Combined Motor Holdings survives 'severely pressured year' with 17% jump in profits

Cape Town - Combined Motor Holdings Limited announced a 17% increase in headline earning per share and profit before taxation of R337m for the past financial year. 

The group published its financial results for the year ended February 28 on Tuesday morning.

Total revenue rose to R10.57bn, up from R10.22bn in the 2017 financial year.  Headline earnings per share, meanwhile, were 332.9c, an increase of 17% over 284.2c in 2017. 

In a statement its CEO Jebb McIntosh said the motor sales and car hire group had published a “good set of results” despite what he described as a difficult economic environment in 2017. 

“Pleasing is the fact that the improvement has been led by a strong performance by the group's core retail motor sector,” he said. 

McIntosh said the 2017 financial year started out "under severe pressure" as investor confidence declined following Malusi Gigaba replacing Pravin Gordhan as finance minister in late March.

“This created an extremely negative period during which corporates, in particular, suspended capital goods purchases.

“State capture allegations, and endemic corruption and mismanagement at state-owned entities dominated the headlines, and it was only towards the end of the year, when a new political dispensation was forecast, that a semblance of positivity returned.”

He said key takeaways from the SA vehicle market included limited vehicle price increases in 2017 as manufacturers fought for market share, and a continuing downward trend of sales within the luxury vehicle segment.

“The rate of new vehicle price increases averaged approximately 3%, with reports indicating that the year-on-year increase dropped to its lowest level since 2013. 

“This, coupled with a hardening of used vehicles prices, following supply shortages, has caused a
correction in the trend of past years of consumers moving to the used vehicle market because of affordability." 

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER