Super Group: Sustaining global strength

As South Africa makes its mark on the international stage, globalisation puts an ever-growing emphasis on supply chain management and logistics. This has been the forte for one of the country’s brightest lights as Super Group has continued to enjoy revenue growth.

In February the company reported its interim results for the 6 months to December, which showed that the logistics, dealership and fleet management group grew revenue 23 per cent as headline earnings per share grew 11 per cent.

Revenue growth was mainly attributed to the good performances by the supply chain South African businesses which occurred in spite of a metals industry strike last year.

leased-cars“I think the results were good, but there were some areas of disappointment,” Super Group CEO Peter Mountford commented.

He said the biggest negative factor was African Logistics, despite a foreign exchange gain of R8 million in the period. Mountford said the poor performance was a combination of a fall in transport prices driven by more competition, mainly from small logistics operators.

The company’s FleetAfrica division saw a reduction in operating profit although there was a 19.7 per cent increase in revenue.

Established back in 1986, Super Group is a broad-based supply chain management business listed on the Johannesburg Securities Exchange. Super Group’s supply chain division provides a platform for the group’s core expertise and offerings. This expertise is applied into vertically integrated divisions covering vehicle dealerships and fleet management.

Over time, Super Group has undertaken a number of acquisitions and has evolved into a truly international business, offering customers a comprehensive range of products and services.

“Super Group is essentially a supply chain mobility company revolving around the optimisation of supply chain processes and vehicle fleets with a strong IT focus and technology underpin. Our business encompasses the planning and management of all activities across the supply chain from the sourcing, procurement, transport, warehousing and distribution of goods and services. This is made possible through coordination and collaboration with our valued channel partners; be they suppliers, intermediaries, third-party service providers or customers. In essence, Super Group integrates supply and demand management within and across companies,” the corporate website describes.

The performance of Super Group is of course built around reputation and outstanding service delivery. Last December the business was able to announce an upgraded rating from Standard & Poor’s, through the following news release:

“Super Group is pleased to announce that Standard & Poor’s have revised Super Group’s long-term national scale rating from zaA to zaA+ and assigned a new short-term national scale rating of zaA-1. 

“The upgrade reflects the better-than-anticipated performance of Super Group in financial year 2014 and so far in financial year 2015. This has meant that the company’s financial ratios are now stronger than previously forecast. Standard & Poor’s have revised its assessment of the financial risk profile of Super Group to “modest” from “intermediate”. 

woman-in-car-lease“Revenue increased by 22 per cent to South African rand (ZAR) 14,296 million in the year ending June 30, 2014. This was mainly a result of new contract wins in the supply chain division in South Africa, strong performance in its African logistics business, and better-than-expected sales in its vehicle dealership business unit. At the same time, the company’s Standard & Poor’s-adjusted EBITDA margin was better than expected at around 15 per cent, compared with 14.4 per cent the year before. Super Group’s profitability measures are somewhat stronger than its rated European logistics services peers.” 

The past 12 months have certainly proved a busy time for Super Group. Effective from July 1st, Super Group acquired Phola Coaches, a business providing passenger transport solutions for the mining, power generation and construction sectors.

The following month the business secured a major Transnet fleet management contract and set its sights on securing more parastatal and government contracts.

Peter Mountford, the chief executive of the listed transport logistics and mobility group, stated that the 5 year contract awarded to its FleetAfrica business involved the management of about 3,500 light commercial vehicles. He said the roll-out of the contract had commenced and had boosted the number of vehicles managed by FleetAfrica in South Africa to more than 7,000.

Mountford said FleetAfrica already had some municipal clients. It had a strong corporate client base but the Transnet contract was the biggest it had been awarded by a parastatal. He believed that the Transnet award would help FleetAfrica get further contracts from parastatals.

Super Group is of course very much a global logistics group these days and aside from its South African business, has operations in Australia, New Zealand and the United Kingdom. The company has a strong footprint in Africa with operations in Mauritius, Zimbabwe, Zambia, Malawi, Mozambique, Democratic Republic of Congo and Ghana.

Last October Super Group announced its latest acquisition  – of Allen Ford, a franchised motor dealer group that has over 100 years of history within the UK motor industry. Allen Ford UK currently operates 13 franchised Ford motor dealerships and 2 franchised Kia motor dealerships in 4 of the key Ford franchise areas in England.

“Allen Ford has won numerous awards in recent years, and is the second largest independently owned Ford franchise network in the UK,” stated the company, which further strengthens Super Group’s hand.