Motus Holdings Limited (MTH) Earnings Call Transcript & Summary

Good morning to everyone. Thanks for joining us this morning. It's nice to have you in person again. A special welcome to our non-execs. We've got [ some ] here, but I know there's some people on the phone as well. To the Motus management team, thanks for joining us this morning, and thanks for making -- delivering on these results as well, which I'm sure you'll agree were great under the circumstances. And then we've got Kerry, who is our Executive Director, in the audience as well. We've got most of the EXCO members, Niall and Berenice and everybody else here, Gary. So everyone is here. Thato is here as well. Who am I missing? I think I saw -- I met everyone from the EXCO. And some can't make it, so they'll be attending. But once again, thanks a lot for joining us. It's a real pleasure to have you in face-to-face discussions because I'm not a believer in Zoom. I was. Thought we could get out of it and I could see you guys because I'm a people's person, and I like debating issues and talking about issues in person because you'll watch our -- I'll watch your body language, and you can watch mine, and see whether we are on the same path or not. So thank you for joining us. It's that time of the year where these times come so quickly. The 6 months just rolled on. We just delivered our full year results, and now we're delivering half year results again. So we've got a full agenda. There's about 13 slides we want to go through, but some of them, we're not going to go through every slide. We'll just talk about the big issues on that particular slide. So I hope you concur with what I'm going to say because I think under the circumstances, when you're going through so many issues in our country and globally, high interest rates, inflation, wars, all that kind of thing, despite that, Motus can produce turnover that's 14% up, so how can I think? It will be a nice thing that the next time, we'll get pass the ZAR 100 billion number. So hopefully, we're in a big league now. We're getting out of small league and going to a big league with past ZAR 100 billion turnover number. And then you can look at the EBITDA, ZAR 3.7 billion. And that's a great achievement for us as well, and 25% up, so I think it's a great result. And I know some of you will want to discount some of that number for the acquisition. Acquisition is an ongoing thing. It's not a once-off. It will be there next year. We've only had it for 2.5 months this year, but you'll see it for the full period. But if you take it off from the ZAR 3.7 billion, it's ZAR 3.6 billion or something like that. So it's not a material number in this number, but material for the future. And then obviously, operating income, 22% up. We'll talk a bit about the other numbers when we go down to the attributable income, and Ockert will talk about this. So from a financial point of view, we're very comfortable with what we've achieved. The Motus management team's sitting here with you today, and their direct reports and our 3,000 staff have produced a great result. So the guys have all put shoulder to the wheel, and we've achieved great things. Over and above doing this in our daytime, at nighttime, we were doing some acquisitions. We didn't get paid overtime, but we did them. And the acquisitions, I'll talk in a bit more in detail about how we -- how they're performing, what they're doing, things like that, but the MPD acquisition was a great acquisition. I'll talk a lot about that. The Mercedes one down opposite Sandton City. That's one, but there's 4 of them, 4 passenger and 1 commercial that we bought, and I want to talk a bit about that. And bolt-on acquisitions we do all the time. For example, we'll buy Midas outlets wherever they're available. When the franchisees want to pull out, we pull in. We open areas up, things like that. So when we're looking -- we look at motor dealerships, so they're bolt-on in our area, we would look at that as well. So bolt-ons are part of our jobs. We do that, and we'll continue doing that. Then, what did we do for you guys as shareholders? I mean, obviously, we're very comfortable with our ROIC at 17%. I know some of you will say, I can put my money in the bank, but you'll put it in a bank and you won't get this kind of return. But what we trying to deliver is sustainable income into the future. So I think we were quite pleased with our ROIC. And then you look at your HEPS and your EPS growth. I mean, HEPS at 13% and -- EPS at 17% and HEPS at 13%. So we're very comfortable with that. And the way we're going, we'll continue with paying our dividends. We did skip 1 during COVID, but I think that was a once-off. But I think we're back into the cycle, that we'd like to continue paying dividends because we know that some of our shareholders rely on that dividend for things they need to do. While we were delivering a good result to you and doing some acquisitions, we haven't forgotten the other responsibilities, which are ESG and our digitization and innovation. So on ESG, we've continued with the things that we've set our strategy on. And like you can see, we've achieved 76% of black representation in our workforce. And we've got 31% females in our business, and the target there is 40%. So hopefully, we can achieve that target in the next 18 months. That's a target that we've set ourselves. And what makes it more difficult to grow these numbers is because people are not leaving our businesses in a hurry, so it's only when people leave, you can replace. The average age in our business is not 65, it's close to 45, so it's difficult. There's no retirements we can push. And the South African economy is not allowing us to do a lot more acquisitions. Otherwise we could have bought more and make more changes, but that's not happening either. So there's a lot of organic growth and organic growth is slow, but the people makes it more challenging to grow that number. But we're not making excuses. We'll continue. And we've maintained our Level 4 BE rating. So Berenice, to you and the team, well done. I mean, continue the hard work and hopefully, you can hold us for another couple of years, with every year we go through our rating. And the training spend, ZAR 81 million, that's for the half, and then we'll continue doing what we're doing. And we haven't forgot where we've come from, so we continue our support into the resources, which is library projects. We continue with that. And our health facilities, we've got 140 of those as well. Those are the health facilities in the townships that we provide. We empower nurses, and in 4 years' time, they own these spaces. We have nothing to do with them, it's theirs. So that's a great initiative, like the libraries as well. But then obviously, what's become part of Motus' DNA now in the last 3 years under Kerry's leadership is this digitization and innovation. It's something now. It's not an add on, it's integral part of our businesses, and that's what the team has achieved. They've put it into the businesses and it's happening, and the nice thing is we've got 4,000 members now out of the 20,000 people. We'd want all innovators, but 4,000 out of 20,000 is a great number to have where people are thinking differently about what they do, not only in their businesses, in other businesses. So that's -- and digitization, I mean, those projects are all in track. There's a lot of projects going in our Mobility Solutions, Aftermarket Parts, Car Rental, Dealerships, then the importers got their own projects going as well. So everyone's continuing with that. And then over and above that, the thing that keeps Kerry awake at night and the team is cyber threats. So on the one side, you develop team to become smarter, on the other side, you've got to protect what you've got. So that's the thing that keeps them more awake than anything else, is making sure that what we've got, we protect, and people can't just come into our businesses. So that's a major challenge for Kerry and the team. Okay. Let's talk a bit about our acquisitions. I mean, I'm