Motus Holdings Limited (MTH) Earnings Call Transcript & Summary

Good morning, everyone. Thanks for joining us on this second webinar presentation for the Motus Group. We're pleased that we're presenting our annual results for the year ended 30 June 2020. A special welcome to the nonexecutive directors of Motus, which are listening in today. A special welcome to our Chairman, Graham Dempster; and the nonexecutive directors; the executive management team; the management team; and staff members, who are listening in today. Thank you for joining us. And to everyone else that's listening, thanks for taking the time to listen to us. This situation is not ideal. We prefer to talk to you face-to-face. But under the circumstances, this is the best we can do. And I'm hoping, if all goes well, this is the last time we talk to you at a webinar, maybe one more time. But from February, we want to talk to you in person. So we all hope and pray that the Minister can make some positive -- the President can make some positive announcements, and we can get back to the new normal. I'll go into the agenda. The agenda is quite busy. So we've changed our flow this morning, and I think it was important to accommodate the COVID crisis and our response to that. So we put in sections to that as well. And then because of that, when Ockert talks about the segmental review, there may be a bit of duplication in what I say and what he says. But just bear with us because we did change the format slightly this morning. So as you can see, we talk about the business model, we go through the segments, and COVID before and after and then financial performance. And then we'll go through a bit of strategy and then give you some notes on our prospects as well. Okay. So the first question you're going to be asking yourself, why is this business resilient and what makes it resilient? So what we thought, we just put 7 points down for you to say, firstly, the diversified structure of this business in the automotive sector, which has businesses in South Africa, the U.K., Australia and a bit in the rest of Africa, in East Africa, and we've got some in Southeast Asia. Then the fully integrated model, which is the imported division, the retail division, the Financial Services and the Aftermarket Parts business, gives this business a model that all 4 business segments don't fire sometimes on the same cylinders. As a result, the one carries the other. If you only have one of these divisions, you can run into problems. But because you've got 4 divisions that are integrated and that have different needs and operate and excel in different periods, you get a fair balance in the group. And I think that's very important when you're comparing us to other motor groups. Very few motor groups have an integrated model that has import, retail, rental, financial service and aftermarket parts. In fact, in South Africa, none. So the integrated model helps us enjoy the good times and bear the brunt in the bad times. The other important issue, obviously, is scale. In South Africa, we are the biggest motor group. And the scale provides us a good platform to the OEMs, to the suppliers, to the customers, to our business partners. Because of our footprint, they have many touch points for their customers. And obviously, that creates customer loyalty, and we touch the customer throughout the journey of ownership of about a vehicle. So that's a big plus for us. We'll talk a bit more about the high free cash flow generation. But when we get into details, and Ockert will talk about liquidity, but you'll understand why we talk about high free cash flow generation and the annuity income streams that we have in our business, in the Financial Services business. The other important point we want to make to you, and that became very apparent during the COVID crisis, there are parts of our business that are not purely dependent on new car sales. For example, the parts and services in the workshops, the Aftermarket Parts business that sells parts and accessories. And the Financial Services business are not directly related to the sale of a new or a pre-owned car. They do impact us down the road. But immediately in the short term, those businesses can still trade comfortably despite a decline in new car sales or used car sales. So I think it's important that, that message comes across when we're talking to you as well. In the new scenario, in the new normal that we create, we're confident that with the organic growth trajectory that we're looking at in our portfolios and with the enhancements we make in our business through innovation, a bit of selective acquisitions inside and outside South Africa, we believe that we have a very stable business model that we'll be able to ride the storm through to get back to the new normal and to get back to us a sustainable, profitable business with very strong cash flows. Most importantly, all I can say can be worth nothing if I don't have a highly experienced management team, and that's what Motus has, is a highly experienced management team with a lot of deep industry knowledge in South Africa and the rest of the world that we operate in. And they have a proven track record, they're young people and are prepared to make decisions quickly, and they're committed. Because they're all young, they've got a long road ahead of them. They're not retiring in the next 12 to 18 months. And that allows them to behave in a way that make sure that this remains a sustainable business into the long term. And we're very fortunate that we have an independent and a diversified board as well. Okay. Just to recap quickly. I'm not going to go through this busy slide, but just so that you can read it at your leisure. The 4 businesses are the Import and Distribution, the Retail and Rental, the Financial Service and Aftermarket. What's changed in Import and Distribution is that if you look at the percentage of the operating profit, it's 34% of our business. Our total profits came from this division. So very interesting that 1/3 of our profits come from this division. The other important point to note is that this business has over 1 million vehicles in the car park. What does that mean? That means there's potentially 1 million customers that are going to bring their cars into our workshops. Some may not. But even if half of them bring their cars into our workshops, we've got a customer base of 500 million that will bring their cars to our workshops. And this business, the Import business enjoys about a 16.3% market share, which is up from the percentage we had last year. The Retail and Rental, this business has taken a hard knock because of the rental business being there. And obviously, the Retail business being impacted by COVID, and that business generated 14% of our operating profit. Important here is that you'll notice that we have now 36 passenger dealerships in Australia, which was 26 or 27 in the prior year. Again, what's interesting in this, despite the decline, we still have 20.2% market share, which last year was 19.2%. So nice growth in market share in a declining economy. If you look at Financial Services, we're very pleased with this division, we've got 39% of our operating profits from this division. And it's still doing all the things we wanted to do, a, being cash-generative with annuity income. The Aftermarket Parts business. This business took a bit of a knock during the COVID crisis, but it's recovering quite nicely, and I'll talk a bit more about it. And that generated about 13% of the group's operating income. There's a lot of detail there, which you can go through on your own. Okay. So before I get into the divisional presentations and where we're going to, I thought I'll just give you some trading update -- context. But a lot of you have read about this, you know about this. So I'm not going to spend a lot of time in going through all the negative impacts that we have. Suffice to say, that COVID-19 has left no country untouched. It's touched every part of the globe, and it's touched every part of our business. So we'll be naive to sit here to tell you life is okay, life's not okay. However, yes, there's been -- we have economic challenges. We've got a consumer that's indebted. The physical position we know in South Africa is not good, but the rest of the world as well. We know they're printing a lot of money. Unemployment's an issue, especially in South Africa. The rest of the world is still okay. And the political challenges that we go through all the time. Then in the U.K., Brexit created its uncertainty. And then in Australia, the U.S.