Extract of Group profit or loss
| for the year ended 30 June 2020 | 2020 Rm |
2019 Rm |
% change |
|||
| Revenue | 73 417 | 79 711 | (8) | |||
|---|---|---|---|---|---|---|
| Operating profit | 2 136 | 3 620 | (41) | |||
| Impairment of properties, net of profit/(loss) on sale | (60) | 15 | (>100) | |||
| Net foreign exchange losses | (13) | (14) | (7) | |||
| Net finance costs | (1 116) | (774) | 44 | |||
| Other net costs | (220) | (77) | >100 | |||
| Profit before tax, IFRS 2 charge and restructuring costs | 727 | 2 770 | (73) | |||
| Once-off restructuring costs | (186) | – | 100 | |||
| Issue of shares at a discount and modification of share appreciation rights | – | (160) | (100) | |||
| Profit before tax | 541 | 2 610 | (79) | |||
| Income tax expense | (356) | (714) | (50) | |||
| Profit for the year | 185 | 1 896 | (90) | |||
| Attributable to non-controlling interests | 121 | (28) | (<100) | |||
| Attributable to shareholders of Motus Holdings | 306 | 1 868 | (84) | |||
| Operating profit (%) | 2,9 | 4,5 | ||||
| Effective tax rate (%) | 68,6 | 27,6 |
Revenue decreased by 8% with all business segments impacted, except for the Financial Services business which was in line with the prior year. This is mainly due to lower vehicle unit volumes of 13% attributable to the global COVID-19 crisis which resulted in severe vehicle market contraction across all geographies in which we operate, as well as a reduction in parts and service sales. This was partially offset by an increase in selling prices and the bolt-on acquisitions in the UK and Australia.
The revenue decrease of 8% was as a result of a 10% decrease from new vehicle sales, a 7% decrease from pre-owned vehicle sales, a 5% decrease from parts sales and a 7% decrease from rendering of services.
Operating profit deterioration of 41% was as a result of a decrease in gross profit due to reduced sales volumes, lower margin realisation resulting from the shift to entry level vehicles and more affordable parts, reduced car rental income and pressure experienced in a competitive environment. This was partially offset by the decrease in operating expenses.
Impairment of properties, net of profit/(loss) on sale
Properties (mainly in the Retail and Rental and Aftermarket Parts segments) amounting to R101 million were impaired due to reduced future cash flow projections related to reduced rental increases and the rightsizing of the operational footprint as a result of the COVID-19 crisis, offset by profit/(loss) on the disposal of properties.
Other net costs
A number of once-off costs were incurred during the year. These once-off costs included goodwill and intangible asset impairments amounting to R289 million. These costs were partly offset by profits on the disposal of associates and subsidiaries.
Once-off restructuring costs
A number of once-off costs amounting to R186 million were incurred as a result of the current economic crisis caused by the COVID-19 crisis. These once-off costs included retrenchment and other business closure costs.
Depreciation increased by 64%
Depreciation increased primarily due to the impact of the IFRS 16 adjustment and an increase in vehicles for hire in the Import and Distribution and Retail and Rental segments.
Net finance costs increased by 44%
Net finance costs increased mainly as a result of the application of IFRS 16, higher average working capital and vehicles for hire levels and fair value adjustments on interest rates swaps due to the interest rate cuts.
Foreign currency loss decreased by 7%
Foreign exchange losses relate only to items that do not qualify for hedge accounting.
Effective tax rate increased by 41%
The effective tax rate increased significantly year-on-year. This was mainly due to impairment of properties, goodwill, other intangible assets and deferred tax assets written down.