not going to go through every line on income statement. That's Ockert's job. But why we quite like this acquisition and why we're excited about it is that if you think of the Aftermarket Parts business in the U.K., there's approximately 40 million cars in the U.K. If you take up the cars outside warranty, there are 32 million, 33 million cars. That's the pond that we're fishing in. And what do we do for those people? We're selling the air filters, oil filters, lubricants, all that kind of things in a very sophisticated way because their workshop are more sophisticated than ours, and we're supplying to that market. So when Malcolm and Ockert and I heard about this, they jumped into the plane and went to meet the owner to understand why was he selling? What's it all about? Who am I bidding against? Because if I was bidding against private equities, they're adding a debt check. If I was bidding against people that want to grow the business slowly, then I'll be in the game, but you can't compete with private equity funds. Their checks are just too big and they do business differently because highly-geared business, things like that. So we didn't get a very warm reception in the first meeting. I think it was March last year in the U.K. Two months later, we got a call and said, can we have another meeting and talk? And that's where it all started, and we got into the discussions. So for us, what was important? It was aligned to our strategy. What's our strategy? Like we always talk about, it's that growing businesses you understand and that can add value to the mobilities that we provide, so it's something you'll understand. Don't go to manufacturing, we don't understand it. Go into buy and selling, but go to a motor car and parts, was put in that definition. Then what we wanted to do as well is reduce the dependency, and everyone measures just how many new cars you sold and how many pre-owned in the markets, up when the market's down and NAAMSA's members are doing that. We're taking our dependency away from that as well. The other thing businesses like these do, they're cash generative. So if they're going to make ZAR 600 million operating income after tax, it's virtually cash, which we buy and sell. So there's numbers to spend the balance sheet 3-to-4 times a year, we become cash generative. That means once you bought it, there isn't more cash going in. So they don't want fancy dealers or fancy outlets, it's yours. So you put in where you can make money, and that's what we like about this. It's cash generative. The other key thing for us is that we do a lot of procurement for South Africa through China and Taiwan and a bit of Turkey and a bit of other areas. And we've got the DC in China, and we've got a very good business in Taiwan, so that's something we can now get more synergies from is those warehouses in China, that warehouse in China. So we can buy, but this business only buys in Europe, doesn't buy outside. So that's a big opportunity for us to buy from China, send the stuff to the U.K., have good margins and help with synergies that we can bring to the party. So Malcolm and his team are thinking where they're buying from, what parts are they buying, how can we -- and they just had strategic sessions. The guys were away in Turkey. They were there, they were here last week as well, so that's a big thing. Now unfortunately, I can't tell you I'll have it by June, because you don't switch on and off suppliers. So we're saying by June 2024, we'll try and get all our synergies in place because we've got to get the products, get the suppliers in, but make sure that we are part of the supply chain. We just don't want to be receiving it out our warehouse, we want to source it, package it, send it to ourselves, our people sell it, and that's what we like about this business. Like I said, it's cash generative, asset-light and not capital intensive. What I mean by that, that once you bought it, you just roll out the stores and they generate cash. We like the growth opportunities in this business. We have about 173 stores. We think getting to 200 won't be difficult. It will take us 2 years, but we think we can get there by 200. Pockets of the U.K. that are left blank, and that's what Malcolm and the team will start looking at over the next 2 years and say, how do we complete the jigsaw? The other opportunities are Europe, so they want to move some of the product into Europe as well. So they're looking at that opportunity. So we're hoping that success will create success. We paid ZAR 3.7 billion, so it sounds expensive. But then look at the EBITDA, the EBITDA is ZAR 700 million. So if you do that for all the contents in the room, it's 5.29. That's the number you'll come to. But you'll take off your depreciation and things like that. And if you take tax in the U.K. now, I'm not sure whether it's going to be somewhere between 19% and 25%, I don't know, with the changing decisions. So I mean, if we can generate the cash -- because the business will have cash, the profits we'll make after tax will all be cash. So that would help us bring our debt down as well. And you can see what we've done. We'll be the fourth biggest player in the U.K., and we'll have 5% market share. So for a newcomer like us, coming in, gaining a 5% market share, I think it's a very comfortable place to be in. So we quite like this acquisition. And then for those of you that are concerned, I mean, yes, we did the deal with the effect from third of October. But up to the end of January, it's lived up to our expectations. Whatever they promised us, they've delivered. So we're very comfortable that the signs we are seeing. But normally, when you take over, you have a computer problem and then you have this problem, touch wood, they've delivered what they promised. And if we continue like this, then that ZAR 700 million shouldn't be a problem in the fullness of time in a 12-month period. Okay. So this was a great acquisition as well. Yes, it's -- not only it's been buy the property, we're leasing the property, but we've got the dealership that came with it. But I think more than just -- you can see the numbers, we paid ZAR 715 million. We funded some from the OEM floor plan and the balance from our facilities. But I think this was more strategic in a sense that -- in a different way to MPD. What I mean by that, if you buy and you see this from Springs into Johannesburg, go to the west and go right up to Sandton, that gives us coverage. So it gives us great coverage in terms of a premium brand and the area we cover because we control the area now. So that will -- that's what we liked about this business. It gives us -- it's strategic, and we're protecting our base. So to get a competitor in the middle of your territory is always dangerous, so that's why we have to look at this. But we're very comfortable that this business that we identify with Mercedes, a premium brand, and they will make money into the future. Okay. The trading environment, I'm not going to go through every line item on this slide because you're all in it, you all read the press and you're watching the TV and you know all the challenges we have of high interest rates, power outages, high unemployment, fragile consumer. You've seen all this, so I'm not going to go through every line item. And even the numbers we put at the bottom, which I'm worried about, you look at the GDP growth, it's at 1.2%, I think some people are talking about 1%. So whatever happens happens. All we can say to you, we do our best in our business to deliver what we can. So if we waiting for you guys to adjust our share price or we waiting for the market, it's never going to happen. We just do our best in our businesses and deliver the best result, so that's what we're trying to do. The U.K. has got its own challenges. You can see they're also going through high inflation. Interest rates are high, 4% at the moment. And not long ago, they were 0.2% and their GDP was 4%. They're talking of -- a decline of 0.5%, so it's going to be tough for them. And Australia, you can see 3% GDP