Motus Holdings Limited (MTH) Earnings Call Transcript & Summary

Good morning, everyone. Thanks for joining us this morning on this webinar, where Motus is presenting their 6 months result to December 31, 2020. As we all know, this year has been a very, very difficult 6 months because when we all got into lockdown in March 2020, we thought this is a 3-month or 4-month problem, not realizing that 11 months later, we're still very much in the swing of COVID crisis. And I think we must all look forward to another year where we're going to be very much in the COVID crisis. So this has become the new normal, and that's what we need to adapt to. So thank you very much for joining us this morning. We've got a number of items on the agenda. So you can see we're going from the business model, into the reviews, the segment reviews, management's responses, strategy, financial highlights, and then we talk about some issues affect our business, our people, and then we'll talk about prospects after that. This presentation is on our website as well. So if you're going to follow it there. And after the meeting as well, you're going to refer to things, you can go to our website, and you'll have all the information. Okay. The first slide is the resilient business model. I'm not going to go through all the items. You've seen this before, and it's exactly what you saw, and it's on the website. So you can see our key business model structures that we have and why we -- a successful business because of these 7 strategic points in our business model. This is our business. Basically, you've got the Import and Distribution business, the Retail and Rental, Financial Services and Aftermarket Parts business. You know it well by now, and you know the details. What's interesting is if you look at the last line in the various bubbles is that we're starting to get to a normal dispersion of our profits. Especially in the Retail and Rental section, if you looked at that number, the 39% of group profit, that was a very much lower number when we spoke to you the last time. But this is the kind of number we would prefer, which is about 20%, 22% in Import, Retail should be close to 40%, Financial Services is about 25% and Aftermarket Parts, we'd like that to be 15%, so this is a better structure of our business in terms of way the profits are generated. So that just gives you an overview of our business, but you can look at the detail on our website. Okay. So now, what we thought we'll do is we just tell you -- just to refresh your memory on the trading update. I think the dilemma between the COVID crisis and the economic remedial plans is going to be with us for a while. Because on the one side, we want to get the economy back up to speed. But on the other side, the COVID-19 crisis created its own issues, it creates a lockdown. It creates a mutation of the virus and all these cause problems. So there's no guarantees as we sit here, we're going from level 3 to 2 and 1, we could go back to 4, but no one knows that. So we just got to all try our best and work hard at keeping the virus under control and try and move our lockdown levels down to 2 and 1. If we look at the challenges that we face, and these are not South African challenges. These are global challenges, and I'll come to South Africa in a minute. So if you look at the economic outlook, that remains challenging, whichever economy you're in, you're going to have this problem. As a result of that, the consumer and the investor confidence is depressed, deteriorating financial position. I mean, that's for all the economies we operate in, especially South Africa, and that's why we're going to be watching with interest this afternoon the budget speech, and we'll see how that goes. I don't think so there's going to be fundamental changes, but hopefully, there are some positive news, there's some positive news that comes out of that. High unemployment, we saw the figures yesterday again. Unemployment in our countries at its highest. But what was interesting that if you look at the last 6 months, 2 million temporary jobs were created as well. So on the one side, you look at unemployment figures high, but the positive side is there is some activity in the economy with 2 million temporary jobs being created. We're all hoping that those temporary jobs become permanent, and that will be all good for us in the economy. There's political challenges in all the jurisdictions that we operate in. Yes, there's reduced disposable income. And the added problem we have in South Africa, this is a South African problem, which is the onerous regulatory requirements. We've got AARTO coming at us, we've got POPIA coming at us and the Right to Repair. I'll talk a bit more about Right to Repair. But what I'm saying is that on the one hand, you're trying to run your business during a crisis, high unemployment, a difficult economy to operate in, and then you get legislation on top of that, and that's what takes our business that much harder. And we should have taken a bit of a backstep on the regulatory requirements until we got out of COVID, but unfortunately, all the deadlines looked like July 1 this year. We're hoping that with the work that we do with NAAMSA, NADA, the Road Freight Association, SAVRALA, all those bodies will have some say to try and get these regulations postponed for a while until we get back to a new normal. Moving on to South Africa. We create -- we score our own goals. I mean, you know these things quite well, but I just list them there, the corruption, the political uncertainty, local elections this year, wasteful public expenditure, you can see how much we've wasted, not only in PPE but in other expenditures. We're not spending enough money on infrastructure investments. SOEs like SAA, Eskom, Danelle, Transnet, have their own problems. And then obviously, the most important thing currently is the vaccine rollout, and that's slower than we thought. We're all hoping that we can pick up the speed, so we can get a decent vaccine rollout before our winter comes in May and June. Let's hope we can get a lot of vaccines going by that time. Then if we could look at U.K. I mean why we're saying this projected delay job cuts is that in the U.K., they have a furlough process that means where the government pays you for not being at work for up to GBP 2,500 a month. Now that will come to an end, I would imagine, by end of March. And when that comes to an end, there could be some job cuts that could take place in that environment. No one is sure how many job cuts, but that's the kind of information that's available. And then as far as Brexit is concerned, yes, the deal is done. Thank God, there's no import tariffs between the EU and the U.K. However, borders, paperwork, backlogs, that's creating a new problem for the trade between the EU and the U.K. and I think it'll take another year before the paperwork settles down, and the blockages on the Board has settled down as well. In Australia, I mean, it's a very affluent economy, very prosperous economy. However, there's trade tensions between China and Australia, and China is Australia's largest trading partner. So the tension is not healthy, but I'm sure the politicians will work through that. And within a short space, they'll get through that process. Okay. So that's the economy we operated in. And what is management's responses to this new environment we find ourselves in. So on the left-hand side, I just give you the bullets, the highlights. And on the left-hand side, I'll give you a bit of detail. So if I don't go through all the detail, you can read through that in -- on the website. The first point is the flexible and agile management. So you saw that when I reported the year-end results last year in August, and you look at it now, and you're saying that this is a business that came out with the starting blocks quickly. They manage their cash. They converted their assets into cash, and they watch their cost structure. But that didn't happen because the people took instructions from the center. We've got a very agile and a flexible management team where the average age is 45 years old and started running this businesses as if they were running their own businesses and started making quick decisions on what to do. So that's created to the management we have that runs our businesses have done a great job in being agile and flexible. Added to that, we've kept all the disciplines that we started during the first lockdown, the cost structures, maintaining the tight expenditure, not only on cost but with capital expenditure as well. And I think all those disciplines are still alive and well. But we emphasize the word sustainable because you can cut the cost too deep and then damage client service, damage our delivery process. So we were very cautious when we cut cost to make sure we don't damage the business model. And I think the management in the divisions did a great job to keep that going and finding the right balance. And then obviously, the key driver in our business, which is we're very heavy on inventory, which is cars. And then we were heavy on car rental de-fleets that came into the dealerships, and we managed to convert those car rental de-fleets into cash. And that's why this group could generate ZAR 4.8 billion worth of cash. So those are the highlights and then a bit more detail on what actually happened in the businesses. So obviously, we adapted our business to the new conditions. So we were very aware of our environment we're operating. We adjusted accordingly, scaled our business activities to the new norms, which in rough and ready terms, is about 80% pre-COVID, so that's what we had to do, except for car rental, which is at about 50% of pre-COVID, because of the lack of traveling and the lack of tourism and things like that. The one area we haven't slowed down in, which normally you would do in there's less