-China relationship doesn't help because their biggest trading partner is China. Now you can look at the slide and you say, where is the light at the end of this tunnel? All I can tell you, let me give you a few examples of what Motus has done in its trading in South Africa. So firstly, in the month of May, when we only operated for 2 weeks, we sold 6,500 cars, new and pre-owned. In the month of June, when we were still battling with licenses and things like that, we sold close to 8,000 cars. In the month of July and August, we sold an average of 10,200 vehicles per month. So yes, we're all sitting at home, working from home, wondering that with the banks worried about their customer base, who will buy the cars, people are still buying vehicles. So I've given you 4 months now, half of May, I've given you June, July and August. You can see the norm for July and August is landing at between 10,000 and 10,500 vehicles per month in South Africa. If I add on the U.K. and Australia, we'll get to 14,500, 15,000 vehicles. So what happens with that is that it helps the cash ability of this group to pay creditors and not to borrow more and to make sure that it remains a sustainable cash flow business. So that's just to give you a bit of context as to what's happened in our lives during COVID and in the 3.5 months after the first lockdown being opened to us. So if I look at our response, there were 6 -- there were plenty of responses, but we thought that we'll give you 6 key responses to the COVID-19 crisis. And I'll go through a bit more detail as to what we did. So firstly, 2 days before the President announced the lockdown, the EXCO met through teams, and we went through a plan. So already, we were thinking about what do we do when we're all going to be at home, when the businesses are going to be closed, dealerships are going to be closed, what are we going to do? We came up with a plan. So that shows you that we have a young, dynamic management team that's very flexible and very agile. So we completed a plan, already start thinking about issues, what we're going to do about a lot of things. What did we think about? Cash preservation. The model that we've got in our business for the last 3 months has moved the metal. So that was the motto. We had to move the vehicles and the parts, and that's what we've done. And I'll explain to you in a minute how that has happened. Then we looked at all the cost issues in our business, what's sustainable, don't destroy the business but have sustainable cost management. So we looked at all aspects of our business and managed costs accordingly. Then we can manage the cash and we can manage the cost, but if you don't have people, we don't have a business. So what we did, we went in through all the health and safety protocols. We made sure that we started understanding them, and we started issuing communication to all our businesses. Whether you in the parts business, in a dealership or in the office environment, we started giving them protocols as to how they can operate in a COVID environment. Then we started talking more to our stakeholders. We had a newsletter going out every day through -- every week, sorry, to our staff. We were talking more regularly to our bankers. We were talking more regularly to our Board members. We had special meetings, a number of these. And then we started talking to OEMs, and we were talking to you as the analyst and the shareholder community about when we're going to issue more send statements, we went on to a webinar to keep you informed as well. So we increased our engagement. And then we managed all that, making sure that we did not forget that we had risk management as part of the process. So we managed risk management as part of all the above that we did to make sure that we remain within the constraints of risk management as well. So what did we start doing? Firstly, we started looking at salaries within the group, and we reduced salaries between 10% and 20% for people earning above ZAR 250,000. So we didn't touch employees earning below ZAR 250,000 per annum, but the rest of the people, we reduced salaries by between 10% and 20% for 6 months. Then we agreed on no inflationary increases for the financial year 2021. Surprisingly, that we had an overwhelming support that people said, look after jobs, we're happy to earn less. So we had a very good support from that initiative as well. And where government provided relief to employees like the Tourist Fund in South Africa, the Job Keeper Fund in Australia, the furlough initiative in the U.K. We used all that, and we make sure the employees were looked after as well with government money as well. So it's not government money that came to -- it came to us, but we paid it to the employees as well. So we made sure all the applications were done. And wherever possible, we -- the money was given to the employees when we received it. In the process, when you get into a crisis like this, we had to rationalize our workforce. But we were very fortunate that in a business of 18,500 people, 1,200 people took voluntary retrenchment. So they've decided that we're close to retirement, I want to go into other businesses. Some decide to immigrate, some decide to go to farms or go into the coastal areas. So 1,200 people decided to move on; 800 people saw better opportunities, either in their own businesses or they found other jobs; and only 1,200 people were force retrenched. There was compulsory retrenchment, and that was only 1,200 people. So we were worried. We'll have to do a lot more. But the way it worked out that 1,200 people out of 18,500 people, we were very blessed with -- that we didn't have to do more compulsory retrenchments. All those savings that from voluntary and compulsory in the short time that we instituted will result in a saving about 600 million people purely on staff costs. Now as we all know, when a staff member is employed, you'll have a computer, you'll have working space. Those savings will still come through over time as well. Okay. So then we move on. We looked at cost reductions in all the geographies we worked in. We had -- we've deferred rentals, some land owners came to us and said, okay, your increases -- or no rentals for the first -- for 3 months during the lockdown, but you can pay it in January. We'll add on 3 months at the end of leases. So there were a lot of permutations. So we looked at the rentals. We looked at all the cost categories in our business, and we cut that as best as we can without destroying the business. Then we moved on to our capital expenditure. So where there was no commitments or it wasn't critical, we reduced the capital expenditure. Then we canceled our dividend in the interim in March, and then no dividend is being paid in the final now. And we normally pay that in October, so no dividends are paid for the 2020 financial year. We'll review that position for the 2021 financial position -- financial year. We're not doing any major acquisitions since lockdown to the end of December. We'll review that position again in January when we can do better due diligences and we can visit premises. While we were doing all this, we had great assistance from our OEMs and our suppliers. What they would normally do is they'll give you an extension on your floor plans or they'll assist you in other ways. So they've come to the party and assisted us as well. The OEMs together with our other suppliers assist us with postponing payments. So our creditors were deferred. So we paid the bulk of the creditors. Instead of April and May, we started paying in June, July, August, and some of them will be paying right up to October and November, so -- as we sell their cars. So it's not like we're going to find the cash. As you move the metal, you convert into cash, you can pay the creditors with their money. So that was a positive that came out during the COVID crisis. The one business that hurt the most was the car rental businesses. So we had to de-fleet. And we were fortunate that because we could de-fleet those cars into our businesses, we could de-fleet 7,000 to the end of June and we're doing another 2,000 now. So in total, we have already de-fleeted 9,000 vehicles. That brings you down from 21,000 to 12,000 vehicles in that fleet. So we're very comfortable with that. And then obviously, we rationalize some of our footprint. If you asked me, did I close 20% of my dealerships? No. The answer is that what we would do is sometimes we'll swap dealerships, sometimes you'll get 1 address that will get 3 dealerships. So that's what we call a multi-franchising model, but I'll talk a bit more about it when I go through the presentation. So that assisted with the rationalization without damaging the future of the business. Okay. We talked about the business where we're going to, so we thought it's important that we talk about the health and safety and what did we do for the business and its people to make sure that we remain safe and healthy. Sadly, we lost 5 people, 4 in South Africa, 1 in the U.K. to COVID. It was sad, but these things happen in a global situation where these happen. 