looking at 2%. The nice thing about the U.K. is that we've been in the truck business. And the U.K., like I told you guys previously, they're very good at moving people on train, not goods. So the top business is doing well for us. Our order books fill until the end of September. We're going to just deliver. And the interesting thing that's happening in the U.K. on the Aftermarket Parts is that new car prices are becoming expensive, so people are holding on to their pre-owned cars longer. That's good for us because the longer they hold, the more parts they need, and they play into our hands. In fact, I was speaking to the CEO of the business on Wednesday night, and he said the car park has actually grown by 2 years. But the more people hold on, the car park gets bigger because they're not going to new ones. They're going to sticking with their cars and they get -- the longer they keep them, the more parts they need. So they're quite excited about what's happening there. But from a parts perspective, what it's growing is their car park. Okay. So we get to South Africa, and we look at our market, things like that. So you can see where we were, 464,000, 528,000, we're talking about 540,000 for this calendar year. So you ask yourself, how do we think we can come from 529,000, say, to 540,000? When we're talking of a GDP growth of maybe 1%, where is this growth coming from? We believe that last year, there weren't enough cars to give the car rental companies, so we think there's about 20,000 cars that need to go that way. Not only our imports, but our competitor products as well, like the Suzuki, Toyota, VW, things like that. So we think there's a market there, and then we believe the corporate market gets back in. So the growth is not going to come primarily from the consumer, the man in the street. It will come from the car rental companies, and it should come from the corporate world as well. The pharmaceutical companies, your British American Tobaccos, [ futilities ] of the world, things like that. That's where we think we can get to for the full 12 months. And to give you a projected number to June as well, which is our financial year. If you look at our imports, I mean we're still very comfortable at 22%. That number was higher last year. But in the H1 that we're reporting on, we had a great H1 in 2021. People were short of stock, we had enough stock because we were getting stock from the east. Our stocks have slowed down, the other guys have picked up. Despite that, we managed to hold that. And you can see in the top 10, we're holding 3 positions. We're holding 4, 5 and 6. We're comfortable with that. Remember, it's not just about the cars and the market share you hold, it's what we do to the car park of the future. But the more we're selling, the more these customers will come in service with us, and that's where Kerry's business does well in Mobility Solutions because the fund grows. Neil and Gary and Shumani and Thato enjoy from the import side because the workshops are kept busy. And they don't have to look at the money, their money is guaranteed with -- Kerry's division will give them the money after they service the car if it's in the service plan or warranty or whatever, or maintenance plan. So that's the nice thing about this, feeding this family. Kerry doesn't sometimes release the cash quickly enough for my importers. But they shelter it now and then, but these things happen. But it's all in the family guys, so I'm not the first. And you look at our market share, 20.5%, so we still sell 1 in 5 cars in this country. So all in all, comfortable space and in a difficult time at first where parts were still in shortages, they were not in abundant supply. And in 2021, the comparison was high because we had a great H1 2021 because we had cars when other people didn't have, so holding that position is a nice outcome. Okay. So if you look at the units in South Africa, you see they were flat. In the U.K. they were slightly down. U.K. suffered slightly more because their cars come from Europe, and we know the problems they've had in Ukraine, and the production problem, so they were battling with cars. Why don't we battle so much? We get a lot of cars from the East. But Europe, that's a lot of its cars from -- the U.K. gets a lot of cars from Europe, and that's what happened. And Australia, like South Africa, gets a lot of cars from the East as well. They get a lot of cars from Japan, Thailand, things like that, so you can see they've done nicely. Pre-owned, I think we were in an artificial bubble previously where car rental de-fleeted, people were selling cars at good prices, but you can see it settle down. In the U.K., more than South Africa, in the U.K., people are holding on to their cars. They're not giving the cars away like I said, and you can see they're driving their cars longer. So that's part of that. Australia, for some odd reason, a very strong economy, doing well, both the new cars and the pre-owned cars have gone up. So you can see they're selling their resources at good prices, getting good foreign income and the consumer is still in a healthy space. We watch this number where we sell, how many pre-owned do we sell? Today, we're selling 0.7:1. In the COVID period where we de-fleeted all those cars, we actually virtually got 1:1, but that was a once-off, we would never get there. So we get to 0.7, 0.75 pre-owned to new, we're very comfortable with that. And then the other point that I made to you guys always that we don't sell cars longer than 5 to 6 years old in our dealership. If we get those tradings, we offload them to the trader because they don't suit our dealerships because they're old, they need too much repairs, things like that. And we'll have to take a lot of [ comm ]. When we sell a car to you, we know we're going to stand behind it. If you were to take a look, you take it or leave it and move on. I was -- it's not like that. When you bring your car, when you trade your car in, we check it out and then you can take it. And if you have a problem, you always come back. So some customers are unreasonable. That's life, but we prefer to deal with cars that are younger than 6 years old because we believe that's a quality car that we can look after. Okay. So you saw the units, but look at the growth in the turnover. No growth in units, but you're getting 14% growth in South Africa. Pre-owned, no growth. You saw it going backwards. You grew 8% past '23 pass-throughs, the aftermarket and rendering of services. So now you're wondering, what happened to our new vehicles? Where did we get the money from? So firstly, there were price increases, but that was 6% to 7%. Then you got a change in mix because you're sort of buying or selling all entry levels, you sell 1 up. And that's where Hyundai, Kia, a bit of Renault and Mitsubishi do well because their product has moved up, and they can give you a product from entry range right up to ZAR 1.2 million, ZAR 1.3 million. And that's why our customer has moved up, and we're selling premium products in our import brands. We sold the other products as well, like the Toyotas, VWs. And you can see despite the units being flat or gone negative, we can still produce a growth in turnover. That's why I think what we need to be careful about to you guys as readers that when the lump sum numbers come out and we're slightly down in units or we're slightly up, it doesn't make or break Motus because Motus makes its money on a number of sources. And you can see we make it from parts and then it's rendering of services, things like that. And obviously, the rendering of services includes its Mobility Solutions, where they're selling all these value-added products. Which is nice product, and that gives you annuity income into the future as well. So we will just be careful how we look at those numbers as well. The pleasing thing about this slide, you can see every division came to the party. It's not one ran away with it. Aftermarket Parts looked like it ran away with it, but it's actually just an acquisition and it will do that in June