cash and less money is innovation, but we've continued with that and that's been one of our highlights is that we've adapted to the new environment we find ourselves in, and IT has played a key role with our salespeople, communicating with customers, working from home, the accounting people, the admin people. So they continued working, but the innovation shown by the people and the innovation going forward is still very much top of mind. And we talk a bit more about that when I go to one of the Financial Services division. In the business, the key differentiator for us besides management is the integrated business model. So as you would all know that we just don't buy and sell cars, we import cars and parts. We sell new and pre-owned vehicles through our dealerships. We service cars. We sell parts. We have a car rental business that has about 20% market share that generates used cars for us. We have a financial services business. Again, we don't sell -- provide funding to customers, but we sell value-added products. And then we've got the aftermarket parts. So the integrated model is what kept this business on a firm footing to deal with the challenges of the declining economy. And that helped us with having a comprehensive offering, which customers have started buying down on, which is new vehicles, they went for entry-level vehicles. They went for small SUVs, medium SUVs. The pre-owned market has picked up very nicely, and I'll give you some numbers in a minute. The parts business, the Aftermarket Parts business, obviously, they've changed their focus from premium brands. They've gone to private label brands. And obviously, they're looking at the lower end at the moment. And our financial services and our workshops have been quite busy with rendering services as well and communicating with customers. Yes, we had the products, we had the services, thank god on the other side we had a strong customer base and we could meet the demand of the customer base in the form of pre-owned entry-level SUVs and parts obviously. On the cash side, we have managed our capital expenditure quite well. We set out doing this in March last year and controlled with those disciplines. And we have managed the capital expenditure well and that’s why we could generate the cash we did. Like I said we sold our de-fleeted vehicles and we were very fortunate from the inventory point of view, that, when we went into lockdown, China came out of lockdown, so their factories started producing goods. So, when we came out of lockdown, we had enough stock. The containers had arrived, the vehicles had arrived and we had enough stock in the aftermarket parts business. We had enough vehicle stock to sell to customers. So the timing of the lockdowns worked in our favor, with different parts of the world were in lockdown at different times, and that worked in our favor. So what did that all do for us? It pentad our revenue and our profit streams. And obviously, we generated fantastic cash flows in the last 6 months of our trading. We continue with some of the other management responses that we had to do, obviously, active engagement with our key stakeholders. We focus on risk management processes. And we've put this year for a reason, and I'll talk a bit more about it, so you can understand that we couldn't give up on managing our risk. The risk profiles had increased significantly in our business. And the most important people in our business are staff. And obviously, we have to enhance our staff-wellness programs to make sure that yes, we bought well. We had the stock, but we needed people to execute on strategy and we have to focus on our people to make this all happen. Okay. So if you go to our communication, we maintain great relationships with our OEMs, with our suppliers, our customers, and we kept that going. And in the first 2 months of the lockdown, a lot of this was done from home. So the guys kept that initiative going and once they got back to the office, not all of them got back, but those that got back and those that working from home continued with these initiatives. With Ockert and his team and the treasury team, we've continued the communication with funders and investors. We made sure that there were regular communication with bankers, there were regular communication in our SENS, in talking to U.S. analysts and investors regularly, we continue with that. And to make sure we don't forget the most important people of the Board and our staff, we continue talking to them. In fact, with the staff, I personally communicated with all our staff on a monthly basis, and we virtually doubled our communication with Board members to make sure they were in the loop and make sure they provided us with guidance and leadership in these very difficult times. It's the first time that I talk about this combined assurance model. I sound like an auditor. But it's important that we talk about this because the COVID crisis has created additional risks. It's created business risks. It's created a bigger risk in the car rental business. It's -- the risk for fraud has doubled because people are feeling stressed about their financial situations, and fraud is a big issue that we need to deal with. And then with people working from home, not under normal environments, cyber risk became a big issue in our lives. So we had to adjust our processes in terms of risk and implement compensating controls to manage these added risks that arose in our business. So that's why I'm talking about it because COVID, yes, it affected the economy, but it did affect the risk profile in our business. And obviously, we had to improve our compensating controls. On the health and safety protocols, we adjusted our business model, so we were very aware of social distancing in the office environment, social distancing in our stores and our dealerships, sanitizing, masks and making sure that processes, like, for example, when you got your key back, we had to sanitize that. When we had to sanitize your vehicle, we had to make sure that plastic sheetings were on the seats, our people sat on plastic sheets and not on your seat covers, things like that, and we had to change quite a bit of that, but that has now become second nature in our business. Like I said, you can have the stock, you can have processes, but people make this all happen. So we introduced wellness programs. We had wellness programs, but we had to put a lot of urgency into our wellness programs. We did additional deals with consulting companies that assist with physical, mental and financial wellness and they're visiting people and talking to people regularly. We had to adapt our workplace for people with disability. We started a campaign and talking to people about their disabilities because everyone identifies with disabilities as either you're on crutches or a wheelchair or you got one arm, but there's a lot of disability that sometimes, when you look at a person, you don't know. For example, if you've got eyesight problems or you've got hypertension or you've got other problems that are not visible, people don't talk about them. So we're talking to more about our staff about their disability, so we can adjust our paces, adjust our plans accordingly. So we understand the disabilities of our staff. And the flexible work arrangements, that's continuing in a varied basis between the businesses, for example, our Financial Services business, only 10% to 15% of the people are coming on a rotational basis. The balance are still working from home. The dealerships are more or less getting to where they need to get to, but we're very conscious of social distancing. And there are plans in our stores and the distribution centers to make sure that not all people are there all the time and creating problems. So we've adapted to a new norm. So all these additional risk management processes, communication has assisted in us developing a sustainable business environment. So that's why we had to do it to make sure that our business is sustainable for the future in the new environment, and that's what helped us during these times to develop all these processes for the future. Okay. So that's on what management did and what did the market do. So you can see what happened in South Africa. South Africa sold 536,000 vehicles in 2019. And in 2020, we sold 380,000 vehicles. So you can see that COVID had a major impact in this industry. A big part of that decline was also in the car rental business because, as we all know, that international tourist, local travel was down and even local tourism was down. So you can see how that hurt this industry. If we look at 2021, our projections are 425,000 to 450,000. Now that looks like a major jump. But in the projections, we put 30,000 additional car rental units into that because generally, the car rental businesses fleet up in July, August, September. If all goes well, I think car rental companies will buy more cars. And the industry will buy more cars, and that's why we've projected a bigger increase from where we were in 2020, not only from the man in the street but we've added additional car rental vehicles, and I'm sure government and single unit, which we call will also increase as well. So that's our projection for this financial year. Then if we look at our import businesses, which is Hyundai, Kia, Renault and Mitsubishi, you can see that our market shares have grown quite nicely. We had very agile management. We had good products in Hyundai, for example, you can see from 6.6% to 7.8%. That's fantastic to grow your market share like that in the time of the crisis we're going through. Kia held it very well from 3.4% to 3.5%. Renault came down, and we didn't get enough units from Renault at the right prices. So we had to keep this business afloat, but the product range was limited because of limitations and pricing, but we were still very pleased that we could