538 people were tested positive. We're very fortunate that 93% of our people have recovered. And we all know, the average in South Africa is between 85%, 86%. So our average has been better touchwood in the recovery rate. Fortunately, no customers were impacted by COVID on our premises. I mean that can happen, but it didn't happen so far. Over and above that, we've made sure that we've complied with protocols of sanitization in our businesses, offices, parts businesses. We issued masks and sanitizers, all our premises have them. We take temperatures when people get into our business. There's a register. Social distancing is respected and applied in our businesses. So all the health protocols are working. And there's a reminder that goes out to the CEOs regularly to make sure that we don't become complacent. We all talk of the second and the third wave. We're aware of it. And as a result, we try and manage that through communication and making sure that we don't become complacent. You can see the number of each items we procured, the cloth masks and disposable masks and the face shields and thermometers. And we even assisted our African businesses in East Africa with supplies. We supplied stuff from here. And then obviously, there are premises, which could be emptied out because you can't have 100% of the people work all the time. So we had rosters, 1/3 of the people coming in, then another 1/3, then another 1/3. And in some places, we could empty our premises, so we didn't have to service them from a cleaning point of view, from a service point of view. So certain premises will stay empty. But that was in the interest of making sure that staff worked in an environment, which was safe, and there was good social distancing. So we've encouraged that, and we continue encouraging that. Okay. So that -- now that we've talked about the economy, we've talked about the health and safety protocols, we talk about what happened in each sector of our business because of COVID. Firstly, can I just sort out the odometer that you're seeing there in front of you with the 50% impacted revenue and the 40%. That's not per annum. What we try to do there is compare the quarter, the last quarter of 2019 to the last quarter of 2020 where COVID was -- where we were in COVID and in lockdown. So the revenue that was impacted in the last quarter of financial year 2019 compared to financial year 2020 in the Import and Distribution business was 50% and the Retail business was 40%. This is the Retail business of the car business. So that's the impact. Please don't read this as the impact on the year. It's an impact on the quarter. Okay. So what happened? Yes, in April, the car market stumped to 98%. So that means we only sold 2% of our cars. In the month of May, we only sold 32% of the cars that we normally sell as a country. So you could see the impact. And then if you extrapolate that to 2020 calendar year, we'll be at a 30% down. Now that's not 30% down of the retail market. That's 30% of the vehicle market as would be reported to NUMSA. So if you take out the impact of the car rental companies that will take cars from the OEMs, that business could be in -- that percentage could be in the business -- in the percentage of 20% range. So what we're saying to you is that the South African car market could be down by 30% for the calendar year 2020. It doesn't mean it's 30% in the Retail business. It could be between 18% and 20% in the Retail business because the balance of that 10% would have come from car rental, which does not get supplied from the retailer or from the dealerships. It gets supplied from the importer, and it will get supplied from the OEM. And generally, as a rule of thumb, when the importer supply those vehicles, they don't make money on those cars because they make money when the car comes back in 12 months from after it's been utilized in current. It's the same thing with the OEM. So it's not like we lost a lot of money through car rental in the dealership business, it's -- the volumes were lost, but there was -- in fact, the revenue impact would be a bit positive because you don't make losses on that money -- on those vehicles. Okay. So now that happened, and what did we do about it? So like I said, we engaged with the OEMs to help us with creditor payments. We talked to the OEMs about targets. This business runs on targets. If you achieve your targets, you get variable margin. But then we have to adjust the targets downwards to make sure we still give variable income, and the OEMs are very supportive of that. Then they helped us with uninterrupted inventory supplies, both in the vehicle side, in the parts side, in the accessories and in the Aftermarket Parts side. So they helped us making sure we have the parts available. The minute we opened, when customers walked in, we're serving with parts now. We make sure that we were well-stocked to look after our customers during that period. Obviously, the footprint helped as well. The digital platforms that we were working on during lockdown, our people were at home working and watching the leads, watching people's interest and saying, what are they looking at? So when we opened 6 weeks after the first lockdown, our people already talked to customers and say, you looked at this vehicle, how can we help you? And the first day after we opened, we already started delivering cars. So you can see the 6 weeks meant there were no sales, I agree with that. But the minute we opened because we were talking to customers during that period, we could start delivering cars from that first Friday after the first lockdown when there was still only 30% of our people at work. So what that shows you, our people were very positive. They came back, and they were quite excited about to be back at work and to move the metal. Yes, we did reduce our costs in advertising, but we refocused it. Some of you may have got irritated when a Hyundai and Kia and Renault ads and some car ads came up like Toyota and VW, while the President was speaking or the ministers were speaking. That was a deliberate strategy to make sure that people don't forget that these are the brands that people should be looking for. And those advertising campaigns actually worked well for us. And like I said, we're very fortunate with our de-fleets, we could move them to our car rental business, and I'll talk a bit more about that in the next slide. Okay. So on the retail side of our business then, people were ready so we could deliver cars and parts. We're very fortunate in the brands that we import and the retail brands that we have. We've got very good entry-level vehicles. We've got small SUVs. We've got medium-sized SUVs. We've got people carriers and we've got bakkie. So the range we carry in our business is very appropriate to the South African consumer, and that's what helps us delivering to the customers' needs. The footprint that we have, not only in our new car business, but in our pre-owned business through Auto Pedigree, also helps us. So we can deliver a used vehicle to you anywhere in South Africa through the new and used outlets that we have. Auto Pedigree, for example, has 71 outlets. So I can deliver a car for you in Port Shepstone. I can deliver a car to you in Umtata. I can do it in East London and in Cape Town, Johannesburg and Bloemfontein. So that's what helps our business on the pre-owned side as well. The other positive thing that this business has done, together with all the committees that they have on foreign exchange management or currency management, we bought a lot of cover. And Ockert will talk about that right up to the end of March at very favorable rates. So that's helped us having the good cover to make sure that our products are marketable and salable. The multi-franchising model, which is very popular overseas, where you have 1 address and you have 3 dealerships, that concept has now been approved by the OEMs, and we will be converting a number of our sites into multi-franchising outlets. And that helps with the overhead structure. So we -- that will help us with our optimization as well. Okay. This year, we put in a separate slide for car rental. We generally talk about car rental in the same business. We talk about the retail. But this business has been the worst hit by the COVID crisis. So we all know, there's no local travel, there's no international travel taking place, people are traveling less, so the replacement business is down. So this business took the biggest knock. And you can see in the odometer as well that the revenue quarter-per-quarter has dropped by 70%. So that's the new reality. So like I said, we dropped 7,000 vehicles. We dropped another 2,000. We've dropped 9,000 vehicles out of car rental into the Auto Pedigree outlets. Like I said, we've got 71 of them, and they're selling our vehicles. And then obviously, we had to rightsize the operation. So we've closed on 19 outlets. And the workforce has been reduced by 45%. Fortunately, like I said earlier, not all were forced or compulsory retrenchments, we had voluntary and some people found other jobs and moved on. So this business had to do a lot of rightsizing, and I think we've created a new structure, which will carry us through post-COVID. And once we're into a situation where people travel more locally, internationally, and the replacement business takes off as well. So we believe we're ready for the new normal that will be created. We're very fortunate that we've got good insurance replacement business. We've got contracts with a number of the entity -- with the number of insurance companies. That once the people start traveling, that market will be active again. And while all these has been happening, we haven't stopped investing in technology to make sure that in 12 months from now, the customer experience, the way we deliver our cars, all that kind of thing, the way we manage the fleet, we can do it in a better way, less people, more technology and be smarter in running our business. Okay. We look at the Financial Services business, and the odometer shows you that this business was the least impacted by the COVID crisis. You can see the revenue decreased by 10% in the quarter. So 6 weeks, complete lockdown, partial lockdowns for another 6 weeks to get to 30 June. And despite