as well, with a comparative one have it and the June will have that number. But you can see, the import has went up 11%, 12% in the retail, 13%. So every division came to the party and delivered what we wanted was a 14% increase in revenue. So you can see it's all around business, not one winner take all. Okay. So now before I do the slide, I just want to do this slide and then I'll come back to this one. Okay. If you look at the operating profit contribution per segment, again, you can see how nicely it's spread that no one made the profits at the other one's expense. They all produce the numbers. Import and Distribution, 12%. And like I said, Import and Distribution, that base was already high in H1 2021. Because remember, we had cars when other people didn't have cars and we were already running on a good base and despite that, they grew that by 12%. Retail and Rental, they benefited now from the car rental business getting back to normality. It's still not ideal, but it's getting there. If I think of the numbers, I think we've -- during COVID, we had about 18,500, 19,000 cars, we've got 19,500 cars in that business. So you can see this business has started to pick up and doing what we want to do. Mobility Solutions, I mean, you can see consistent, sustainable, cash generative. What this business gives you? In the good times, they don't double their profits, in the bad times, they don't half their profits. It's a consistent business that does that because of the annuity base it's got. And then the Aftermarket Parts has benefit partly from the acquisition. But like I said, it's not material, but still the other businesses have come to the party and everyone added to this action, and that's why you got a 22% growth. So it's not one division subsidize the other. Everyone came to the party. Okay. Now that you understand the income statement, have we lived up to our strategy? Now you won't remember because when we set the strategy, it was at unbundling in 2018. And then COVID happens, we all -- our memories were wiped out because we were into survival mode, so you won't remember some of that stuff. But we're back to where we are, hopefully, we can continue at these levels. The point I want to make to you is that look at the foreign income of 23%, 20% gone to 23%. If you went to 2018, depending on which numbers you take, you'll be somewhere between 8% and 10%. Whether you take EBITDA or you take operating income, somewhere you'll come up between 8% and 10%, and we're sitting at 23%. All goes well, we want that number to be 25% and 26% by June this year. So the point I want to make to you guys is that we're not dependent on one economy. The foreign economies are helping us, that will produce that, A. B, in the foreign economy, it's also not about a new car sale. The Aftermarket Parts should kick in, which is FAI and MPD in the U.K., we've got Taiwan, we've got China's distribution center, and then we're looking at other acquisitions as well. So that's important to us because you can't have your eggs all in the South African basket not because we don't like South Africa, it's that we can't do much. Can I buy more dealerships? The answer is no. The OEM blocks me. Competition Commission blocks me. So we go to look for bigger acquisitions outside but bolt-on acquisitions will be done here, but we're quite pleased that our strategy is working. That 8% to 10% has become a 23% and 23% should become a 26% not long away from now. Then the other point I want to make to you on this slide, if you look at generated from vehicle sales, which is 56%, generated from non-vehicle sales is 44%. What I'm trying to tell you is that the divisions that are not directly related to sale of a car today will be Mobility Solutions. But remember, if you sell the service plan or maintenance plan, we don't make money on that day. You make it 6 months, 12 months later when you bring your car in and they service your car. And it's not related directly to a sale on that day, A. B, Aftermarket Parts. They don't depend on car sales. In fact, sometimes the less cars you sell, the better they do. The longer people hold their pre-owned cars, they do better because they need parts. So that business, we took that out. And then obviously, the car rent business is not dependent on the sale of a car. We've taken up Auto Pedigree and you can see. So if we get that 44% to 48% next June by 52% hopefully, then I think we get a fair balance between directly relating to a car sale, non-directly, and then local and foreign. If you can get that 26%, 27%, then I think you're getting a fair balance in the business. Now what's the beauty of this? It's just not the numbers that we're delivering. What are we creating here? We want to create a sustainable business that generates cash. Sustainable business, you can create. If we don't make cash, what you're going to do? We're going to borrow more money? You're going to issue more shares? So what we're trying to achieve, and that's our journey since we unbundled in 2018, is to create a business that can stand on its own feet by generating enough cash. With all due respect to the bankers here, we know what they do. When it's raining, they want the umbrella. When it's not raining, they give you the umbrella. We love your money, but that's what happens in life. So what I'm saying is that our strategy is to build a business that's cash generative and is sustainable. That is, you must ride the cycles. You'll get global financial crisis, you get COVID. You get Eskom. You get these problems. But what we try to do in our business is to ride the storms as comfortably as we can so we can get the sustainability and the cash that goes with it. Because otherwise, [indiscernible] and Ockert will be very annoyed. They don't have enough cash, and then they will stop signing checks or EFTs, we have problem. So we try to create a business that's sustainable and has cash in it, and that's the purpose of this slide. It's just for us to understand, this is not the Motus of 5 years ago. This is a Motus on a journey that wants to create cash and be sustainable. So if you reward us in the share price or not, we're not -- we can't control that. This is what we can control, and that is what we want to do. So I know I'm spending a lot of time on the slide, I just want everyone to understand where we came from to where we want to go to, and that's the journey Motus itself. And every member of my EXCO that sit here is on this journey. They know that, and they make it happen. They worked very hard in their businesses, but this is the objective. Okay. So I mean, Ockert will go into this in a lot more detail as well, but you can see every number on this, we're very proud of, with our revenues, operating income, profit before tax. Ockert will explain in a lot more detail, hopefully, with the operating profit and the PBT. You think did we -- where did we lose the money? We haven't lost the money. It's intact, it's safe, but he'll explain that to you. And then you can see attributable income of 9%, earnings, 17% and 13%. The 17% and 13% has benefited from the share buybacks of the past, so you can see that. And we still want to look after the family, so we'll pay the dividends of ZAR 3 per share. Then obviously, we evaluate this as we go. We generated some cash. Remember, in a year where we did all the acquisitions, things like that, despite that, we -- I mean, acquisitions are below the line. But on top, we have working capital, we have car rental fleets normalizing. But despite that, we've got some cash. Our net asset value is looking good. To the bankers in the room, you can sleep well tonight. My EBITDA and net debt to EBITDA and EBITDA to net interest, you can see we're well within the ranges that you guys give us, less than 3x. We have 1.6x despite a ZAR 4.4 billion acquisition, so I think we mustn't forget that. That -- this looks very sexy. But what thing we do in the process? We spent ZAR 4.4 billion on acquisitions. Now that's a big number, and that ZAR 4.4 billion has plenty of 0s behind it. So despite that, we managed to hold these 2 ratios, and I think that's critical. And I'm sure the bankers will look at it like that and say, is this a company that's going from hero to zero, or is it a company that's created a sustainable business? And this tells me that we're creating a sustainable business because if you can look after these covenances, in the year of your biggest acquisition, and you have the full debt on your balance sheet with only 2.5 months' worth of income in your income statement then you hold these, I think it's a very positive sign that we've got a very strong foundation to build on. And the -- your return on invested capital for the shareholders, we'd be very happy. We didn't lose your money. We protected your money. And the weighted average cost of capital has gone up because of interest rates and things like that. Okay. Ockert, over to you.

