From SENS
Combined Motor Holdings (CMH) with a Market Cap of R 1 170 919m has released its abridged financial results for the year ended 28 February 2014.
Group revenue increased by 10% to R10,8 billion, with the retail motor, car hire and financial services segments reporting real growth. Despite the revenue growth and the knock-on effect on variable expenses, total selling and administration expenses rose a modest 7,3%. Expansion of the car hire fleet, coupled with the January 2014 prime rate hike, caused net finance costs to increase by 12,2%.
Within the segments, the 10,7% decline in retail motor profit before taxation was more than offset by the improvements in car hire, marine and leisure, and financial services.
After eliminating the cost of goodwill impaired last year, headline earnings reflected a decline of 1,3%, to R169,3 million. Although disappointing, this still represents a creditable 27,2% return on shareholders’ funds.
In October 2013 the Board announced that it intended to utilise some of its surplus cash to effect an offer to shareholders to voluntarily submit for repurchase all or a portion of their shares. The exercise was completed in February 2014, and resulted in the Company repurchasing 15,4 million shares at R13 each, a total outlay of R200,2 million excluding costs. Despite this negative cash flow, and the payment of dividends totalling R85,0 million, the Group ended the year with cash resources of R308,4 million. The 14,0% reduction in shares in issue will have the effect of enhancing earnings and dividends per share in future periods.
Total dividends declared during the year were 78 cents per share, up 27,9% on the previous year. The relatively unchanged level of headline earnings and continued liquidity have enabled the Board to declare a dividend of 50 cents per share, payable in June 2014.
CMH’s CEO, Jebb McIntosh had this to say about the results:
“The year began in a positive mood, with consumer confidence at the relatively high levels recorded in the latter months of 2012. However, testing times began with the prolonged strike in both the motor manufacturing and the motor component sectors. These impacted negatively on production for a three-month period. The continual fuel price increases, the currency collapse in November/December, and the interest rate hike in January 2014 have precipitated a fall in consumer confidence to levels last seen in October 2010. Higher levels of household debt, and consequent falling vehicle affordability, have increased the pressure in an already competitive and testing economy.
Given this background, I am pleased with the results achieved by the Group. Off revenue which exceeded the R10 billion level for the first time, the Group reported a 10,5% increase in operating profit, and a 3% margin on revenue.”
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