that, a 10% decline. So the management team in the Financial Services business did a great job to hold the ship steady during this lockdown. So what helps this business? Obviously, it's annuity income and the cash generation ability of this business. So that helps. So the other consequence of this business was that we did get reduced income from our financial -- from our JVs with the financial institutions. So that business is taken up. Fortunately, for us, that because the other business is so strong, the decline in the JVs was -- had a very little impact on the profitability of this business when Ockert goes through the segmental reporting. In fact, what we've done for the budgets going for the next 12 months, we've actually put in no incomes from the bank JVs because we don't share in losses of the JVS, we only share an income of the JVS. Okay. So the first response was we extended service and maintenance plans together with OEMs, where we are the importers. So we could extend that. So people that didn't service their cars during the 6 weeks of lockdown could still bring their cars in after the 6 weeks, and we would still honor the periods for the contract that they bought. So that was a very positive. And obviously, this business has continued with its innovation that it's continued with, and that's helped unlock new revenue streams for this business. So going forward, we're very positive still about this business because of annuity income and cash generation. And the investment we continue making technology will help this business create new products and services that the customer wants, and it will help us with our customer retention. Then on the Aftermarket Parts business, again, you understand this business. A bulk of the suppliers were in China, and China went into COVID crisis before us. So we were all worried that will they now not supply. Fortunately, when we went into lockdown, China came out of lockdown, so the factory started producing. So when we opened our stores after the first lockdown, after the first 6 weeks, we had 167 containers waiting at the port to be -- for us to deliver, take up the stock -- remove the stock from the port and then start distributing it. So we had enough stock. So that was a positive thing between COVID impacting different countries at different times. So from -- yes, there was reduced demand, there was down-trading from premium products to more affordable products, but we had the stock when the customers wanted it. And that was a big positive. We were very worried about it at that time, but it was something that we didn't have to worry about once the lockdown happened. So because we were allowed to provide parts through essential services, the taxi industry was a big supporter during that period. The other structure that helps this business is the franchise model. So we don't have stores in every town you can think of. We only have 93 stores. But we have an additional 500 franchisees that make sure that your stock is available to the customer in the rural towns, in urban areas, in parts of urban areas, things like that. So the franchisees then provide the stock to the customers, but the good thing is they buy the stock from us at our distribution center. And because we managed to get the stock in, yes, we are a bit overstocked, but we've got a good availability of stock in our distribution centers. So the outlook in this business we feel positive about, a, we've got the stock; b, the decentralization of our distribution centers helps us because now we can supply stocks in Polokwane, Bloemfontein, Cape Town, Johannesburg, Durbin. We've got DCs there that can supply parts quickly to our stores and our franchisees. So that model is working. And then since the lockdown from 5 to 4 to 3, the demand has improved for parts because people are keeping their cars longer, they need the parts, and we have parts to service our customers. So we're quite positive about the way the Aftermarket Parts business is doing since COVID. Okay. So that's talking about the impact on our divisions. Let's talk a bit about the motor market in South Africa because that's where we're the biggest. So I've broken this up into calendar years and financial years because some of you follow us financially, but NUMSA follows the calendar year. So to avoid confusion, I've given you both the comparison. So what did we do last year? 536,000 for the country calendar and 542,000 for financial. The projection this year is 350,000 to 380,000, and the projection for next year is between 420,000 and 440,000. Don't forget what I said earlier that the decline is 30%, but it's not a 30% decline in our dealership footprint. You must adjust for car rental. So what I'm saying is that we think in our dealers, we could be 20%, 22% down. And going forward, car rental should pick up in the early part of next year. So we've added -- in our projections for the country, we've added a 30,000 number there. We could be wrong, it could be 20,000, it could be 40,000, we don't know. We had to work on how we see the business based on past experience and how we see the lockdowns being eased as we go along. So our projection is 420,000 to 440,000 for 2021. So again, we've got to say to ourselves that in the normal times, this country did 536,000 units. In 6 months after COVID, we can still do it in 440,000 -- 420,000 and 440,000 units. So what I'm saying is that it's not all doom and gloom. The [ Isla ] market that needs to be serviced. And you look at the numbers in financial years, they're similar, which will be 441,000 this year. And the market share will be 20.2% to June 2020. Now what's interesting, if you look at the table below that, that what are our importers doing. And you can see in a declining market, the importers have grown their market share. So you look at Hyundai from 6.6% going to 7%. Kia has done the same thing. Renault has done the same thing. Mitsubishi, a small brand, but a premium brand, but could still hold their own at 0.3%. So the message we're trying to give you here is that, if you sit in the helicopter and you look at this industry, yes, there is a decline, but I think there is still positiveness from where we can grow from. So we've done the correction. And after we get into where we're going to, I think you're still talking of a country that can still do, on average, 35,000 vehicles -- new vehicle sales per month. And I think that's the positive side of this, is that it's not gone from 50,000 vehicles to 0. We still got to sell 35,000 vehicles as a country. And that excludes the exports that we do to the various countries. Okay. So that was all the impacts on the global impacts, the economic impacts, the industry. And now let's go to our financial performance. Despite all that has happened, you can see our turnover is at ZAR 73.4 billion compared to ZAR 79 billion. Our operating income with 6 weeks of no trading, 6 weeks of very little trading, in all the countries that we operate in, we still produced a ZAR 2.1 billion worth of operating income compared to last year's ZAR 3.6 billion. The earnings per share, it's difficult to read a number in isolation. So I'll leave that to Ockert to talk in a lot more detail about the earnings and the headline earnings. The other important point is that, yes, we've had lockdowns, we've had COVID, we've had people not working. Despite all that, this business generated ZAR 3 billion worth of cash, very similar to producing ZAR 3 billion without COVID last year. So we're very pleased the way the management team and the people on the dealership floor and everybody else that works in our business became very focused on cash generation, and this business could generate ZAR 3 billion worth of cash. Very interesting is if you look at our net asset value per share at ZAR 66.53, so that's ZAR 66.53 a share when we're trading at half of that. So you can see that this business is very strong in its asset base. And why is it strong in its asset base? We own the bulk of our properties. We've got stock. Intangible assets are only ZAR 1.5 billion in our business. So this business is made up of hard assets that you can touch and feel, and that's what gives us a very strong net asset value because of stock and because of the properties that we own. So with underlying, we've got a very solid asset base. The other ratio that we're very pleased with as management is the net debt-to-equity. Last year, we did 56%. This year at 60%. So if we can manage our cash that helps manage our debt, this ratio proves that. Then the bank covenants. You can see both these covenants, which is net debt-to-EBITDA at 2.2x and EBITDA to net interest at 3.6. We've complied with bank covenants because the limits are 3 on either side. The one is below 3 and the other is above 3, but you can see we're well within those covenants. So at June, we're looking at these covenants, and we're saying we've complied. We were very worried when the first lockdown happened. But since then, it's worked out well. And our retail market share that we all worry, are we selling cars? Yes, we're selling cars, and we have a 20.2% market share in this country. And last year, it was 18.9%. So we're very pleased that market share grows in a declining economy. Okay. Now that we get into detail, I'll ask Ockert to take you through the financial overview.