Thank you very much, Osman, and thanks for setting the scene there. I think it's quite important when you look at these numbers, I mean, the initial reaction I got outside was how on earth are you guys keep on doing this? You keep on delivering, and it's tough out there. We know. The economy is tough, it's challenging additions no matter which jurisdiction you're operating. The challenge is we probably, as Osman just pointed out, there's almost like 2 elements really in it. And the one is really the agility of the team to be able to adapt, and the other one is around the -- the fact that we've been able to diversify over a long period of time, it doesn't happen overnight. And as you could have seen there, every segment is playing its part. It's not reliant on one segment to suddenly come through and deliver the results. So look at the revenue and the operating profit on the slide, and I think it's self-explanatory. There on the slide, you can see the acquisition doesn't really play that much of a part yet, so that will probably come through in the future. But the reality is the business has been able to really hold its own. The margins are still strong. And then the one line which we don't disclose in that much detail, but what you would know is it's fundamentally in there, is the fact that we're able to control our cost base. So if you sit with the inflationary environment as we are in, the fact that we're able to control that cost base. And if you strip out all the acquisitions, everything else, the realities, we're probably still sitting at about 7% operating expenses year-on-year. The question then obviously arises because you saw it on the previous slide as well as, well, you had fantastic operating profit guys, you're losing everything below the line because you have to pay this big interest. I think when this acquisition happened, and I'm not blaming the acquisition entirely, you'll see there's a few reasons for it. But on the first point on the acquisition, you had to decide how are you going to fund something as big as we saw with MPD as well as the Mercedes dealership. I mean, it really had 2 options. The one is going back to shareholders, go and get equity, or the other one is to actually look at your balance sheet. Prior to this acquisition, we probably started gearing ourselves to one of the lowest levels it's ever been at. You were sitting at levels below 40% debt to equity, which funniest part was becoming a very, very lazy balance sheet in our lives when you consider when a cash-generative business that continues to spend its balance sheet on a continuous basis as well. And you would have seen that through COVID and now, we have been able to deal with that. So at that particular juncture, we decided to go and borrow some offshore. And then the local businesses, we geared them up to be able to fund this acquisition. So we didn't go to shareholders, and that is one of the reasons why, yes, you will see that the total finance cost will go up as a reflection of the debt. What did however also happened during this period is we did see our car rental business fleeting up. And that is normal, and we are glad that it suddenly happened because we were waiting for this as well. As you can remember, prior to COVID, what the levels we were at, we were up to like 24,000 vehicles in the car rental fleet. We went all the way down to 8,000 at one stage. And only now for December, we were at about 19,500 vehicles in that fleet that we were able to lease out, and you will see later in the slide. So that is one of the reasons why our Retail and Rental business has gone up as well. Coupled with that is, obviously, we are in a high inflationary environment, not just in South Africa, worldwide. That is what we're in. And then the last point was just around the working capital. It happened fairly close towards the end of this period, so it didn't happen throughout the period. And unfortunately, that pressure is going to be with us. We were waiting, waiting and finally, the stock has arrived. So we were, I think for 2 years, trying to figure out when is this back order is suddenly going to go through. All our banks were sitting with these LCs for all the orders, but reality is nothing we realized. And then suddenly, I don't know, all the manufacturing plants started getting themselves into gear, and you will have seen that not just ourselves, but all our other competitors as well. We're almost like flooded with stock towards the end of this calendar year. If we go below that line, we can obviously see that on the income tax expense, that is on the low side. It is going to remain fairly low throughout this period. Really 2 reasons. The one is that we are having more operations down in the U.K., which is at a lower tax rate for the rate 19%. And then obviously, it looks like the 25% is going to stick from -- on April onwards, so it's on a weighted average there. And the other one is that we do have some deferred tax assets being raised within one of our operations. And for those of you who've been dealing with us long enough probably knows that it's through Renault and the fact that they are now profitable. We are getting the benefit on that tax eventually, which was at the tax last -- some years ago, so we are rating that as well. Earnings up 9%, headline earnings up 6%, and that by itself was already a good result. But as you can see below that, you also got that additional benefit from the weighted average number of shares. So that is a true reflection of the share buybacks that happened in the last 12 months. You can see this is up to 166 million. We do give some guidance that listen, it's actually going to go up to 167 million by June. And that's because some shares were also issued as part of the share schemes, et cetera, so you won't silence them any longer. But reality is that is probably the biggest you can achieve, that you can get, and you can see how well that cash was actually allocated in the past to actually give you this additional benefit. And based on that, we will be issuing an interim dividend of about ZAR 3 a share. And obviously, something that we'll look at towards the full year and see exactly where we end. But just briefly touch on the separate segments just to give you a bit of a flavor. I know Osman have already touched on some of them, so I don't spend that much time on every slide. But I think the Importer business, probably the one that's had the most headwinds in recent times, you can see. Exchange rates against them, suddenly, stock arriving, and they had to go and almost go back to basics and go and see exactly where do you make the money, how do you actually derive most out of this. I think the fact that more stock has arrived will give us back the synergies which we almost were losing in the last while. You think about like bond stores, et cetera, where we're not running at optimal levels. We had a bond store, which was virtually empty. We're still paying some costs. If you actually have those filled up and at its normal capacities, you do get some benefits there. But also just in realizing your fair market share and making sure you can get sufficient supply chain through. So it's operating profit, as