hold our market share at 4.3%. And the lineup for the next 12 months looks much better, and we're hoping we can grow that 4.3% to at least 5% into the next 18 months. And Mitsubishi in the current environment did quite well to hold their market share. We talk about controllable market share, and I just want to explain that. In the import business, we're very big in passenger vehicles, SUVs and light commercials, we don't sell heavy commercials and medium commercials. So the area we control is passenger and LCV. And when we compute our market share, we look at how many LCVs and passenger vehicles did the country sell. We take what we sell, and we compute that as a percentage. That's why we talk of controllable market share. Just for your interest, out of the 425,000, 450,000 going forward, only about 20,000, 22,000 of those vehicles will be HCVs and MCVs, which is heavy and medium commercial. So we're still very much a business of 90%, 95% of passengers and LCVs as a country. Motus is in the privileged position that we still hold 20% of our market share, which was what we had last year. We still sell 1 in 5 cars in this country, which is a record we wish to hold and improve on. Okay. So that talks about the markets what the industry has done. So let's bring it closer to home now to our divisions. So what we've done here is we've just broken up the retail division a bit more. So firstly, we talk about Import and Distribution. The retail, we've broken up into South Africa, U.K. and Australia. Because when you in the retail business, the 3 business have the same business model to operating. And the rental business is slightly different. So that's why we split the slide up. I'm not going to go through every bullet point on my right-hand side, but just some of the key ones that -- I've highlighted some of them, but just to emphasize them. Obviously, retailing is our bread and butter, retailing cars, retailing parts, our workshop services, financial services and retailing aftermarket parts. So retail is in our blood. So our retail strategy has made sure that we enhanced the customer experience throughout the vehicle ownership cycle. So I'm talking of the ownership cycle that covers every aspect of our business. So that's why the people in the import and the retail business look after the owner because we know the owner, then by looking after the owner of the vehicle, we look after the parts in services and financial services with it as well. Yes, the market is down buying, but our brands have been very privileged to have the vehicles, which are entry-level vehicles, small and medium SUVs to sell into the market. So the customer demands were met by our dealerships. We'll grow our parts and services business as well because we know our people are talking to the customers all the time. We're managing costs quite tightly with making sure that our cost structures are well managed. And as we do historically, forward cover is the bread and butter of the import business, and they try and manage that with the group guidelines that we have and they're very rigorous in their processes. And the ForEx committees are chaired by Ockert personally to make sure that the divisions are complying with group policy in terms of ForEx, because any mistake or errors in the forward cover can be a major mistake because we buy 10 million, 20 million worth of euros and dollars at a point in time. So we make sure that, that is well managed. And Ockert personally supervises that by sharing the ForEx committees. We want to grow the preowned market share, and I'm just trying to give you a bit of a stat, so you can understand what I'm talking about. In the 6 months to December, Motus sold 80,000 vehicles in 6 months. The split of new and pre-owned in that period was, we sold for 41,000 new vehicles and 38,000 -- 39,000 pre-owned vehicles. Normally, in the Motus business, if we do 1 new, we do about 0.6, 0.7 pre-owned. This year, at this time, in the 6 months, we virtually came to 1:1, 1 new to 1 pre-owned. And I remember the Late [ Bill Linj ] always telling me that the ideal in the motor business will always be to sell 1 new and 1 pre-owned. And we've come very, very close to that number. We are very privileged to have the car rental vehicles coming into our pre-owned dealerships, and we managed to sell them. So that gave us some very good stock to sell. So that's why that Motus could sell 80,000 vehicles in a time when we thought there was very, very little activity in the economy. We didn't see too many roads -- too many cars on the roads, and we thought life is coming to a standstill. But yes, the economy has been active, people have been traveling and we managed to sell 80,000 vehicles in 6 months. We continue with rationalizing our dealership footprint, and that's been a great success for Motus. Why is it a great success? Firstly, if you look at our pre-owned vehicles, we have over 70 outlets called Auto Pedigree. They operate throughout the country. We can deliver cars for you in Umtata, in PE, we can deliver in East London, [indiscernible], Cape town and every part of our country. Then we have 250 dealerships that sell new and pre-owned vehicles. Again, fantastic footprint. Then we developed Motus Select, which sells pre-owned vehicles, but again, their range is much broader than the Auto Pedigree range and broader than some dealerships we have. So they've created a new profile for pre-owned vehicles that -- for people who want a larger variety. So we continue rationalizing and changing things to make sure our businesses remain relevant to the circumstances. What does multi-franchising mean? That means that you have 1 address, but you could have 3 dealerships in that 1 address. Let me give you an example. If you go to [indiscernible], if you went to [indiscernible] 3 years ago, you'll find 1 Mercedes dealership. If you drive there today, you'll find the same Mercedes dealerships got 3 dealerships in it. We put in partitions, signage, branding and modify the workshops. So in 1 address, what have you got, you've got Hyundai, Kia and Mercedes, new and pre-owned. You go to Rustenburg, same thing. You'll find Hyundai, Kia, Mercedes, new and pre-owned. Polokwane, you'll get a different mix. So that's what multi franchise. It's -- multi-franchise had worked well overseas, especially in the Australia and the U.K., where it became the norm. In South Africa was a bit slow. But we've caught up now because we got OEM approval to do that. And now we're exploiting the multi-franchise model to make sure where we have 1 address, we can run-up to 3, 4 dealerships from 1 address. And that helps you with the economies of scale, it helps you with your costs, and it makes sure that we give the customer variety in 1 address. So I think that's quite a fundamental change that's helping Motus develop and refine its business model. As far as acquisitions are concerned, we only do bolt-on acquisitions. And the reason we do bolt-on acquisitions, for example, if you look at our business in Ballarat, which is about 100 kilometers from Melbourne, we're sort of -- we're short of Toyota and we’re short of Ford. So if those 2 come about, we'll buy it because then we've got the full range. If you look at Traralgon, we're short of Toyota, and we're short of Nissan and Ford. So we get that, we complete the representation. Similarly in the U.K. We're strong. We've got Vauxhall, we've got SEAT, we've got Skoda. We've got Hyundai, Kia. We're missing a few VWs and Toyotas. And if we find them, we'll add them to the regions we're in. So again, they are bolt-ons. And in South Africa, we do the same thing. The multi-franchise model I've just spoken about. But for example, we've just added [ haval ] to Kempten Park, so that will give us another bolt-on dealership in our existing footprint. So that's what we mean by bolt-on and improving our brand representation. IT has become a big part of our lives because we know people like to do a lot of their work in their homes and their studies, IT helps us. And obviously, we're working very hard to making our IT platforms, very user friendly, like the motus.cars, have spoken about and I'll talk a bit about later. We're looking at developing software that will help us with quick valuation of pre-owned vehicles and make our trading processes much quicker and efficient, and that will come online soon in the next 2 to 3 months. So we're quite pleased with the work that we've done during COVID on that. I've talked about the brand representation in the U.K. and Australia. Something we don't talk about in South Africa is the electric vehicles and the hybrid vehicles. Now South Africa will be a bit slow because of our electricity problems, infrastructure and costs. In the U.K. where there is government subsidies for electrical vehicles and hybrid and Australia, and they're starting to developed a very good charging infrastructure where you can charge your car as you go. That side of the business is growing quite nicely. When Ockert and I were in Australia, we could see how we spent money in charging these vehicles in our dealerships. We drove into parking lots. We could see where these cars can be charged even in the U.K. So that side of our business, we've got some good product in Hyundai, Kia, BMW, Mercedes, Nissan, Toyota, Ford. All of them have got these products. So we're quite pleased that in those jurisdictions, we've got the product for our environmentally friendly customers, and we'll exploit that opportunity. South Africa will come, but it will come a bit slower because of our infrastructure and government support. As we all know, the car rental business has gone through a lot of strain because of lack of tourism and lack of traveling and things like that, and that business has dropped by half. Despite that, what we've done, we've continued investing in technology because when we return to a new normal, we're