Super Group looks for more acquisitions

August 28, 2019: Super Group, a leading transport logistics company providing end-to-end supply chain management solutions is seeking further acquisitions in spite of the tough trading conditions in many of the markets where it operates, chief financial officer Colin Brown stated.

In the month of July, it has acquired three companies for about R800 million.

He said in the supply-chain solutions market, companies were closing, going into liquidation or shutting divisions, which was creating opportunities for Super Group to grow its market share, and also possible bolt-on acquisitions.

The transport and logistics group has operations across Southern Africa, Europe, and Australia.

Brown said their capital allocation priorities were first to fund organic growth, then to follow acquisitive and other growth opportunities, then to buy back shares in Australia and on the Johannesburg Stock Exchange (JSE).

The strong performances were attributed mainly to the sub-Saharan commodity-facing businesses. There were also solid performances by the industrial, technology, logistics and vehicle rental businesses in the supply chain Africa division. Dealerships in South Africa were under pressure, but outperformed overall national statistics, while dealerships in the UK delivered a solid performance despite the Brexit uncertainty.

Brown said, "With the consumer challenges and falling national car sales in South Africa, a depressed vehicle market and a slightly weaker economy in Germany, and a softening of the vehicle market in Australia, I think we have put up an exceptional performance."

He said they expected the difficult trading conditions in most of Super Group's markets for the new financial year, to continue. In particular luxury car sales in South Africa were expected to remain weak; Germany's vehicle market was expected to be further impacted by the threat of recession and the impact of an emissions testing scandal on the automotive industry.

In July 2019, Super Group acquired a 65 percent interest in Lieben Logistics and a 51 percent interest in GLS Supply Chain Equipment, from Cape Town, for R498.8 million and R96.3 million, respectively. In the same month, Supply Chain Europe's inTime acquired an 80 percent interest in Trans-Logo-Tech for R184.3 million.

Last July, an 80 percent stake in Cargo Works, a specialist overnight cargo business, was bought for R49.5m, while a minority stake in Legend Logistics was acquired for R174.5m. Dealerships SA acquired Orbit Motors effective October 2018.

In the past year, the Supply Chain Europe operations had performed poorly in Germany.

SG fleet's performance for the year was also under pressure as a result of some of the businesses within this division having to negotiate a range of external and legislative challenges.

Group chief executive Peter Mountford said Super Group had invested R2.1 billion in net additions and acquisitions through the financial year to ensure the future growth of the group.