you can see there, was still up 12% on the prior year, and operating margin of 5.4% is a very good number. Question that we always get is, but what does it look like going forward? So this is a little bit looking at the crystal ball. Through our treasury teams, we obviously spend a lot of time trying to ensure that we do have hedge cover in this business. I mean, the hedge, this is quite an important number to try and have a look at. You can see that under euros, we're sitting at EUR 17.97, and the U.S. dollar, USD 16.65 for the full period up to July and August. So good cover there on both of those lines. So we do believe that will protect us from some of these fluctuations, and it's something that's normally a little bit out of your control. The channel split, also important. As you could see, we didn't have a full supply throughout the whole period, and the channel split were more skewed around dealer sales rather than selling it to car rental, which is one of the reasons on the unit difference. On Retail and Rental, you can see there on the Retail and Rental business, up 30%. Clear indication that, firstly, stock has started to arrive. We were able to work its way through where you had to extend the fixed cost base, so the higher volume certainly plays its part. Second to that, you would also see that the car rental business has performed very well in this period, and this is across all jurisdictions. So even the U.K. and Australia, we have seen good results coming through there. And the Australia business, in particular, seem to be performing quite well. Just a little bit more flavor around Retail and Rental, specifically in South Africa. So you can see there in South Africa, you've got some new model releases, et cetera, came through. I think the revenue contribution from Mercedes Benz have benefited on the revenue line, not so much on our operating profit line yet. But you can see on the car rental, I think if you can land up with a position that we had here where you got utilization of up to 70% for the 6 months, that's actually a little bit of a sweet spot. We had abnormality in this period over December, and I'm sure you'll see it from some of the competitors when they talk to you as well as the KwaZulu-Natal region were actually very low on utilization, lower than normal, and Cape Town was much higher. So you ended up having a little bit of an offset between the 2, and that probably had to do with some specific issues they had in the province. International, as I said, both performing well. It's good businesses, well-run management teams, knowing what they're doing. I think in the U.K. business in particular, you see that commercial trucks is still going from strength to strength. They also still had some issues around the availability of products, so they do have large back orders and you already have effectively sold the vehicles before they even arrive on the truck side. We were able to get the selling price increases through where it's needed. But yes, the U.K. is an interesting economy suddenly. They've also got high inflation, high interest rates. So you can see on the passenger side, they were taking a bit of strain. Hopefully, that will ease off in the time to come. And we probably lopside towards the commercial trucks more than the passenger, and that's why we've been able to get still good results there. The Australia site, they were really struggling with stock the prior year, so they have been able to get stock. And you can see that's a vibrant economy that probably if you take all the regions in totality, the South Africa, the U.K. and Australia, probably one less affected by the rest of the global concerns around inflation, and they are able to deal with it a lot better. Mobility Solutions, I think as Osman said, this is a business just continuously keep on performing. This morning, we were talking outside how difficult it was to get here and everyone was struggling, and there's all those vehicles are back on the road, et cetera, now traffic lights are not working. But as you can see that that bodes well for this business because suddenly with the utilization going up, you're able to get a better curve on your revenue recognition. This business has performed very well from that perspective as well as on the bank JV front, it's now a lot more stable there as well. So that increase is -- combined has given you a 13% increase on a business that was already big in size. So you can see how this business is just continuously getting on to a new level, and the benefit of it is that it's very sustainable. As you'll see on the balance sheet, the contract liabilities, in fact, still aligned year-on-year. Aftermarket Parts, the biggest benefactor from the recent acquisitions. It does play a little bit of a part in their specific numbers, but as you can see as a segment, suddenly doing ZAR 400 million. And if you go back in time, I mean for a large period of time, ZAR 400 million was pretty much the full year number. And Australian, sometimes it get to ZAR 500 million in the full year. So ZAR 400 million already in the half year. Believe it's a better margin business than what even reflects at the moment. There is still some synergies to come, but over time, they will start coming through. And this is probably the one to still keep on watching because you haven't seen the full effect of what we've even purchased in these recent acquisitions. Also different reasons, and we almost going unpack it a little bit. South African market, probably in our business, the one that was the most impacted if you think about power cuts, et cetera, and smaller towns struggling to operate, so you have seen a bit of the effect there. So the South African business maybe didn't perform as well as what we would have hoped for. Canopy business still performed well, but still holding its own. Offset that, however, is the Asian business where we import the vehicles into after vehicles, the parts into the local market has been able to get us a lot more of the benefit there. MPD and FAI, now that they're starting to come part of the family, you'll see that they will give us the extra benefit in this particular area. Moving over to the balance sheet. I mean, everything that you've seen on the previous slides almost reflects here. So you can see obviously the large acquisition had an impact on firstly, your goodwill and intangible assets. We brought an asset-light business. As you would have seen in the SENS announcement, a large intangible whilst relating to that business because they didn't really have that much of NAV, so that has had a material impact on that specific line. Also, the rights of use assets have gone up because they do not own properties. We took over all the leases. So those 2 specific lines have gone up. The other 2 that just stands out quite a bit is obviously of vehicles for hire. I explained that is where we wanted to try and get it to, so it is at a slightly higher elevated level now. Probably by year-end will come down a bit because we will be in a de-fleeting again. And then the net working capital by itself, obviously, up quite a lot from the lows we had in the prior year. It's not necessarily that high now. It's probably just it was very low in the previous year still. Net working capital, if you see it on its own, you can clearly see that all that inventory that arrive very close to year-end because you haven't even paid for it. So it was still -- the trade payable was offsetting, to some extent. Still your inventory. We haven't been able to even get the disposal of that yet into your debtors' line. And just to put it in perspective, prior to COVID, because you almost need to go back and say, well, where is a normal level again? Prior to COVID, December 2019, we were about ZAR 8.5 billion. Remember, we did have some acquisitions, inflationary pressures, et cetera, but that's almost like your starting point to compare this to. You were at ZAR 8.5 billion there, now, at about ZAR 10.5 billion. Maybe slightly on the high side, but if I ask any of my importers or