Automotive group Motus forgoes dividend following impact of Covid-19 lockdowns

play article
Subscribers can listen to this article

JSE-listed automotive group Motus has decided to forgo its final dividend following a challenging year marked by the Covid-19 pandemic and a contraction in the vehicle sales market.

Its full-year dividend for 2019 was 490 cents per share. The company will not be paying any dividends for the 2020 financial year. 

The group, which unbundled from Imperial two years ago is a vehicle import, distribution, retail and rental company. In South Africa, it is the exclusive importer and distributor of Hyundai, Kia, Renault and Mitsubishi. It also has a rental business under the tempest and Europcar brands.

The group released its annual results for the year ended 30 June on Wednesday, which showed a decline in its headline earnings per share from 1 009 cents in 2019 to 296 cents. The group’s revenue dropped from R79.7 billion in 2019 to R73.4 billion, while operating profit fell by 41% to R2.1 billion from R3.6 billion in 2019. 

Motus CEO, Osman Arbee, said in a statement that the group's performance "reflects a decline in demand for our products and services as a consequence of national lockdowns in South Africa, Australia and the United Kingdom.”

South Africa’s vehicle industry has seen a decline due to lower demand, as consumers delay buying cars or trade down to cheaper models.  

The group retrenched 1 200 members of staff in South Africa and will assess whether to resume its dividend payments next year.

The company's share price rose by more than 4% after it published its results.

ZAR/USD
17.12
(-1.38)
ZAR/GBP
21.80
(-1.08)
ZAR/EUR
19.90
(-0.91)
ZAR/AUD
12.02
(-0.89)
ZAR/JPY
0.16
(-1.15)
Gold
1859.50
(-0.35)
Silver
22.86
(-1.35)
Platinum
847.00
(+0.12)
Brent Crude
42.26
(+0.47)
Palladium
2217.00
(-0.05)
All Share
53587.11
(-1.22)
Top 40
49547.74
(-1.16)
Financial 15
9401.28
(-1.95)
Industrial 25
72949.70
(-1.72)
Resource 10
53453.42
(-0.10)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes. We need the money.
11% - 1365 votes
It depends on how the funds are used.
73% - 8842 votes
No. We should have gotten the loan elsewhere.
16% - 1954 votes
Vote