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MOTUS HOLDINGS LIMITED - Initial Trading Statement, Operational and Strategic Update

Release Date: 18/11/2021 11:44
Code(s): MTH     PDF:  
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Initial Trading Statement, Operational and Strategic Update

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



In terms of the Listings Requirements of the 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 six-months
ending 31 December 2021 has indicated that:

                                    Projection for the six           Actual for the six
                                                 months to                    months to
                                          31 December 2021             31 December 2020

Earnings per share                 Growth in excess of 20%          507 cents per share
(EPS)                               (>609 cents per share)

Headline earnings per share        Growth in excess of 20%          526 cents per share
(HEPS)                              (>632 cents per share)

The financial information on which this initial trading statement is based (and any 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 Group has
a greater degree of certainty with regards to its financial results for the six-months ending
31 December 2021.


New vehicle markets

Vehicle sales are continuing to recover despite the erratic vehicle supplies being
experienced by Original Equipment Manufacturers (OEMs). The growth in vehicle sales
bears testimony to consumers’ resilience (both private and corporate) amid difficult credit

Average monthly new vehicle sales reported by naamsa, The Automotive Business Council
for South Africa, are 40 000 vehicles. Management projects annual new vehicle sales to
be between 440 000 and 460 000 vehicles for the calendar year ending 31 December
2021, compared to 380 500 vehicles in the comparative period, and between 470 000 and
490 000 vehicles for the financial year ending 30 June 2022, compared to 445 319 vehicles
in the comparative period. Motus’ increased market share to date has been supported by
an expansion of its vehicle range, particularly in the growing entry level and small to
medium SUV categories, coupled with exciting new model launches.

In the UK, the Society of Motor Manufacturers and Traders (SMMT), forecast annual new
vehicle sales (excluding Heavy Commercial Vehicles) to be in excess of 2 million vehicles
for the 12 months to 31 December 2021, compared to 1 924 000 vehicles in the
comparative period. Light Commercial Vehicle volumes are strong, driven by an increase
in home deliveries, and are forecast to be up by 16% to 340 000 vehicles. Heavy
Commercial Vehicle sales are projected to increase to 38 000 vehicles, up by 13% for the

In Australia, the Federal Chamber of Automotive Industries (FCAI), forecast that annual
new vehicle sales will exceed 1,1 million vehicles for the 12 months to 31 December 2021,
compared to 917 000 vehicles in the comparative period.

Pre-owned vehicle markets

Strong demand for pre-owned vehicles across all geographies continues on the back of the
shortage of new vehicles.

The industry is experiencing a short supply of pre-owned vehicles from car rental
companies. We have identified alternative sources of pre-owned vehicles and are
benefitting from our investment in technology, namely the platform and the
getWorth acquisition concluded in March this year.

Global supply chain disruptions

Global supply chain disruptions continue to impact the delivery of vehicles, panels and
parts, with substantial increases in freight and logistics costs negatively impacting
operating margins.

Our four importer brands and the 21 non-owned brands are fortunate in that they have
an extensive model range which enables them to focus on available stock. While there are
shortages of certain derivatives at different times, we are still able to offer the customer
a wide selection of brands and models.

The availability of panels and parts is of concern, however, we are managing with multiple
suppliers and utilising airline companies for emergency supplies.

We anticipate inventory supplies to normalise during the fourth quarter of our 2022
financial year.

Car Rental

This business has been restructured and costs having been reduced accordingly. Fleet
levels are at 14 000 vehicles compared to 9 000 vehicles in the midst of the Covid crisis.
During December 2021, the fleet will be increased to approximately 15 500 vehicles and
at June 2022, it is estimated to be around 14 500 vehicles.

We are currently operating at utilisation levels in excess of 70% as local and international
demand levels are starting to increase for the November 2021 to February 2022 tourism


The liquidity position remains strong, supported by significant unutilised banking facilities.

Debt to equity levels remain below targeted levels, projected to end at below 50% for the
six-month period ending 31 December 2021.

Motus remains well within agreed bank covenant levels with sufficient liquidity headroom
for strategic acquisitions, dividend distributions and share buy-backs.

Shareholder returns

We continued the share buy-back programme and have repurchased 2,4 million shares at
an average price of R100,82 per share, from 1 July 2021 to date.

An interim dividend for the half year will be considered at the February 2022 Board


Strategic investment in innovation and digital platforms

Innovation is accelerating across the customer buying and selling process, including the
marketing, valuation and trading of pre-owned vehicles.

Motus will continue to innovate the digital journey within our dealers and through our on-
line platforms, as well as through the technology recently acquired as part of the getWorth
acquisition, which technology is being enhanced and rolled-out across the Group. We will
invest in leading technology as a key business differentiator, including ongoing digitisation
of the customer experience to respond to market expectations.

Aftermarket parts business acquisition: FAI Automotive plc (FAI)

As set out in the announcement released on SENS during October 2021, we acquired the
entire issued share capital of FAI with effect from 1 October 2021.

The acquisition is expected to bolster Motus’ international presence in the UK, will provide
access to Eastern European markets and will underpin the group’s intention to expand the
Motus Aftermarket Parts (MAP) business offering.

One of FAI’s strategic objectives was to establish a distribution center in China to better
serve its international client base. Together, FAI and MAP can procure products at
competitive prices from China and Taiwan, utilise their buying power and share MAP’s
existing distribution centres in the region. Various projects are underway to unlock
synergistic benefits for both FAI and Motus. We anticipate that the acquisition will also
provide other opportunities for growth.

Turnover for the 12 months ended 30 June 2021 amounted to GBP32 million (c. ZAR
640 million) with an operating margin in excess of 15%, and over 50% of sales being
generated outside of the UK.

Unaudited interim financial results

The unaudited interim financial results of the Group for the six-months ending
31 December 2021 will be published on 22 February 2022, with the investor presentation
being hosted virtually at 09:00 on 22 February 2022.

By order of the Board

18 November 2021

Merchantec Capital


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

Date: 18-11-2021 11:44:00
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