Directors’ Report

The directors present their report which forms part of the Annual Financial Statements of the company and of the Group for the year ended 30 June 2017.

Nature of business

Super Group Limited (Registration number 1943/016107/06), the holding company of the Group, is a company listed on the Main Board of the JSE in the “Industrial Transportation” sector, incorporated and domiciled in the Republic of South Africa. Super Group is a broad-based supply chain management business, operating predominantly in South Africa, with operations across sub-Saharan Africa and businesses in Australia, Europe, New Zealand and the United Kingdom. Its principal operating activities include supply chain management, dealerships and fleet management activities.

Financial results

The results for the year are set out in the Summarised Consolidated Financial Statements presented here of this Integrated Report. The Annual Financial Statements are published on the Group’s website www.supergroup.co.za.

Year under review

The overview of the results as well as the financial performance of the Group is dealt with in the Chief Executive Officer’s Report and the Divisional Reviews in the Integrated Report published on the Groups website.

Significant events

SG Fleet acquisition of Fleet Hire

SG Fleet acquired Fleet Hire effective 4 August 2016 for a purchase price of R367.5 million. The acquisition provides SG Fleet with critical mass in the attractive UK market and, in combination with its existing local business, creates a profitable platform for continued growth.

Western Cape dealerships

The Group acquired the Western Cape dealerships business from Sandown Motor Holdings (Pty) Ltd effective 1 September 2016 for a purchase price of R899.3 million. The business consists of nine dealerships, predominantly Mercedes-Benz dealerships, and one property.

Listing of DMTN on 9 September 2016 and 31 October 2016

The JSE listed Super Group’s SPG002 and SPG003 senior unsecured notes, in terms of its DMTN Programme dated 22 October 2013 on 9 September 2016 and 31 October 2016, respectively. The value of the SPG002 issue was R50 million with the interest linked to the three-month JIBAR coupon rate payable quarterly on 9 March, 9 June, 9 September and 9 December of each year. The maturity date of this issue is 9 September 2019. The value of the SPG003 issue was R154 million with the interest linked to the three-month JIBAR coupon rate payable quarterly on 31 January, 30 April, 31 July and 31 October of each year. The maturity date of this issue is 31 October 2019.

Acquisition of Legend

Super Group acquired a 75% interest in Legend effective 30 September 2016 for a purchase price of R110.5 million. Legend has bolstered Supply Chain Africa’s business.

SG Fleet acquisition of Motiva

SG Fleet acquired Motiva effective 30 November 2016 for a purchase price of R249.0 million. Motiva is one of the UK’s leading independent Vehicle Fleet Solution Providers.

SG Coal transactions

During the year, Super Group acquired the 49.2% minority interest in SG Coal for R167.3 million.

Acquisition of Essex Auto Group

The Group acquired EAG effective 1 March 2017 for R407.0 million. EAG owns five Ford, two Kia, one Mazda and one Fiat dealerships.

Share capital

The authorised and issued share capital is detailed here of the Annual Financial Statements.

The directors present their report which forms part of the Annual Financial Statements of the company and of the Group for the year ended 30 June 2016.

Directors and Group Company Secretary

The names of the directors and Group Company Secretary who currently hold office are as follows:

  • Phillip Vallet: Independent Non-executive Director and Chairman of the company
  • John Newbury: Independent Non-executive Director
  • David Rose: Independent Non-executive Director
  • Mariam Cassim: Independent Non-executive Director
  • Dr Enos Banda: Independent Non-executive Director
  • Valentine Chitalu: Independent Non-executive Director
  • Peter Mountford: Group CEO
  • Colin Brown: Group CFO
  • Nigel Redford: Group Company Secretary

There were no changes to the Board to the date of posting of the Integrated Report.

Details of directors’ remuneration, share appreciation rights and options appear here.

Dividends

The Board has resolved not to declare a dividend for the current year. The dividend policy will be reviewed in the year ahead.

Resolutions

During the year, other than the resolutions passed at the Annual General Meeting on 22 November 2016 and the General Meeting on 24 January 2017, the shareholders of the company passed no other resolutions. No special resolutions, the nature of which might be significant to members in the appreciation of the affairs of the Group, were passed by any subsidiary companies during the year covered by this Integrated Report.

Subsidiary companies

Details of the principal subsidiary companies appear here of the Annual Financial Statements available on the website.

Share option schemes

Refer here for information relating to option schemes, share-based payments and the B-BBEE Staff Empowerment Scheme.

Events subsequent to 30 June 2017

SG IN tIME acquisition of an interest in Ader

Effective 4 July 2017, SG IN tIME acquired an 89.5% interest in Ader, a Spanish courier and express transport operator, for a purchase consideration of €11.6 million.

Acquisition of Bestodeck Limited (Slough Motor Corporation)

Dealerships UK acquired Slough Motor Corporation effective 4 July 2017 for a purchase consideration of £24.0 million. SMC owns six Ford dealerships and two Suzuki dealerships in Kent and Berkshire.

Acquisition of an additional interest In SG Fleet

Effective 25 August 2017, Bluefin Investments Limited acquired an additional 1.63% in SG Fleet for R175.9 million, increasing the Group’s holding to 54.0%. Effective 11 September 2017, SG Fleet issued 4 136 925 shares on exercise of vested options granted as long-term incentive awards under SG Fleet’s Equity Incentive Plan, diluting the Group’s holding to 53.14%.

Acquisition of minority interest in Digistics

Effective 18 September 2017, Super Group Holdings Proprietary Limited acquired the remaining 45.0% minority interest in Digistics Proprietary Limited for R102.7 million, increasing the Group’s holding to 100%.

Litigation statement

Super Group is not involved in any material legal or arbitration proceedings or legal actions, nor are the directors aware of any proceedings that are pending or threatened, that may have, or have had, in the 12-month period preceding the date of this Integrated Report, a material effect on the Group’s financial position.

Material changes

There have been no material changes in the financial or trading position of the company and its subsidiaries between 30 June 2017 and the date of this Integrated Report.

Going concern

The directors consider that the Group and company have adequate resources to continue operating for the foreseeable future and that it is therefore appropriate to adopt the going concern basis in preparing the company’s financial statements. The directors have satisfied themselves that the Group and company are in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements.