By Alec Hogg
Motus Holdings, SA’s market leading car retailer which is being unbundled from Imperial Holdings, shows no lack of ambition in the pre-listing statement published today.
When separately listed on 22 November, Motus will jump straight into the JSE’s top 100 with a market capitalisation of over R20bn. That will put it into the exchange’s top 80 by value just behind Massmart, in line with Sibanye and ahead of Impala Platinum.
After the unbundling, Imperial shareholders will receive a new share in Motus for every one they currently own in the group. The rump of the business will retain the existing listing but will change its name to Imperial Logistics.
Motus’s strategy is clearly articulated in today’s pre-listing statement: It will focus on cementing and growing market leadership in retailing, renting, importing and maintaining SA’s motor vehicles. And it intends generating additional growth through targeted car retailing acquisitions abroad, adding to recent purchases in the UK and Australia.
Today’s announcement also presents a cogent argument for Motus’s separation from the Imperial Logistics rump. This includes articulating the usual benefits enjoyed by smaller entities – for instance a tighter focus enabling greater entrepreneurial flair.
Motus’s management has also drilled down to the defined costs of being run separately from the Imperial Group. They explain that already relatively modest additional annual costs of R22m will be offset by R15m in ongoing reductions in the Motus interest bill.
Shareholders can look forward to this kind of financial detail as a feature of Motus’s future reporting. The new company’s board of directors, unveiled in the pre-listing statement, boasts five chartered accountants out of the seven directors entrusted with guiding it in future.
Both of the executive directors on the board, CEO Osman Arbee (59) and CFO Ockert Janse van Rensburg (45), are CAs. So is the chairman, former Nedbank executive Graham Dempster (63). Saleh Mayet (62) and JJ Njeke (60), who step onto Motus’s board in January, also passed the accounting profession’s board exam.
Even the sixth director, Phumzile Langeni (44), one of president Cyril Ramaphosa’s four emissaries charged with raising global investment of $100bn in five years, is from a similar background. She qualified with a B Comm Hons from Unisa. Odd one out is lawyer Oshy Tugendhaft (70), who brings the benefit of experience having served on Imperial’s board since 1998.
Langeni will chair the Imperial Logistics board while Dempster will also serve on that company’s directorate. Tugendhaft has stepped off the Imperial Logistics board.
Today’s statement says former Old Mutual SA chief executive Roddy Sparks (59, incidentally, also a CA) and his fellow non-executive director, lawyer Thembisa Skweyiya (45) will leave the Motus board at the end of the year. They are both directors of Imperial Logistics.
As part of the listing, Motus will be enhancing its Black Economic Empowerment credentials by issuing, at par of 4c each, R178m worth of preferred ordinary shares to the Imperial group’s longstanding BEE partner Ukhamba Holdings.
Based on Imperial’s most recent set of financial statements, Motus delivered diluted headline earnings per share of 899c in the year to end June.
At a modest 12 times price:earnings ratio, Motus shares would hit the market at a price of R108 a share, giving it a total valuation of over R21bn, around double its tangible net asset value.