going to need better IT in that business. For example, when you get to the airports, the IT is going to be very efficient. When you return your car, when the accounting processes, your invoicing takes place, all those processes are being modified as we speak. And in the next 24 months, we believe that the money we're investing now will give us a good return on our money in the next 24 months in terms of processes and not only accounting but business process well. We talk about adapting the vehicle rental model. What we've done there is we've de-fleeted net of 8,000 cars. We said 10,000, but 2,000 cars were put back into the rental fleet. We de-fleeted 8,000 cars. We canceled 19 leases, restructured our overhead, our people costs, our advertising, all the operational costs were revised to bring our business to 50% of pre-COVID. So if we continue at this level, we find, if it grows, it's easy to grow the car rental business from 50% to 70% because we put more cars in, we've got the infrastructure, and we will employ more people. And the people are available and well trained. So they on standby it to bring them in, and we can bring in 100 people very easily in this business. So we've adapted the model, and we are ready when the business starts increasing as well. Okay. So then we go to the other 2 businesses, which is our Financial Services and our Aftermarket Parts business. The financial businesses, as we know, is an asset-light business. It's a people and IT business. It has no real assets. And they've continued operating during the various lockdowns, 5, 4, 3 because 85% of the people were working from home. They could work from home and they could continue servicing our customer base from home because it's an IT heavy business. So they could talk to their customers, put specials on the table, continuously make offerings to them, reminding them that their cars need servicing, things like that. So they've used IT to its fullest, but they continue investing in IT to make sure that the new automated trends that we have, they meet the requirements of the customers. They're big into fintech development. That means developing an IT, they're leveraging relationships and leveraging relationships with financial institutions. For example, the discoveries of the world, the outsurance of the world, the sun lums, the centric, the hollards, [indiscernible] of the world, to make sure we're partnering with them on various products, so they can sell products to their customer base, just not our customer base. And the joint ventures we have with banks as well. We're exploiting that more now than before. Financial Services division houses our innovation hub. So that's where they come up with new ideas, new ways of doing things. Changing the culture of our people, the way we think and operate in our businesses. And it's not limited to the Financial Services business, but they're trying to change the culture of the group. So they have guest speakers, they have webinars like we're having. They have products, but they develop them across the businesses, and they get the businesses involved to make sure that innovation remains top of mind. And Kerry Cassel, who heads up that division together with the IT team, communicates with all the ExCo members and make sure that the development is not confined to her business only, but across the Board. So there's some great initiatives coming out of that innovation hub. And they've linked their innovation hub now to topics where we do executive development program, for example, with Henley or GIBs or Southern developer in businesses, they take all these innovations and the topics, and then they exploit them in our development of our people as well. So they're getting some good learnings coming out of that as well. We look at our Aftermarket Parts business. This is a business that sells parts and accessories to cars that are outside warranty. To give you some perspective of the market sizes, South Africa has 12.5 million cars on the road, only 2.5 million cars are under OEM warranties. So there's 10 million cars that the aftermarkets parts business can access for parts and accessories. So you can see people think we only sell cars and we only service cars through our dealer network, but this business looks after cars outside warranty and that is 4x bigger than the cars in warranty. So that's why we're very focused on this business. We're growing our footprint. We're growing our distribution centers in China. We've got 1 in Taiwan. We've got 1 in China. So what does they do for you? So you buy, well, with the right safety procedures in place to make sure the products we buy are safe. You buy quantities in China, you store in China and then you supply South Africa on a needs basis. And that makes your supply chain very, very efficient. So you don't sit all this -- with all the stock in South Africa, you sit with stock in South Africa that you need our hot sellers and bread and butter. The slow sellers can sit in China where rentals are cheap, cost of managing that business is much cheaper. We sit -- in fact, our 1 location in China sits in a port. So it's -- once it's ready, you can put the container onto a ship and it will go. So this business thrives on footprint. Optimization of your supply chain, strengthening its efficiencies, the business processes, making it’s IT smarter, buying well through good buying groups and managing your inventory well and expanding the product range. So that means -- what does that mean in simple terms? That means we can give you a spark plug that's NGK, [indiscernible], we can give you a private brand middle of the range. And then we can give you a cheaper range of spark plug, where you're not interested in the warranty. If it lasts a year, it lasts a year, but there is a market for that, and we're exploiting that range as well, and that's why we're keen to expand the footprint. So we cover South Africa in premium products, in private brands and in the cheaper end of the product. And that's what will keep this business very relevant and service the 10 million cars that are on the road. And we're very focused on this business to grow it even further. Okay. So that's all the economy and where we -- what has management done and what does our business do. And what did we deliver to you? We've delivered ZAR 44 billion worth of revenue, which is 6% up. The point that I want to make to you about these financial highlights is remember H1 of 2020 was no COVID. This was a normal trading period. H1 of 2021 is in the midst of COVID. So the team at Motus in South Africa, the U.K. and Australia have done a great job in holding this business to those H1 levels of 2020. So you can see the revenue has gone up by 6%. Operating profit has come down. I wouldn't be too concerned with that because when you're in a business of restructuring, like the de-fleeting, your big saving comes in the interest burden. So that's when you see the profit before tax coming up 4%. So you can see, yes, we've managed our costs well. And Ockert will talk in a lot more detail about that, but the important thing is, look at the profit before tax. That's where we manage not only the costs, the depreciation, but we manage the interest as well. And that's why you get that increase of 4%. And because of that, you can see the earnings per share went up 6%. The headline earnings up 2%. And the headline earnings, as we all know, for the accountants amongst us, that all the one-off items get excluded, so that gives you a fair reflection of how we're operating this business. And that went up 2%. And we're pleased to announce that with the cash that we have and the stability that we have in our business we've declared a dividend of ZAR 1.60 per share, and we will watch this space again at year-end. But this is a good starting point, which is about 30% of our HEPS. Moving on. What else did this group achieve? We've generated ZAR 4.8 billion worth of cash. That was converting our car rental de-fleets into cash and then converting our inventory into cash, and that's what this group could generate. I just want to caution people that want to take data multiply it by 2, it doesn't work like that. The second half we'll be using some of this cash and Ockert will talk about why we're going to use this cash and how. So please don't take 4.8x to and say, that's what this group can generate. Listen to Ockert out when he's presenting his financial results as well to see how that number will look like. We're pleased to report that, yes, the return on invested capital has improved to 12.8%. The weighted average capital has gone up. Yes, that happens when your borrowings come down. Despite that, you can see that our return has grown by 3.5% for shareholders. If you take your return on invested capital, reduce it by the cost of working capital, there's still enough return for the shareholders. So the shareholders would be pleased that there was a reasonable return for them in a difficult time. Like I said, the net to debt equity is 24%, but that's not the new normal, the new normal, we believe, will be below 50%, but this was the one-off we managed to do, which we're very pleased with, but now we have sufficient fueling our engine to do some good strategic initiatives that we wanted to do. The net debt to EBITDA, that's come down very nicely. It needs to be less than 3x. We're at 1x and the EBITDA to net interest at 3.7x, it should be more than 3x but if you do the 3.7x over a 12-month average -- of a 6-month average, you take 6 divide 2, we'll give you a much better number, but the banks use a 12-month average, and that's why you'd get that number. So overall, if you look at the environment we're operating, the management actions we've taken, the results we've delivered, we are very pleased with these results. But Ockert will now take us through the details on the financial overview. Thanks, Ockert.