Thanks, Osman. So during June, we had to issue a sense and give the market a guidance of where we believe we would end at the end of June, which was probably quite a difficult task with all the uncertainties around COVID not quite being sorted out yet. However, we're quite pleased to report now that we, in fact, remained within that whole guidance that we gave the market during June. And in fact, we're pleased to say that we're right at the upper end on the positive side on all those ratios. I think Osman has highlighted some of the items in here, but just to put it in perspective where we are from a revenue and operating profit perspective, we are down 8% on the revenue side. But as you can see, it's clearly that if you missed out on the whole of April, half of May, I mean 8% is effectively 1/12 in any event. So that is the revenue that we've lost out on. Where it did hit us a lot harder was obviously on operating profit. We've got a large cost base. You couldn't immediately reduce costs to the same extent when your revenue dropped. And I suppose the reduced sales volumes did have an impact. We had slightly lower margins, not much, but there's certainly been a shift in the last while towards more entry-level vehicles, more affordable products. And also the secondhand car sales have certainly have impacted that margin a little bit as well. We have reduced on the car rental income, as Osman already explained. And all of this was offset by some of the cost containments we already put into play during the months of May and June. But that will continue into 2021 as well. A line that obviously we'll draw attention is that net finance cost, it is impacted by IFRS 16 on the leases. Not that much of an impact, that's ZAR 152 million. The opposite end of that is, of course, within your operating profit was also slightly higher with ZAR 120 million. But overall, IFRS 16 didn't have such a dramatic impact on our business, as Osman already explained. We own most of our properties. Then also on the interest line, what really did hurt was that we were sitting on higher average working capital during the year, and it was probably something that we needed to correct. Whether or not COVID even happened, we would have had to reduce our working capital towards the end of the year. Now no COVID here can be without its fair share of pains. And the numbers we showed on the previous page up to the operating profit, obviously, excludes some of these one-off costs that did hurt our business. The first one was around retrenchment costs. I think Osman explained in a lot of detail already that there were earlier retirements then in voluntary and compulsory retrenchments. And in value terms, that amounted to ZAR 171 million. We do believe that these savings will be achieved in the new year with the reduction in our employee numbers, and that would be roughly ZAR 680 million, and that's an early projections. On our goodwill, other intangibles and then also on the property impairments, this was a year where I think we all had to sit back. We had to review through a prudent lens, exactly where we were on intangibles as well as on our properties. We certainly used a much higher WACC when we were reviewing the asset values. Previously, we're using just about 5%. This year, we used 8.1% as a WACC rate, and that was quite a high hurdle. But despite that, the overall intangibles on our properties were actually not that high. It was only ZAR 100 million, and that compared to a total asset base there on our properties of about ZAR 7 billion. So you can see, we didn't have to make a huge amount of impairments on the property side. On the goodwill and other intangibles, I'll just briefly touch on what they all relate to. So the South African operations, ZAR 116 million. The bulk of that was an intangible asset relating to our Renault business. Within Renault, we've got, obviously, long-term distribution there. But looking at the cash flow projections and what was happening with COVID, we felt it prudent to reduce that intangible that we're sitting there of ZAR 107 million, and we impaired the whole ZAR 107 million. In the U.K. operations, we already have indicated that number before. In the month of December, we already impaired the U.K. operations by ZAR 60 million. And then there was a further ZAR 28 million that we did towards the end of the year. That mainly related more to a Brexit environment. As you can hear, the ZAR 60 million was done way before COVID, and you would see that we have already taken the actions required there. There were no impairments in the commercial side, apart from ZAR 13 million in the Mercedes taxi operations. And the rest was all in the passenger side of the U.K. operations. In Australia, a bit of a story around that one. So I'll just touch on that. What happened in Australia is we did have a major acquisition in the month of February. Directly after the transaction happened, unfortunately, Holden decided to withdraw from the Australian market. One of the operations that we did purchase was Holden, one of the dealerships. And the whole amount relating to the Holden goodwill was, in fact, impaired, and that relates to this ZAR 85 million that you see on the screen. We have instituted legal action against Holden in some respects, actually, misguided us and what their intention was in that country. But that would be a lawsuit, it will take a couple of years still. And we have not raised the contingent asset to that effect. So all of that was expenses that we've taken all the way up to the profit before tax line. The number there on the right-hand side relating to the deferred tax asset. That's deferred tax asset, it was sitting within one of our subsidiaries. It was in Renault. And we also impaired the full deferred tax asset. If you look further down on the income statement, you will see that the effective tax rate looks very high. Obviously, the -- all the items we've just previously explained in the previous slide, obviously, had an impact on this effective tax rate because the impairment of your properties, your goodwill, intangible assets, all of those would not be tax deductible. And then obviously, we also had the deferred tax asset write-down of ZAR 107 million. Going forward, we believe that the effective tax rate of 26% to 27% will remain. On our earnings per share and the headline earnings per share, obviously, impacted with everything that we've already said during this presentation. I mean, the reduced trading activities, the one-off costs, all of those were taken on the headline earnings per share impact there. So you can see only ZAR 2.96, 71% down. It was a slight benefit from the repurchase and cancellation of shares during the year. And if we get back to a level where we believe we have sufficient cash again, we will certainly reembark on that share repurchase strategy, which we unfortunately had to stop off way through this year. These slides talk a little bit around what Osman explained earlier around the diversification of this business and how you can see certain elements that are performing well in 1 year and then maybe slightly weaker in the next. But this is part of the dynamic of how we actually run Motus. So being only in the automotive industry, I think this integrated model and the diversification, you can clearly see us, help us to actually withstand even the test of time that we've just been through in a COVID environment. And you will see how those shifts have happened during the year. Hopefully, in the following year, you'll get back more closely to our 2019 pattern where we believe that the retail and rental should do its fair share again. On the segmental slides, we have already touched a lot on this during -- how we -- how it was impacted by COVID and the responses that we've taken. So I'll just highlight 1 or 2 points as we go through this. It's more included for completeness sake and also for our users to just make sure they've got the salient numbers in front of them. You can clearly see that the import business was less affected. And on the financial side, it actually still held up in that second half of the year. It still made close to ZAR 400 million profit. Despite COVID, it was able to move the vehicles through its centers. And during the month of June, it certainly has already bounced back. Operating margin very high, and that was largely due to the fact that we were able to get our price increases through while we had favorable forward exchange contracts in place. And then Osman did speak about the market share. Now a question that always comes up is, what is this looking going forward? Because obviously, a big risk that we run within the importer business is the fluctuation, the volatility of the rand. I'm pleased to say that where we sit at the moment, we've got a very dynamic treasury department where we review ForEx on a continuous basis. We've got monthly committee meetings chaired by myself. And as you can see on the screen there, we're actually fairly well placed up to March next year at ZAR 16.80 to the euro and a ZAR 15.70 to the dollar. We've actually got sufficient cover to withstand the pressures that we will face around price increases for some time. Certainly, we will adapt to what the market conditions is and competitive pricing will increase. We do believe there's quite a bit of inflationary pressure that would be in the market. On our Renault side, there, we