dealers, do you prefer having the stock or waiting for the stock? They will all tell me they're very glad that it's finally arrived. So I suppose it's now back to basics and trying to make sure we sell them profitably in the next 6 months to come. Contract liabilities, we briefly spoke about it. But you can see it clearly on its own that on the contract liabilities, we didn't reduce that number yet. You can see how much impact it had on your Mobility Solutions income statement. So you can see that a lot has happened in that space where a lot of activity is actually starting to come through, so that's a good sign for us. And then the core interest-bearing debt, that's the one that's obviously show up quite a bit as I mentioned earlier around the fact that we had the acquisitions, the fact that the working capital is up, and that the vehicles for hire is certainly sitting at a more normalized level. Cash flow, this is really where it all comes down to. You can do everything at the top, but what does this tell us? Did we actually make the money finally when the profits came through? The answer is obviously yes. You can see the amount of cash that we generated just from the operations itself was ZAR 3.4 billion. We had the higher working capital coming from June, so that by itself did take away a bit of it. But you still are sitting with ZAR 1.3 billion, still plenty of money left to pay the high interest pull, but the interest pull that to net, nevertheless, going to be there, as well as the taxes that needed to be paid, and you still had some free cash flow after that. If you look at the vehicles for hire, we had to go and upfleet that, and obviously that is one of those areas where you'll upfleet in the first 6 months and then down fleet in the second half, so our full year picture is normally the base to look at there. And then you can see the acquisitions that we have spoken about. Obviously, when you look at the 2 acquisitions, when you buy those businesses, any inventory or anything else on the balance sheet obviously reflects all in that acquisition price. So it's not that easy just to take balance sheet to balance sheet and do your cash flows. You obviously need to do quite a bit of accounting around that. The dividends were paid with the dividend that was paid in September of this year -- of last year. I think on the last slide that I just want to sort of highlight to all of you is, well, yes, you've geared this business up, but what does it actually mean? So if you go back, where were we in December 2019? Yes, we were at 74%. Obviously, we're able to get it down to quite a low level. I think 24% and 30s and whatever, that looks like fairly low levels to have as a debt-to-equity and not something that's really sustainable over time. Where do we want it? We tried to give guidance. And as you can see, we -- it moves around quite a bit, not necessarily due to our own dues. But the reality is, I think the 50% to 75% is very comfortable. I think trying to get it lower to 50% is probably going to be one of our sort of short-term goal to try and get it slightly lower. But if you ever see through it, and that's probably the normalized view because you don't want to look at it at a specific point in time. A more normalized view, we would look at your debt-to-EBITDA, and that we always believe it's below 2x, you're in a very, very comfortable position. As you can see, it was at 1.8x, 1.9x, and now at 1.6x. That 1.6x, that is certainly still well within the covenant levels, which are sitting at below 3x. But even internally, we believe if we can just keep that below 2x, we're in a very comfortable position. You can see there is -- despite all of that, there is still some unutilized funding facilities available to us, as we certainly haven't run out of funding or anything like that, and still enough to come. Would I like to have more fixed-term debt? Answer is of course, yes. But unfortunately, that wasn't available to us at the time when you could fix it. We didn't have this higher balance sheet. So obviously, there's a lot in variable, but hopefully a lot of the variable will also come back in actually lower levels within the not-too-distant future. All right. And then I'm going to hand over back to Osman.

Thanks, Ockert. So what are the tools that make us achieve this thing? So you can see all the tools that make us who we are and what we are. So we continue driving our market leadership, I mean, on the vehicle side, on the Aftermarket Parts side, with talking to the OEMs, talking to the suppliers and then making sure that we deliver exceptional services to clients. And we look after those relationships, and the trick in this business is buy well and sell well, and look after your customers. It sounds basic, but that's the reality. If you don't buy well, you can't sell well. And if you're not selling well, you can't look after the customers. So it's something that is ingrained in the DNA of our group. It's becoming harder because some of our people got used to become order takers when there was a shortage of cars. We're changing that mentality with a harder sell now because there's more cars available, the customer has more choice, and we've got to get our products out there. So that's been one of our fundamentals in the DNA of Motus. The financials, I mean, we've been through all that stuff. So I mean, all of us have talked about the ratios and our WACC, and we talked about managing our costs in this business. So we continue that. On the capital allocation, these are the key ingredients: Working capital, car rental, CapEx, dividends, share repurchase and strategic acquisitions. Now when our debt to equity was low, we went for the share buyback, then we did the acquisition. But that doesn't mean we're going to be in this mode forever. So if you're going past 2024 where hopefully, you'll have the full acquisition income, which this year, you won't have full. About '24, you'll have everything. These are cash-generative business, so the debt-to-equity will come down. Either we'll do more acquisitions if they come our way, or the share buyback will still be an option. So it's not one or the other. We're just opportunistic businessmen that look at the opportunity and what works for us. If we get the acquisition, we're going to go for it. The share buybacks are not out of the reach, we will do that as well, so that will continue. And the other thing is that Ockert's talked about when we didn't have the cars, now we've got the cars. But remember, this is the working capital we like to hold here now, so we've achieved where we want to stay. We're not going to double our working capital from now going forwards. So we brought it up from a low to where we want it to be. In fact, what generally happens in the car rental industry that you pick up your fleet right up to Easter weekend and then you start de-fleeting. So we're hoping -- I mean, Ockert is talking 19,500 vehicles. We're hoping that will be at 16,500 by June. So that will generate the cash as well, and then we'll speak up with the fleets again from July onwards. And that's when we talk to you the next time, hopefully we'll give you a better debt-to-equity number as well. On the technology side, like I said, it's part of our business. It's no longer support service sitting in a building, in an obscure building. It's very much part of our business, and it's happening all the time. And we -- doing things to improve the individual business is just not at the center either. And most importantly, it's the people in your business. We now have 20,000 people in our business. So obviously, we've got to empower them, we've got to train them, make sure they're delivering the things that we want them to deliver, and we do that all the time. And obviously, we try and improve our recruitment processes so we can retain better, and hopefully, that helps with succession as well. And our BBEE targets, I've talked about gender, I talked about. And CSI, I have talked about as well. Okay. So again, I'm not going to go through every slide -- pull it on