Thanks, Osman. I think as Osman said, all the strategies that he spoke about in the end, you have to look at the scoreboard. So I suppose we are very pleased with the results that we can present to you today. Some very hard work by the operational teams in delivering that result in very tough economic conditions. So you can see that revenue improved by 6%, and this is despite the new car sales, as we've just spoken about, has reduced. So you can see, especially the new preowned after pre-owned vehicle in South Africa, but the new and pre-owned international operations helped us to achieve the 6% growth. And we also had a very improved result from our Aftermarket Parts division. They certainly benefited from where the market is currently moving to. And it was offset, obviously, by the lower car rental division. I think that's a trend that will continue probably for the calendar year 2021. On the operating profit side of things, it is a bit misleading, as Osman explained, that the car rental part of the business, obviously not reflected in there. And you only get the benefit further down the line if you look at the interest line. But overall, I suppose if you move more into the pre-owned space, there is a little bit more pressure on the margins. And you will probably see that also continuing for some time. Depreciation, also a lot lower, but that is due to the car rental and the vehicle for higher balance that's less. If you look further down the income statement, you can see that big benefit of regard on the finance cost line. It really gave us a big kicker. On the one side, we obviously had to reduce that big inventory that we were sitting with in June. That's just after the de-fleet of the car rental, and we were very successful in selling all those vehicles through our pre-owned dealership network. And as you can see, that gave us a very big kicker on the lower debt levels and a massive benefit on our finance cost line. We have not necessarily realized all the benefits there yet because we are still paying on a fairly high interest line, and that is because of our fixed to floating debt levels, but that is something that we can still improve and work on. On the other net costs, that's mainly relating to foreign currency losses, may be frowned upon, but the reality of those were related mainly to Renault, who at the end of December, not adopted the effective hedge accounting method yet. So all variables did go through the income statement. That is a line that probably will not have such big fluctuations going forward. Income tax still roughly at about 28%. And you can see our total attributable value for shareholders, up 4% at ZAR 928 million. Turning the page over to earnings. As I just said, that's up 4%, but the real number year would probably be your headline earnings per share. If you start looking at those, obviously, there was a bit of a benefit in repurchasing of shares. We did continue with those during the year as well. And you can see the numbers there for yourself. But obviously, very opportunistic when our share price were trading as low as 42 range. We were able to purchase roughly ZAR 100 million of shares at that price. So that certainly did give us the additional benefit as well. And obviously, on a weighted costing will give us a benefit in the future. And Osman already explained that we did the site is a clear dividend of ZAR 1.60, that's roughly 30% of our headline earnings per share. If you look at the revenue, you will be surprised, and I know the market was quite surprised when they saw the results initially. That we're actually back to those levels, as Osman said, pre-COVID. And if you look at the revenue line, in fact, higher than what we were in H1 2020. Obviously, on the back of selling a lot of those used cars. But I think the big number really is, if you start looking at the profits, and you see that we've completely bounced back where we were from H2 levels on a profit before tax. Obviously, we were in a loss even at that H2 period. So as you can see on this slide, it nicely depicts the 6-month periods from 2018 all the way to 2021. You can see that's a stability that comes through from the operating profit and the profit before tax lines. And hopefully, that's something that we can continue into this new calendar year that we're faced with. A little bit on the segments. Osman spoke quite a lot around it already, so I'm not going to spend too much time on these lines. You've obviously seen exactly what happened on the importer business. They will be impacted with foreign exchange as well. In that regard, we do have foreign exchange going all the way out to August and September for this year at rates of ZAR 18.80 to the euro and ZAR 15.19 to the dollar. There has been a marked move in way they are selling their vehicles too, a lot less going to the car rental business. As you can see, that only 11% of our vehicles, in fact, went to car rental and the balance went to our dealership channel. And the dealership network, very strong at this point in time and have really performed very well. The retail side of the business performed well despite the economic headwinds that we're faced with. We were certainly protected to some extent by the good work being done in our imported dealers, the Auto Pedigree, which is mainly used vehicles. And then our U.K. and Australia businesses that perform very well. Obviously, a lot less impacted by the COVID restrictions, so they were able to sell quite healthy volumes still in those environments, and the margins also held up. A question that may arise is that you had this acquisition in Australia, is that where all the profits came from and the revenue? The reality is it didn't contribute that heavily. It was only ZAR 560 million on the revenue line. And then obviously, the big impact that we did see in this division would be around the car rental, which is obviously a lot lower. Reduced workshop activity is affecting us at the moment. I think the fact that people are traveling less. You do see that a little bit of pressure on our workshops, and that's also been 1 area where we had to cut costs and continuously to monitor that. A little bit on the South African operations. Don't want to spend too much time on this. It's already been discussed. So I think you have experienced most of this. Maybe just on the car rental, you can see that the utilization levels there were quite low at about only about 59%. That is on average for the 6 months. So we obviously started July, August at very low levels. And it did pick up towards the end of the year as local travel started to come back into the market. And we've also now find the new level of where our utilization should be with a reduced fleet, and going forward, that number should be a lot higher than the 59%, which should turn this business back into a better operating profit position. In the U.K. and Australia, as I just said, they actually performed very well. The U.K. business, operating profit were 87% up on prior year, obviously, very highly affected in the prior year around Brexit. This year, we have seen, despite, like I said, some COVID restrictions that applied. We did see the commercial business doing very well. So a lot of those activities that you've seen within the U.K. market where people still require delivery of goods to their houses and their place work continued, and that commercial business is really performing very well in the U.K. passenger, we have seen the registration month in September benefited us. So it was maybe a bit of a pent-up demand, and we'll see how March plays