share a 50% of the ForEx with our other shareholder. And that's the way they supported through a dynamic pricing adjustment. You can see there at the bottom of the slide, how the shift is starting to take place, and this is probably going to be quite different in the 2021 financial year where in the 2020, we had about 23% of car rental channel, and that will reduce in the first 6 months of this new year and then probably only pick up in the second half. Retail and rental, by far, the biggest COVID impact. If you look at this whole segment, you could see there that the operating profit line for H2 got completely decimated there. But once again, it was really April and half of May. During June, even this business started to holding its head high again, and we were able to trade out of it. As Osman said, the message was clear, we needed to move the metal. There was a big cash preservation drive. And maybe on the profit side, we had to give up a little bit to make sure we move all the vehicles. But at the same time, this has certainly turned around already towards the end of that year. On our operating profit decline, I mean, the vehicle market contraction, obviously, is a big impact and then the slightly lower margins. But I think the biggest impact here that we could see is there was a massive overhead base here and that needed to get trimmed. That has now been trimmed. You could see from the staff numbers and also on our footprint. And that will probably put us in good stead for the year to come. More detail around the specifics around car rental and also on the South African retail market. I don't really want to spend too much time on this, I think it's already been covered well. I think on the car rental side right at the bottom, you can see this division has been rightsized by de-fleeting 7,000 vehicles, and you'll see that theme carrying through to the balance sheet when we talk about it now and also the closing of those 19 outlets. In the U.K. and Australia, also well covered already. But you can see there that in the U.K., they obviously had the issues around Brexit way before COVID even started, and the passenger market were really the one under pressure. However, our commercial business is actually performing very well. So even during COVID, obviously, the amount of commercial vehicles that needed to service that market increased. And the U.K. as a country by itself does require a lot of commercial vehicles to deliver goods. The -- that market has remained strong even throughout the whole 6-month period. And we're pleased to say that the issues that we did have in that Merck commercial business seem to have changed. Our fortune have certainly changed by some changes in management there. On the Australia Retail, tough market, volumes were also reducing. And then we have just spoken about the discontinuation of the Holden brand. It affected us in both Traralgon as well as in Ballarat, and we would have to replace that with a new dealership going forward. Financial Services business, very good performance. There's nothing more you can say here despite -- and I mean, we have spoken about it just now about the bank JVs. Profits, it wasn't there. You look at this performance year-on-year, ZAR 937 million versus ZAR 931 million. This business just ticks over. And it's not by pure luck, I think it's by design. We obviously have to continuously evolve, reenergize this business. The amount of technology and innovation happening in this part of our business is really high. And every one of you, we've met the team there would agree that the only way you stay ahead of the game here is by continuously evolving. Just recently, we've launched the Discovery. There was a collaboration with Discovery. We have launched a new warranty product as well. So you can see how, from a banking side, from the insurance sector side, they all understand what this business -- what makes them tick. This is with very good telemetry information with very good databases to actually make sure we increase the value proposition we have for our customers and to find solutions for our problems going forward. So very pleased to see this number still staying there at ZAR 931 million. Aftermarket Parts, very defensive. So as much as we talk about new vehicles, where this market is going to, worried that people may actually not repurchase new vehicles and they drive their own vehicles for longer, playing 100% into this aftermarket space. This is the defensive method we need there at the end. The glove, just to catch it all. And we would see that this business is probably setup well for this future financial year as well, where we do believe that vehicles will be driven for longer periods and that replacement cycle will actually go out a bit. We haven't been able to get all the traction that we wanted. Obviously, through the lockdown first in China and then in South Africa, we've not been able to get all the full benefit in the Chinese business that we've also set up at the DC on that side. So we do believe that some of the cost reduction benefits will only be achieved in the 2021 financial year. On the balance sheet, statement of financial position, not that much that I really want to highlight. I think we've already proved that what's in these businesses. As you could hear, there was a conservative lens put to them. Goodwill, property, all standards in its rightful place, the right-of-use assets, obviously the IFRS 16 adjustment. And maybe the 1 line there is just the vehicles for hire. And just to explain what has happened to that, that is obviously our car rental fleet. You can see the number last year was ZAR 3.4 billion. What did happen is between June 2019 and December 2019, the vehicles for our number actually increased. It increased to about ZAR 4.8 billion, and that was servicing the car rental market. Now it normally goes through a bit of a cycle and then there would be a de-fleet towards the end of the year. But what happened and made it unique in this year is during March when the lockdown started, we realized that we had to de-fleet a lot faster. We had to move those vehicles into our car rental businesses, and effectively, it will land up in stock. And you would see that our vehicles fire actually reduced compared to the prior year. And that is despite vehicle inflation increasing the value of those vehicles. So those 7,000 vehicles that we've de-fleeted between March and June to get our cash flow right is all being affected there. If we look at the working capital by itself, you can see that the inventory is higher. One of the factors was this de-fleet, as we just spoke about. And then obviously, it was also impacted slightly by some of the acquisitions that we've made. Are we currently overstocked? If you look at that number just by itself, you would agree that there's probably still a little bit more that we can do there. We probably overstocked by, let's call it, ZAR 2 billion. But once again, it was also financed to some extent through the floor plans from suppliers. So that number should probably come down by $1 billion as well. So is there a bit of upside in the -- on the working capital in the next 6 months? The answer is yes. Will it settle by the end of September? And the answer is probably is as well because it just needed a little bit more time to really sell yourself through the cycle of de-fleeting, which was much more accelerated than normal. On the rest of that slide, I think we'll take questions on that. Core debt. I think when we spoke in June, we were worried. Were we worried about cash flows? Of course, we were. What happened in April? Revenue got completely depleted. We had to rush out, talk to the banks, got them all on site. And during that period, they were very supportive. Both our local and international funders gave us extensive lines. I mean, all our liquidity was always in place. They gave us relaxation on the covenants. But come towards the end of the year, you see we ended up with a core debt, and that is the bank debt of just under ZAR 6 billion. Now where were we in March? Because, I mean, that's almost where the comparative lies. So in March, this number was way over ZAR 7 billion. And in fact, in December, it was close to ZAR 7 billion. So you can see that in a period where trading got actually almost halted during April and half of May, how quickly we were able to trade out of that position and get to a position where we ended at the end of June. And speaking to the numbers that Osman showed earlier, if you take that core debt and you now compare it against your equity, it's currently still sitting now at only 60%. And that is in line with where we were even a year ago, and that is without COVID. Our floor plans from financial institutions as floor plans also creditors using bank facilities that were made in play and then the lease liabilities related to IFRS 16. And then we get to that contract liabilities, which is the service and maintenance plans. And I know some of the analysts try and break their heads always around this number. That is the plans that we receive. So when we sell a plan, we get the cash flow in. This is the other entry, the creditor, which gets used within the next 3 years when those service and maintenance plans run out. So as you can see, that number didn't really change much year-on-year. And if I can refer you back to that financial services slide, when we had the segments, you