Motus holds on to dividend as profits slump

Automotive group Motus, which imports and sells cars, has held on to its final dividend, saying profits are under pressure as SA consumers delay vehicle purchases and shift to cheaper models.

The resumption of dividend payments will be reassessed during the 2021 financial year based on the trading results, Motus said. The  group also faces one-off costs as it moves to cut staff and close car rental branches.

The effect of the Covid-19 lockdowns during its year to end-June was severe, with SA new vehicle sales falling by 98% in April, and 68% in May.

The group, which is also a distributor and retailer of accessories and aftermarket parts for out-of-warranty vehicles, reported a 72% decline in headline earnings to R550m during the year to end-June.

One-off costs for the period include asset writedowns of R289m, and retrenchment and restructuring costs of R171m.

The group provides car rental through the Europcar and Tempest brands, and said in June it would be closing branches and cutting staff.

The group said on Wednesday it had reduced its car rental fleet by 35%, or 7,000 vehicles, while it is reducing its rental workforce by 45%.

The weak macroeconomic environment, lack of disposable income and consumer confidence are putting pressure on the SA new vehicle market, the group said.

“Industry margins will continue to underperform as consumers continue to delay purchases, trade down with the shift to cheaper vehicle models and place pressure on the quality of pre-owned vehicle supply,” Motus said.