out, which is another registration month. So the U.K. on an operating profit level performed very, very well. Australia, almost surprisingly, performed much better than the prior year. I think here, they were obviously less impacted by COVID. You would have seen that they had very little restrictions over the period. And their biggest concern is probably not a profitability question, but more running out of stock they do get their stock supply from Thailand, which was a little bit more impacted by restrictions. And so product supply has been a bit of a concern there. But at the same time, then you -- obviously, it's all around the supply and demand, so they were able to generate a lot higher on the margin line. It's a very good business at the moment and that Ballarat acquisition is performing very well. Financial Services, probably one of the businesses affected quite heavily. If you think about COVID and restrictions and where it's going to. But as you can see there, this is a business with massive annuity income streams despite all the headwinds, despite not receiving any bank JV money at the moment, you can see that they are still holding their own. And when we talk later to the balance sheet, you will also see there wasn't a big depletion of our liability line there, we keep the provisions for the service and maintenance plans. That contract liability is still remaining relatively the same level as it was in the prior year. Aftermarket Parts, probably the star performer and are stable at the moment. As you can see, again, up against prior year, 8% on operating profit. Definitely, we're one of the winners in the way the lockdown happened and the way we were able to generate profits through that distribution center in China, having it seamless into South Africa and getting the right product at the right time. And they have also been able to reduce their fixed cost base during this process and is giving us an operating profit margin now, again, in excess of 7%. And that is despite this market actually going to lower end products which normally gives you a lot less on the margin line. So you can see the cost initiatives have also played a part. Moving over to the balance sheet or the statement of financial position as we call it now. Not too much to really report here. 1 or 2 of the lines impacted by exchange rates, something like goodwill and intangibles, mainly reduced to exchange rates and not much else. You can see here that the vehicles were hire from June to December, they didn't really reduce that much. But if you compare it to the prior year December, you would have seen there was more than a ZAR 2 billion reduction on that line. Obviously, all the vehicles for hire socket we de-fleeted prior to June. That all ended up in our inventory lines. Our net working capital was very high at the end of June. And this is really where we generated all the cash from, is reducing that working capital from the ZAR 8.5 billion down to the ZAR 4.1 million, which you will see on the cash flow slide. A little bit more on the working capital, which I'll leave you be taking by yourself. Moving over to the debt and where we sit on that. So you will see that our core debt obviously reduced in the same vein as we were talking about the working capital and the vehicle fire that's reduced. We also use less of the floor plans that we have availability from our financial institutions. Obviously, this all plays a part around reducing your interest line, and the cost of funding on those are slightly different. But obviously, all those lines still available to us. Moving over to the cash flow, and this is probably the 1 slide that everyone wants to look at. A very good news story for us there. As Osman explained, then take it now suddenly, this is the new norm. You can see we obviously generate a huge amount of cash through the working capital lines. And now you -- obviously, the next question would be well now you're sitting with this money, how are you going to spend it? I think our capital allocation is still the same conservative approach we had before. Obviously, we're in a different cycle now, but we need to also plan for the future. We do know that car rental will eventually return, whether it's in this financial year's spill or maybe only towards the end of the calendar year. So that's something that we will plan for. Over and above that, we will assess opportunities and acquisition opportunities as they present themselves. Obviously, at the moment, we are unable to travel. So anything on the international front is highly unlikely. However, on the local front, we have reviewed a few opportunities. Nothing however is satisfied that it will give us that additional return on investor money at the moment. So we haven't had any major acquisitions, the only 2 smaller ones was the amount that we bought, the minorities out that in Australia, there's a 10% additional minority that we brought out there. And then we are in the process of finalizing the transaction with Renault, which will have an outflow of about ZAR 250 million. But we can watch the space around technology. I think there's a lot of opportunities probably coming our way. Maybe just the last bit on the cash flow. Obviously, the 1 item that I mentioned earlier that didn't give us a bit of a kicker as well was the repurchase of shares as you can see on this slide, wasn't a huge amount in rand terms, that we'll spend on it, but it does give you that benefit on your overall headline earnings per share and your earnings per share. So that is something that we will still continue and, and for the rest of this financial year, if share prices are respectable levels, we will have a look at that as well. If you look at this overall gearing, I think Osman spoke to you as well, we didn't really expect to suddenly get down to a level this low at about 24% net debt to equity. And just to be clear, this is as a percentage. So if you have it as ratio, you will have ZAR 20 debt for every ZAR 80 of equity that you've got. So it is at a very low level. It is a slight misnomer that it can remain here. We do note that working capital levels should increase probably by about ZAR 2 billion between now and the end of the year. And then over and above that, you will see that with the fact that we will be paying dividends as well will have an impact on it. However, it is a good level to be at, certainly makes life a lot easier when we speak to the funders. And we are in the process of refinancing some of our debt arrangements in that regard as well. Overall, I think the net debt-to-equity target range still remain, however, at about 50% to 70%. Speaking of the facilities, massive facilities that we've got available. And during this whole COVID process, probably the 1 thing that we did realize is we do sit with a lot of facilities. Never once were we outside of liquidity we always had enough liquidity, enough finance lives to tap into, even though we had to ask advance stage for a relaxation of covenants, we never use those. And we, in any case, back to the covenants is of being below 3x and our net debt-to-EBITDA and over 3x for your interest cover. Both those covenants fairly comfortable at those levels. And as you can see, there's a huge amount of unutilized banking facilities, whether look including or excluding floor plans. What I was speaking about around our arrangements is we are looking at maybe looking a little bit around what is fixed, what is floating to try and get more benefit out of the floating lower interest rates at the moment. And then I would like to hand over back to Osman.