would see that their profits will remain intact. So it wasn't as a result of this service and maintenance plans being depleted within your balance sheet to give you the profit. In fact, they remained. So we've added as much into the future, but as what we've taken out. And it's just a point that I wanted to make across. Obviously, a huge focus on cash preservation. Like we already said in this last period, we're very pleased to show that. I mean after our working capital and after we've paid the interest and after we've paid the taxes, our free cash flow generation was over ZAR 3 billion. And that equates to your free cash flow of about 74% of your EBITDA. So I'm very pleased with the free cash flow that we achieved during this period. We did not give it all away on CapEx or on vehicles for hire. As you can see there, we're still right at the bottom. We had a reduction in our debt, in fact, year-on-year on the cash flow side of ZAR 500 million. When you look at the balance sheet and you look at the cash flow statement, it's sometimes difficult to reconcile the debt movements you've got. There's a lot of noncash flow items in them. And this slide is more for information sake there, so you can actually have a clear indication of exactly what happened on your balance sheet. So that's the first part. Movement year-on-year on your balance sheet. But if you strip out all the noncash items, that is what you get to your decrease in our debt per the statement of cash flow. So the gearing, we already spoke about, we ended up at the 60%. And if you take that through the time, and you can see even there from unbundling, we were roughly at the 63% all along. We've always maintained it. We want to try and remain within the 55% to 75% range. And we're very pleased that we've actually been able to remain even during a COVID year, which, at one stage, looked like it was not to be. But reality is we were able to get even our gearing into a very good state at the end of the year. On our facilities, like I said, the financial institutions gave us that relaxation on our covenants. In fact, they gave us the relaxation that we could go all the way up to 4.5x. So it's -- going to 3% is actually times. So we were on the covenants. We could get to 4.5x. And as you can see, we ended the year at 2.2. So still plenty of headroom left there. In fact, we will probably engage with the banks to get rid of that covenant going forward. Now we don't need that relaxation any longer. Also on the interest cover, enough headroom there. And if you look to the right, you can see what's that unutilized banking facilities. We've got massive liquidity still in this business. That was never an issue. Even when we asked for that relaxations, it was never a question of running out of liquidity, but more a question of making sure that you didn't trip yourself up through a mathematical calculation. Unutilized bank facilities, including the floor plans, is ZAR 7.6 billion and unutilized bank facilities, excluding the floor plans, even. So that is just pure funding requirements. We can actually go and draw ZAR 5.8 billion as we stand today. And most of the debt is of a long-term nature, and our debt is also fixed to some extent. I think we were quite likely to have some variable in there as interest rates have actually reduced. So in a natural income statement, you can see profitability returned already during June. So despite the headwinds we faced during that period, on the balance sheet, net asset value were above ZAR 60 a share. So you can see that the balance sheet is sound, and the cash flow and cash generation was all there. So that's it from a financial aspect. Osman?

Thanks, Ockert. Thanks for going through the financial numbers in a lot of detail. So we still want to keep a sustainable business. We still got to do everything we do. We still got to live in the communities that we do. So what have we done? Obviously, we make sure that we operate in an environmentally conscious and responsible way. The FTSE4Good Index, we continued with that. We've got 3.8 out of 5. The target is 4. Then what we did, we raised a loan offshore called the sustainability-linked loan for GBP 120 million. And what that does is that as we improve our usage of water and electricity and we do the sustainable issues, we can reduce our interest rate. So that was quite a positive thing, and that's managed very actively by the Social and Ethics Committee meeting, and they make sure that we're going in the right direction so we can start benefiting from the interest bill, A. B, making sure that we behave like responsible citizens and watching the water and electricity usage. The other initiative that we haven't stopped investing in is the resource centers, which we will call libraries. We've invested now in 45 liabilities in total. We touched the lives of 50,250 learners, and that's done in partnership with Imperial, and that's why it's called the Imperial and Motus Community Trust. So we continue investing there. We haven't stopped that initiative. And the target in the short term is to get that to 50 resource centers. So what happens is that we would put up -- we get building sometimes, we refurbish them. We put in between 6,000 and 8,000 books, and each library will get either 1 or 2 librarians that are on our payroll that will be paid by the Community Trust and not by government. So we control the process, and we have close to 86 people in our books there. The Unjani Clinic is a rural community and township project, whereby we empower nurses and health care workers to set up clinics in townships and rural areas, and we've got more than 70 at the moment. So people in the community don't have to go to town centers, spend $300 on a taxi. In the community, they have a well-structured network of health care workers that can look after themselves. Then as far as COVID is concerned, we've contributed ZAR 4 million to the solidarity fund. And again, this wasn't the company money. This was savings that we reduced salaries of the nonexecutive directors, the executive directors and staff members, and we contributed ZAR 4 million for that. Our 2 importers, Hyundai and Kia with their vehicles, together with Beekman Canopies, they've distributed vehicles for free to Gift of the Givers; FoodForward South Africa; SANZAF; the Alex community; the Beeld Children's Fund; and RADA, which is also an NGO. Mitsubishi then helped welfare organizations. Hyundai assisted with equipment to hospitals with PPE and sanitization products. They've donated that free to the government hospitals. And in the U.K., they were quite involved with providing vans to assist with community projects. So despite being business win, focused on what we need to get to, we didn't forget the community we've come from, and we contributed with community projects. Then if we look at where do we want to go from here. So we just try to give you an overview of the strategy, which hasn't changed since the last 2 years we've unbundled. We will continue driving innovation and technology, and we used fancy words there. But to give you the 1 example that Ockert's talked about, so if we talk about leveraging existing and enter into new partnerships, that was what the Financial Services team did, is develop a product called the warranty product. They developed it for Discovery, and Discovery now sells that product to its customers, which is far larger than the customers we would have in our books. So again, develop a product with an institution and then sell that product into its customer base. So those are the kind of things that we do for our customers and our new customer base. And then over and above, they do those products to be sold by them, the Financial Services business as well. So they're very creative, innovative young people that are looking at how to leverage technology. We're adapting to the changing environment. So it's not only the EXCO, the executive management, that's young and dynamic. If you take me out of the equation, the average age of our executive management team is between 45 and 46. And that allows them to work with their young teams in their businesses to make sure that they make decisions quickly, they're entrepreneurial and they respond to change much faster than you'd get older people like myself, making changes to it. So we're very fortunate and I'm privileged to be having a team in our businesses that's very agile and entrepreneurial and that quick thinking. Because of the footprint we have, the market shares we carry in South Africa with the biggest motor business in South Africa, we want to continue with our market leadership in South Africa and to remain competitive. And in the U.K. and Australia, we'll remain competitive as well. I can't say we're going to lead the market. But in South Africa, we want to lead the market. But in the other areas, we want to remain competitive as well. But all this doesn't happen without people. So we make sure that we invest in our people. We work on change management. And we make sure that we're empowering our people to make decisions, we provide training. And over and above that, it's a big focus in our Nominations Committee, which is transformation and succession. It's a big issue in our social ethics meetings. So the Nomination Committees will look at my direct reports. The Social and Ethics meetings are focused on transformation and succession to 2 levels below