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Durban - From revenue which exceeded R10bn for the first time, retail motor group Combined Motor Holdings reported a 10% increase in operating profit for the year ended February 28 2014, maintaining a 3% operating margin.
Releasing the results in Durban on Wednesday, CEO Jebb McIntosh reported that, given the economic background, he was pleased with the achievement.
He said that the three-month strikes by both manufacturer and motor component workers, the currency depreciation and the recent interest rate hike made for testing times in the motor retail industry.
Net finance costs increased 12% due to the expansion of First Car Rental's fleet and the price rate hike in January.
This, together with a marginally higher tax bill, caused headline earnings to fall 1% to 156,7 cents per share.
Both the car hire and financial services segments recorded good results.
McIntosh reported that the First Car Rental brand has grown in recognition and the segment has recorded 25% compound growth in earnings over the last six years.
The group's parts and service departments produced steady growth in revenue and earnings, and their continued success will provide a buffer against the expected flat new vehicle sales market.
Dividends paid during the year were up 28% to 78 cents, and the company has declared a dividend of 50c per share, payable in June 2014.
The group ended the year with cash resources of R308m and a 14% reduction in issued shares will enhance earnings per share in future years.
"Since its listing in 1987 the share price has recorded 16% annual compound growth and the group has paid interim and final dividends during all but one of those twenty six years," said McIntosh.
He believes the economy is heading for a period of consolidation and slower growth.
He cites the fall in real disposable income, interest rate hikes and continued labour unrest as worrying factors.
"However, the group has the resources and a strong and experienced management team to embrace the challenge of growing earnings in what threatens to be a difficult trading environment," he said.
Releasing the results in Durban on Wednesday, CEO Jebb McIntosh reported that, given the economic background, he was pleased with the achievement.
He said that the three-month strikes by both manufacturer and motor component workers, the currency depreciation and the recent interest rate hike made for testing times in the motor retail industry.
Net finance costs increased 12% due to the expansion of First Car Rental's fleet and the price rate hike in January.
This, together with a marginally higher tax bill, caused headline earnings to fall 1% to 156,7 cents per share.
Both the car hire and financial services segments recorded good results.
McIntosh reported that the First Car Rental brand has grown in recognition and the segment has recorded 25% compound growth in earnings over the last six years.
The group's parts and service departments produced steady growth in revenue and earnings, and their continued success will provide a buffer against the expected flat new vehicle sales market.
Dividends paid during the year were up 28% to 78 cents, and the company has declared a dividend of 50c per share, payable in June 2014.
The group ended the year with cash resources of R308m and a 14% reduction in issued shares will enhance earnings per share in future years.
"Since its listing in 1987 the share price has recorded 16% annual compound growth and the group has paid interim and final dividends during all but one of those twenty six years," said McIntosh.
He believes the economy is heading for a period of consolidation and slower growth.
He cites the fall in real disposable income, interest rate hikes and continued labour unrest as worrying factors.
"However, the group has the resources and a strong and experienced management team to embrace the challenge of growing earnings in what threatens to be a difficult trading environment," he said.