Thanks, Ockert. So if you look at these innovation slides, you think we're doing very little. However, we're only putting 2 slides on for innovation. There's a lot of work behind the scenes. But we thought we do a bit of a marketing job with you as well to tell you what motus.cars is. It's a new IT platform that when you go into 1 platform, you can look for new and pre-owned vehicles. You can look at -- look at new vehicles from 23 OEMs. That means you don't have to go to every OEM's website like Mercedes, Toyota, VW, Hyundai, Kia, you can find them in 1 place, and you can find pre-owned in 1 place. So you can choose the car you want, once you've got the car, you can complete your application form. Once that is done, you press the right buttons and then we'll prepare the car for you, and it will be ready -- ready for collection at your nearest dealership. So this was a fantastic innovation that we started. It's come through now. It took a bit of time. COVID set it back by about 3, 4 months, but eventually, we got there and it's working. And this will help us as part of the journey towards the future of IT platforms being utilized effectively. So that was just 1 example. The next one I've talked about, which is Motus Select, again, destination for pre-owned vehicles, but a wider range than Auto Pedigree. And again, we'll grow this platform as we go along and make sure that we tackle the customer of the future by wanting a variety of pre-owned vehicles. Okay. I'm sure you've read about this, and you're starting to wonder how does the Right to Repair impact our business? And is it the end of our workshops? Is it the end of the motor business as we see it and it's none of the above. Firstly, what are the guidelines. The guidelines coming in fact July 1, 2021. They -- what's their purpose, they want to include previously disadvantaged people, small and medium-sized enterprises. They want to create more transparency about value-added products. That means when we sell them to the customer on the floor or on call centers, they want a bit more information, which is not a problem. They perceived high barriers to entry. And I call it perceived, and I'll tell you why. A motor business by nature is high in capital expenditure because you need a site. Either you're going to buy a property or you in to rent a property, and that's what makes it expensive. And once you've got that, then you need to get the equipment, you need to get the people, and then you can service customers. So we're going to try and make it cheaper, but the high barriers to entry are not something you can wish away. They're not going to change overnight. And the other thing is that, remember, if Motus has 320 dealerships, you add our competitors to that, you don't change the infrastructure of the dealership business. They've got very mature businesses and the platforms to service our customers. There will be focus here on transformation, which we will focus on as well. The OEM should ensure entry to the sector is not constrained by existing long term. So what they're trying to avoid that, if for example, you have an agreement as an OEM with a panel beater or a part supplier, anything, these shouldn't be longer than 5 years. So it's just making that -- so people can't argue over a 10 year agreement, I can do nothing. They're trying to manage that. And they want the dealership appointments to be transparent in objective. So that's not new. We do that all the time at the moment. So both whether you're a Motus OEM or you're an independent motor OEM, we do all that at the moment. The intention to allow non-original parts and to the independent service providers, which we call ISPs to service in-warrantee vehicles without automatically avoiding them. We do that already. But I think there will be added checks and balances to make sure that the processes that the ISP follows are robust to make sure that they don't nullify their warranties, and there will be more processes in play. But again, not new. It's happening at the moment. The OEMs need to increase the accessibility for technical information, training and parts. I'm a bit surprised that they put that in, but it's happening at the moment as we speak. So that's what the guidelines objectives are. What are we doing as Motus? Remember, we manufacture nothing and we don't set the standards of anything. We follow standards that are approved by the OEMs. Either the local OEMs or Hyundai, Kia, Renault and Mitsubishi, they set the standards. And we then -- we're engaging with them at the moment to say what can we relax, what can't we relax, what can we do, what can't we do? We're working with our bodies called NAAMSA and NADA to make sure that we do what the industry is doing. So we follow what's happening. We don't have car plants right to do what we want to because we have fantastic distribution and franchise agreements to follow. Otherwise, we can lose 1 of those agreements. We've set up work streams with Niall Lynch, who's one of the ExCo members to head up their swift stream and deal with all the ExCo members to investigate its impact, what are the threats and opportunities. And like you can understand that a threat always comes with an opportunity. And having vast experience in our servicing of vehicles and procuring OEM and parts through our dealerships, we have their expertise. And then over and above that, we have procurement and distribution of non-OEM parts through the aftermarket parts business. So we believe that there are some short-term challenges, but we believe long term, there is some fantastic opportunities, which we will exploit over time. We've engaged with our dealership networks in the U.K. and Australia. They have similar legislation to get insights from them. The important message we got from them is that, yes, this happened, but it did not impact the motor industries significantly. There was a bit of a hiccup on initially, but they all get used to it and they adapt to that environment. And again, on this slide, a point I made earlier, we must not underestimate there are 12.5 million cars in the South African market, only 2.5 million cars are impacted by this legislation, 10 million cars can still be serviced by ISPs, independent service providers, do what they like. They're not bound by the rules that we are bound by. So please don't underestimate that, that the cars under warranty are 2.5 million out of 12.5 million vehicles. We would just put that into perspective when we look at the impact of the Right to Repair. Okay. This is the most important slide because you can have product, you can have good businesses, but if you don't have people, we have nothing. So what are we doing? We continue with transformation. We went to the Department of Labor and said we gave you targets 2 years ago, but we've had a lot of retrenchments and restructuring our businesses. They allowed us to resubmit revised employment equity plans in December 2020 for the next 3 years. The focus -- we heavily focused those on economically active people as well. So we submitted revised plan, which the Department of Labor was good enough to allow us to do that. During COVID, we slowed down the training programs. We've accelerated that, and we've got that back into gear now, and 2021 will start getting back to normal. We submit our succession plans, both for senior and middle management and for my direct reports. We submit them to the senior middle management, we submit to the social and ethics meeting. And my direct reports a succession plan submitted to the Nominations Committee. So these detailed plans as to what happens in short term, what happens in the long term, and we provide schedules for that. A new initiative, we started with the YES program that we all go back about 3, 4 years ago, which was started by the President, together with the people that run the YES program is providing unemployed youth with an opportunity to get experience, and we've embarked on this program. We will employ 355 youth in our business that are currently employed. The YES program will assist us and provides some training to them. And then we will do an allocation of the 355 people throughout our businesses, and there's a cost of about ZAR 15 million attached to this, which we've accepted that we need to make a difference in assisting unemployed use in our country, and we believe this project will go a long way in helping the unemployed use in our country. Some of these people could then be employed our business after the training period, some will find employment elsewhere. On the apprentice training program, we haven't stopped it despite COVID. We continue training 1,500 apprentices per annum, both for internal and external. So we don't -- we can't use 1,500 people ourselves. So these people then find jobs with other motor groups, other independent service providers. So that's what Motus does for the industry, not for itself only. On COVID 19, we've continued again with social distancing, protocols, flexible work arrangements, oximeters have been provided to staff in isolation to help them. We've continued with the risk awareness programs. And like I said before, we're helping staff with counseling, either health, financial, or mental and the counseling programs have been enhanced to help people during this process. Okay. So we've talked about the business and its people, where do we see the next 6 months? What did we do in the last 6 months? So in the last 6 months, we scaled our business down in a very sustainable and responsible way. So that helped us, and that's why we could deliver the numbers we gave you. We're planning well for the new legislation. I explained to you all the new legislation that's coming our way. We've got work streams, and we've got dates, and we've got timelines, and all that is happening. If you put our business into 1 sentence and saying, what's been Motus' success? This is the success. It's an integrated and diverse business model, supported by agile and entrepreneurial management team. That provided a buffer during these declining trading conditions to deliver on the strategies and the numbers that we've just spoken about. So that's the crux of, if you want to know what's the success, that's the 1 sentence that you can walk away from today, that's