me, and they look at the group as well. So it's a big focus in our group with nonexecutives looking at this and guiding us through the process as well. And then ultimately, we do all that for what? To deliver stakeholder value to our shareholders, to our investors, to bankers, to our people, to the suppliers. And most importantly, we don't forget where we came from. So we make sure that our socioeconomic initiatives are doing well and our employment opportunities are looked after as well in the process. So again, a holistic approach, very -- driven by the non-executives through the Board, through -- driven by the executives through the executive management committee and then driven by sub committees of the Board and the executive management to make sure that we deliver on a holistic business approach and not a 1-dimensional business approach. So again, it's very focused on the whole business, rather than 1 facet of the business. Okay. We've taken a bit more time of yours than we thought. So I guarantee you, this is the last slide that I'll talk to. So both Ockert and I have talked about a strong balance sheet, which he'll talk about financial position. But when I was trained, it was still called the balance sheet. But now it's called a financial position, statement of financial position. So with the strong balance sheet and the strong cash flows that we've talked about, we have a very good foundation on which to build. Together with the very strong management that I talk about, that agile, entrepreneurial and a management team that respect integrity 24 hours a day, we have a very strong foundation to prepare this business for the new normal that is ahead of us. Yes, we believe that COVID has impacted our economy, has impacted our people, has impacted our business, but a new normal is arising. And we've prepared our business so that we can trade profitably, responsibly and make sure that we can scale this business up as the need arises. So we've prepared the business for the new normal after COVID. On the future trading side of the business, I'd like to have given you percentages. But unfortunately, with the uncertainty that we have, the best I can give you is that we anticipate much improved operating and financial results. Much improved, meaning that the growth on 2020, we're saying that we're expecting better results in 2020 -- for June 2021. In the environment we're operating, subject to stable currencies and touchwood, we don't have further lockdowns like we've had in April and May. Because of the strong trading and the strong cash that we had, and Ockert emphasized this point, but I thought I'll reemphasize it, we envisage -- we will remain within the original bank covenant requirements. And that was a big worry for us when we went into lockdown. And thank God, with what's happened in the market, with the management team, with the suppliers and with our customers, we've come in well within those bank covenants. For the long term, we are optimistic about our growth trajectory, and that stems from the integrated business model, the solid platform I've talked about in balance sheet, cash flows and people. And we believe that has all created a very sustainable and resilient business model that we can be proud of when we sit here in 3 years from now, we can still talk to. Yes, it's disappointing that we couldn't pay you a dividend in the interim and the final for the 2020 financial year. But by the safe token, COVID was not in our business plan. But we're hoping that if all goes well and we can manage our cost base and manage cash flows, we will start reviewing our cash-paying position. Before I go into thanking the people that I've outlined there, I'd like just to say a special thank you to the executive management team who have helped us significantly manage during these difficult times. We've managed the difficult process of preparing audited financial statements, together with the dedication from Ockert and his team. The -- Ockert is the CFO of the group. Together with him and the accountants in the head office and in the business, we could get a clean audit within the time limits of reporting results within 3 months of our year-end. And then to report these numbers and still get an unmodified audit opinion is an achievement that we can still do that. A special thank you to the Investor Relations team under Justine's leadership that we could produce all these numbers and slide. And then a special thank you to Phumzile Langeni, who's worked with me at Imperial and now at Motus. We shared the platform on the Board together for 16 years, and she's decided to spend more time in the businesses where she's, in some places, acting as executive person, Executive Chairman or Executive Management. So she needs to spend more time on that. And we wish you all the very best in her new endeavors. And again, I'd like to just emphasize that this could not have happened without the support of every member of our staff, our customers, our suppliers, our funders, our stakeholders like yourself, the non-executive directors on our Board under the chairmanship of Graham Dempster that we could ride this difficult storm in unprecedented and very, very difficult times. So thank you to each one of you for your support. That's why I could present results like this. We thank you for your support. And lastly, but not least, is that we'd like to thank the best [indiscernible] team for making it possible for us to use their premises and talk to you, utilizing technology to the best of their ability. So to the best [indiscernible] team, thank you for allowing us to use your premises and to make this presentation possible. To each one of you, thank you for taking the time to listen to us. We say thank you, and hope we can talk in the future by talking to you personally and not through a computer screen. Thank you, and goodbye. Justine, before I move on, there must be some questions that you want to bring to my attention. We don't have much time. I think we've got 10 minutes left. So we've overran, but hopefully, we can still take 1 or 2 questions.

I'll highlight the key ones that have come through. And then if I can just ask if there are any further questions that haven't been addressed either through the presentation or now, if you can just send an e-mail through to me or we can discuss them through the individual road show meetings. Okay. First question, please, can you provide additional detail around Motus' inventory levels and whether there are concerns around oversupply?

Thanks, Justine. So we're very fortunate that, yes, we may be slightly overstocked, and Ockert talks about ZAR 2 billion of overstock. But we're fortunate that this is a very good product in vehicles, which are salable, which are parts salable. So whatever we have is tangible. We've got about ZAR 2 billion worth of stock in total. But already, that number is coming down. When I look at the stock levels at the end of July and August, the number is coming down. I look at my Aftermarket Parts business, that numbers are coming down because the sales have held up. So the ZAR 2 billion at June is already coming down to about ZAR 1.4 billion by the end of August. And we think by the end of December, we should get back to what we'd like to be. The other area of stock is not only new stock, it's our pre-owned stock through the de-fleeting that has come from car rental into Auto Pedigree. And that business is selling between 1,100 and 1,200 cars per month. So come the end of December and by end of January, February, that will return back to its normal. So because there's no more de-fleeting taking place, so all we need to do is to make sure we sell what we have. And by end of December, January, we think we'll be back to normal at stock level. So we're very comfortable that we prepared ourselves and the business for the new normal.

Can you please provide some more insights into the trading and profitability during July and August across all divisions? And how does a trading for the first 2 months compare to prior year for the same time period?

Okay. So we're very fortunate that most of our businesses, and I say most, which will be about 85%, 90% of our businesses, are operating at good levels. The trading is much better in July and August. Then if you take the quarter of May and June, we've got much improved levels. And when I'm comparing it to last year, the decline is not material. The one area of our business -- and that's why I refer to 80% and 90%, the one area of the business that's going to take longer to create its new normal will be the car rental business because there's still very little local travel. Local tourism and international tourism doesn't exist at the moment. So that's the part of our business that we believe will only start coming right from January next year when we see more movement of traveling, local and international tourism. However, because we've reduced that base from 21,000 cars in end of September, we should be at 12,000 cars. We believe that the cost base will be reduced significantly. The reduction of the sites and the reduction of the people, that is going a long way to creating a new normal for this business, and that's why we're very confident that, yes, we overstocked in Auto Pedigree because of car rental. But with the trading that is currently taking place, we believe that the new normal in car rental will be ready in January 2021.