crisis and interrupted
component supplies. Management continues to monitor the situation closely and we are
working with Original Equipment Manufacturers (OEMs) to ensure that we have sufficient
stock of well-priced vehicles and parts to trade.

Outlook and guidance

We provide the following guidance with regards to the projected financial results for the
year ending 30 June 2021:

                        Projected range         Actual                    Range

                        30 June 2021            30 June 2020              (Increases)

 Revenue                R84 400 million to      R73 417 million           15% to 25%
                        R91 800 million

 EBITDA                 R5 100 million to       R4 082 million            25% to 35%
                        R5 500 million

 Operating profit       R3 525 million to       R2 136 million            65% to 87%
                        R4 000 million

 Profit before tax      R2 500 million to       R541 million              In excess of +100%
                        R3 000 million

 Attributable profit    R1 800 million to       R306 million              In excess of +100%
                        R2 200 million

The free cash flow position after the car rental de-fleet is very strong as the net working
capital and car rental fleet are at abnormally low levels. Net Debt to Equity is forecast to
be below 45% for the year ending 30 June 2021 (2020: 60%). The liquidity position
remains strong, supported by significant unutilised banking facilities.

Motus remains well within agreed bank covenant levels with sufficient liquidity headroom
for strategic acquisitions. The bank covenants are as follows:

 -   Net debt to EBITDA must be below 3,0 times (forecasting to be below 1,4 times at
     30 June 2021).
 -   EBITDA to net interest must be above 3,0 times (forecasting to be above 8 times at
     30 June 2021).

Shareholder returns

We continued the share buy-back programme and repurchased 5 million shares to date at
an average price of R68 per share.

We resumed dividend payments to shareholders and paid an interim dividend of 160 cents
per share during March 2021. The final dividend will be approved at the August 2021 Board
meeting.


By order of the Board


Johannesburg
9 June 2021

Sponsor
Merchantec Capital

Disclaimers:

Certain statements in this announcement are not reported financial results or historical
information, but forward-looking statements. These statements contain the views and
forecasts of management at the time of the publication of this announcement and are
predictions or indicate future events, trends, prospects, objectives, earnings or plans. If
one or more of these risks materialise, or should underlying assumptions prove incorrect,
the actual results may differ materially from those anticipated. There are a number of
factors that could cause actual results and developments to differ materially from those
expressed or implied by these forward-looking statements. Forward-looking statements
apply only as of the date on which they are made, and we do not undertake any obligation
to update or revise any of them, whether as a result of new information, future events or
otherwise.

Date: 09-06-2021 10:20:00
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