With all suspensive conditions now cleared, Super Group’s R7.5bn sale of its 53.6% stake in Australian fleet management firm SG Fleet Group is on the brink of completion. For a company with a market cap still below R10bn, the deal isn’t just significant — it’s transformative. The price tag implies an earnings multiple north of 15 for an asset that contributed only 40% of group earnings. Simply put, it was an offer too good to refuse.
The deal ticks three major boxes. First, it wipes out R2bn in debt, bringing the group’s net debt to earnings before interest, tax, depreciation and amortisation ratio from a stretched three times down to a much more manageable 0.77 times. Second, it returns a chunky R5.5bn — or R16.30 a share — to shareholders via a special dividend. And third, it positions the remaining business on an attractive valuation. For corporate investors who aren’t liable for dividend tax, the ex-div share price implies an entry point of just R12.70 a share for the continuing operations at the time of writing. Adjusted annualised headline EPS of 242c a share, including the finance cost savings from lower debt, put the group on a forward earnings multiple of just 5.2. That’s cheap, even by South African standards.
What remains post-sale is a streamlined business with a clearer geographic and operational focus. About 60% of Super Group’s operating assets now lie in its African supply chain operations. The rest is split between South African and UK car dealerships, a smaller African fleet leasing business and loss-making European supply chain operations.
The African logistics segment is the backbone, but not without its share of trouble. Commodity logistics in particular have taken a hit, with coal exports disrupted by political unrest near the Maputo corridor and copper shipments rerouted from the troubled Durban port to Walvis Bay and Dar es Salaam. Hopes for a turnaround hinge partly on some of that copper trade returning to Durban later in the year. In South Africa, logistics fared better on the consumer side, where demand for fast-moving consumer goods has held up in a weak macroeconomic environment.
On the automotive retail side, the South African dealerships are proving to be resilient. While national vehicle sales dropped 3.7% in 2024, according to automotive umbrella body Naamsa, Super Group’s exposure to rapidly growing Chinese brands such as Haval, Jetour, Great Wall Motors, Chery and Foton has helped it to weather the storm. A 50 basis point cut in South Africa’s prime rate has also begun to filter into stronger financing conditions, giving a mild tailwind to both new and used vehicle sales.
In contrast, the UK dealership arm, anchored by Ford but also including brands such as Mazda, Kia, Hyundai and Suzuki, is struggling. Under vehicle emissions trading scheme rules, 28% of all new car sales must be battery electric vehicles (BEVs) in 2025, placing immense pressure on brands such as Ford, which are still transitioning their lineups. Combined with the discontinuation of the top-selling Fiesta model and a 14-month delay in launching the new Puma model, Ford’s UK passenger market share slumped to 5.8%, dragging Super Group’s performance with it. However, the Puma became the UK’s top-selling car in early 2025, and Ford is introducing new BEV models such as the electric Capri and Territory. Despite these green shoots, the pressure on the passenger vehicle side is expected to continue. Super Group CEO Peter Mountford indicated that the group is taking a tough but necessary stance by consolidating its UK dealership network, which is expected to show benefits in the second half of 2025.
Dealerships South Africa is likely to continue outperforming the market as the business expands its offering in Chinese-branded vehicles
Meanwhile, FleetAfrica has quietly been doing its job. Despite an absence of large-scale government tenders, the unit grew operating profit through strict cost control and steady demand for ad hoc rentals. With several large tenders on the horizon and many public fleets running beyond optimal replacement cycles, there’s reason to believe this business could spring a positive surprise in the next financial year.
In the loss-making European supply chain unit, the InTime business has been put up for sale. Acquired in 2015 for more than R2bn, this time-critical logistics business has been battered by declining automotive parts demand and weaker vehicle production in Germany. Mountford said management has received 15 nonbinding offers for InTime and plans to finalise a sale by June 30. It is, however, holding on to Amco, a UK-based land, air and sea logistics firm bought for R740m in July 2023. Though UK vehicle production is now at levels last seen in 1956, Amco is repositioning towards energy, aerospace and industrial clients. Digitalisation and automation are key focus areas, and there’s cautious optimism about its recovery.
Looking ahead, despite tough conditions in Southern Africa and Europe, Mountford expects a slightly better performance in the second half of the 2025 financial year for Super Group compared to the first. Much of this hinges on improved commodity exports, particularly copper, from Southern Africa. Continued restructuring in the UK dealership network should help lift profitability there, and the consumer-focused logistics and fleet leasing units are expected to maintain a solid performance. Dealerships South Africa is likely to continue outperforming the market as the business expands its offering in Chinese-branded vehicles, now the fastest-growing segment in the country.
Mountford and CFO Colin Brown, who have held their positions since 2009 and 2010 respectively, are seasoned operators with deep institutional knowledge. The sale of SG Fleet provides them with breathing room: a clean balance sheet and the ability to double down on organic growth in their core Southern African market.
Importantly, this shift comes at a time when high interest rates and geopolitical risks remain a threat to overleveraged companies. With no plans to make acquisitions in the near future, Super Group is derisking its portfolio. There’s still some exposure to hard currency earnings via Amco and the remaining UK dealerships, but the focus is clearly on Africa. And it’s not a bad place to be — there’s room for growth, especially in underserved fleet and logistics markets.
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