provided the buffer from a declining business to a sustainable profitable business, which is cash generative. That's the sentence that brought us through. Touch wood, so far, so good. We've got 6 weeks, 7 weeks into the new quarter half. So we've had positive trading in the first 6 weeks, long made last, so we can continue delivering what we need to deliver. We have sufficient cash now and a strong balance sheet to help with growth initiatives, and we will be doing some share buybacks as well. So if we get into lockdown 5 or 4, we've got sufficient fuel in this tank. We are committed to delivering a stable operating and financial results for the year to June 2021. We're not going into percentages, whether the turnover is going to do what in the operating profit. I think the first half speaks for itself. And if this continues, then I'm sure you can work out what we can achieve. There are 2 caveats. Obviously, if the country continues with Level 3, 2 and 1, we're very comfortable. If the country goes into lockdown, 4s and 5s, then that will create its own stress and strains, which we can't predict at the moment. There are some vehicle shortages with local OEMs, so that means the shortages are not significant with Hyundai, Kia, Renault, Mitsubishi, it's the local OEMs. And the dilemma for them was not all their factories are in one place. So you get factories in Europe, you get factories in India, you get factories in Japan, in the Czech Republic, you'll get in Thailand. So because the factories are all over the world, some of the OEMs experience some shortages. If they're not material, we throw for the 6 months, if they're material and the short-term that means we say 2 to 3 months we okay. But if they're long term, then there will be an inventory shortage. But at the moment, the undertaking, we've been given by the OEMs, that these are short term shortages, and they will get through the problem as soon as they can. With the strong numbers, we've declared a dividend of ZAR 1.60 a share, and we're confident that if we can continue this way, the Board, I'm sure, will support us to pay another dividend in -- for the full year, but that will depend on what happens in the second half and how the Board sees our results at that point in time. Okay. So COVID has been hard on us. It's been hard on our people. We've lost 20 lives of people that work with us, and it's very sad because you work with these people every day. And all of a sudden, today, they're sick for a week and then they're no longer. So it's very sad and difficult. We provide all the support we can. But all I can say to you is that it's a very tough environment to work in. 19 of the death were from COVID and 1 was from a motor accident. We would like to thank Janine Jefferies, who's been our Company Secretary and legal counsel since we listed, and she's decided to leave the country, and she will be flying out of the country in the next 2 weeks. We've got a replacement in Ntando Simelane will join us from April 1, so we've got a very good replacement, but we wish Janine all the success in the new foreign country that she's going to, and I'm sure she will have a good balance between her work-life and social life because the social life at Motus was very limited because of the workload that Ockert and I created, but I'm sure she'll find a balance into the future. Before I go and thank all our staff members and customers and shareholders and Board members, there's some unsung heroes that lead Motus. You hear Ockert and I talk, and I'm very privileged to have Ockert as my CFO, my right-hand man. So you hear us talk, but the success doesn't lie with Ockert and myself. The success lies with the team and who are the team underneath us, and they have a great team underneath them. So firstly, we have the CEO of Hyundai, Niall Lynch and his team have done a great job to deliver on these numbers. We've got Gary Scott, at Kia, as CEO of Kia and his team. We've got Jaco Oosthuizen who leads the Renault business and his team. We've got a bit of a change in Mitsubishi. It was Pedro, but he's handing over to Tata to both of them, delivered great results in the emerging brands, which is Mitsubishi and the parts in other emerging brands. Then we come to the Retail and Rental division. That's broken up a bit. So firstly, Rob Truscott doing a great job in the U.K. and his team. We've got John Johnson in Australia that does a fantastic job in Australia. Very difficult to talk to us because of time differences, but does a great job for us managing our 36 dealerships, now 38 in Australia, doing a great job in Australia. South Africa, we've got Corne Venter, who looks after the Retail and Rental business. But under retail, there's a fantastic team that runs the various brands. They're too many to mention, but they know who they are. So to Corne and his team who look after the retail business in South Africa and the rental business, which is Europe and Tempus. He's got a great team. They've done a great job and will continue doing a great job in that big sector of our business. Then we move to the Financial Services division, we thank Kerry Cassel and her team. They do a great job in looking after our customers, making sure that they are selling the right products, looking after the customers and making sure that they look after a great team that's operating 85% from their homes and not from their offices. And then we've got Malcolm Perrie, who looks after the aftermarket parts in the form of Midas and Alert Engine Parts. And he's got a small team in Taiwan and in China. And does a great job of looking after the team in South Africa with some great strategies. To the ExCo team on the trading floor, well done to you and your teams below you. You've done a great job to deliver this. Not forgetting the unsung heroes that deliver support services. For example, we have Berenice Francis, who manages our risk management, sustainability, and she's been my right-hand person in helping me with my communication, with COVID, getting all our PPE supply is sorted out, making sure our dealerships have the right sanitizers, masks, oximeters, equipment that we need to has done a great job helping the team putting that all together. And then we've got Michele, who looks after our people with policies and procedures, helping with the disability people. So welcome to -- thank you to Michele and the team looking after the people as well. Like I said, that the team who leads the team, but there are 14,500 people that we're thanking for making this all possible. So to each and every staff member of Motus, we thank you for your support. And not forgetting our Board members, thank you for your support. And hope with all your efforts, we can deliver another sterling result for H2 when we talked to you in August as well. So thank you to each one of you for listening this morning. Thank you for the staff and the stakeholders for their support. And we have a few minutes. We overran a bit. But Justine will help me through and ask, check if there's any questions on the webinar on coal. So Justine, are there any calls that I need any questions that I need to answer or Ockert needs to answer?

A number of questions have come through the webcast. I think a few of them have already been addressed during the presentation. But if there is something that hasn't been addressed or a question that you would still like an answer of anyone can just contact me. My details are on the website. Okay. To kick off, first question. There have been a number of questions around cash generation and debt levels. What can we expect to be the new debt equity levels in the adjusted environment? And what is the capital allocation plan or strategy going forward?

I think it takes a bold person to write out their plans and saying, this is how we're going to use every cent of our cash. I don't think so we can do that. All we can say is that the second half is going to be tough. However, we need to build our inventory. We need to build our car rental fleet again, and that's going to need cash. We've slowed down with our capital expenditures. So we're going to get more capital expenditure in the second half in terms of maintenance, in terms of building. And so a lot of our cash will be utilized for working capital, car rental fleet, for capital expenditure. And obviously, we will do some share buybacks wherever possible, and we will look for strategic acquisitions as we see fit and that enhance value to our business and support the future strategy of our business. Just out of interest, we and the investment team have looked at 4 big deals in the last 3 months or 4 months, but the returns were not viable. The investment was too big for the returns, we couldn't do the deal, so we let the deals go. But there are opportunities. We will exploit them like we did Renault, like we did Australia. But all I'm saying is that if we don't do any major acquisitions, the money is spoken for in the working capital, the car rental fleet, the dividends, the share buybacks and the capital expenditure. So as a rule of thumb, the debt-to-equity will not be maintained at 24%, but we're hoping we can maintain the debt-to-equity at below 50%. And that's the guideline that we've given the Board is well, and that's what we will target. Thanks, Justine.

With reduced local travel and international travel not yet fully opened, does Motus team make current car rental fleet to be right sized?

So we brought the car rental fleet down from 22,000 vehicles to 12,000. We adjusted it to 14,000, and we're comfortable at this stage that 14,000 is the right size of the fleet. We've got the sites, and we've got the people to manage at 14,000 vehicles, and we believe this is correct. But if it goes up by 1,000 or 2,000, we've got sufficient capacity to put more vehicles in if it drops by 1,000 or 2,000 cars, we've got that capacity as well. So to answer your question, yes, we have adapted the car rental business to the new norm.

A number of questions have come in around the rental de-fleets, as to whether there were any abnormal profits that were made on the de-fleeting of the car rental fleet compared to prior years?

I'll leave it to Ockert, as the accountant, who counted all the cash, so let's see how we count it.