this slide, but what's Motus's strategy? Like I said, South Africa will be bolt-on. That means bolt-on to where you can maximize in either Aftermarket Parts or Mobility Solutions or in the Retail side of our business. In the U.K., there will be bolt-ons in the dealership side wherever they're in our regions. We can get the benefits in Australia, and obviously, the aided acquisition would be Aftermarket Parts, where we look at in the U.K. and Australia. So those are the areas where it could be more than bolt-on because that's an area where we're actively looking to grow because of -- it fits our strategy in terms of sustainability and cash flow. Okay. So if we look at the next 6 months, because all of you are concerned now. Your debt to equity is high, your interest bill was very high, you made the operating income and then you dished it out. We didn't. We dished it out for the right reasons because if my balance sheet debt-to-equity was 35%, 38%, you could accuse me on having a lazy balance sheet. I must give the shareholders money -- some money back. So what we've done is we've bought a business that we believe is going to help this foundation and the cash generation. So the working capital, like I said, hopefully stabilize at these levels, which we're at the top now, so we can stay there. We're not going to double from here onwards. Car rental, we're in a de-fleet situation, so that will generate cash. And the capital expenditure, which we always have in our type of business, and we think could be between ZAR 250 million and ZAR 400 million in the next while -- in the next 6 months. That's our target. And unfortunately, the problems at Eskom are not becoming shorter or we don't see light at the end of the tunnel quickly. So we're continuing with that investment strategy, and we're targeting about ZAR 250 million in the next 18 months for solar energy and other forms of energy because unfortunately, that -- we're not seeing that this thing will stabilize in the short term. And we can't continue investing in generators, they're expensive and they're inefficient and they're not friendly to our -- So we're actively now looking at -- we've got solar already, we spent about ZAR 100 million already. But we're looking at the next 18 months and saying, where do we need to upgrade? What can we do? Is there a new facility? And we've targeted ourselves ZAR 250 million over the next 18 months. So don't be scared that we're going to spend all the money by June, it's not going to happen because firstly, you've got to get the contracts out there. There's a shortage of supply at the moment. And then obviously, batteries, there's a shortage of batteries as well. So this thing is an 18-month journey, unfortunately, but that's where we are. And like I said, we'll continue paying the dividend and when the opportunity arise, share buybacks is not out of the window. It will still happen when it needs to happen. We want to bring the debt down, and our target has been 60% and 65% to June. Ockert is talking longer term, 12% to 15%. Hopefully, that will be by June 2024. But if you're looking at June 2023, we're hoping that by 60%, 65%, we'll bring this business to a comfortable level. We never want interest to choke this business. It's has always been a comfortable level that you can ride the storm. In case there's a hiccup down or up, you can accommodate it, and we believe the 60% to 65% will allow us to ride the storm comfortably. And then like I said, selective acquisitions. I mean, we're always looking. And is there another NPD in the pipeline? No. There will be bolt-ons in the pipeline, and we're looking at 2024, we look at a big acquisition as well. Okay. So how do we see the 6 months? And it's very difficult to talk about this because when you got here, half the traffic lights were not working. The roads have plenty potholes. You listen to the interview on radio that there were some Talibans coming here and they were not allowed into our country. You look at the Transnet problems. Everywhere you're looking, there's a problem. So how do I stand here and be optimistic with you when I just look at this? And you have the same problem because you watch the news this morning and you look at, you read about it, and it's very difficult to be optimistic. But that's our job as businessmen, to continually being optimistic and looking forward and do the best you can under the very difficult circumstances you find yourself. So what we're saying that we want to deliver operating profit growth through organic and through acquisitions, so that's what we want to deliver to you guys is an increase in this number. Our elevated finance costs, unfortunately, we can't switch this off. It will be with us till June. After that, we'll get the full cash flows from the acquisitions, whether it's Sandton or MPD or FAI, all those will generate the cash and the debt will come down. So we've been in higher interest area for a while, which will be till June. And after that, you'll see it come down as well. Our balance sheet, Ockert has been through the balance sheet. Very comfortable, solid position, good debt to equities, good shareholder equity, net debt to asset as well and the net asset value. It's there. You can touch us, you can feel us and you can see what our business is worth. And we're hoping that we'll have a strong cash generation in the next 6 months because of the de-fleets. Working capital, the guys will be moving stock. They've got a lot of stock in December, early January, but hopefully they will ride the storm and collect the cash. And what we're saying to you is we will hope to reduce the debt from current levels to June. If you're comparing to June -- December 2021, no, that was at the low that it's ever going to get. It's not going to get there. But we're saying that hopefully from December 2022 to June 2023, we can levelize our debts and reduce the debt and bring to that 60%, 65%. Okay. So firstly, I've got to acknowledge that my team members make me look good that I can -- that Ockert and I can stand up here to deliver the results. So we acknowledge all our 20,000 staff, the board members and management that are sitting over here. And my EXCO members, we've got Kerry here that looks after Mobility Solutions. Then we've got Niall Lynch, who looks very fancy in his red tie, looks after my importing business in Hyundai. Malcolm looks after Aftermarket Parts. That's where the acquisitions landed up. Berenice looks after sustainability, looks after transformation on the BE scorecards and risk management, and manages the PR as well when we get ombuds cases and things like that. Then you've got Thato, who looks after Mitsubishi. Gary looks after Kia South Africa, which has grown quite nicely in the last 3 years under his leadership. Shumani looks after Renault, turned it around from having the French as a shareholder. He's got us as shareholders, and he's turned that around quite nicely so we're quite pleased with that business. Ntando our Company Secretary, is sitting here. I know the other EXCO members, we've got Rainer, he's on the phone. He couldn't make it here. And we also are missing from the EXCO, Michelle is working from home today so she's not here, I think. That's our EXCO members, I hope I covered everyone. And then what's happened in our retail business, our leader has fallen ill. He's been medically boarded, and Ockert and I get the corner office. So when there's no one to lead, we lead. So the 2 people that run the retail business in South Africa is Ockert and myself. We share the responsibilities. We've taken that business and our leadership since July last year, and we should appoint a leader in the next month or so to replace that position. So it's sad that happened. He was with us for close to 20 years, fell ill and was unable to come back to work. So our prayers and thoughts are with Corne's family and hopefully spending quality time with his family in these difficult times that he finds himself in. But at the end of the day, we are in business, and that's what you guys are up to and then Ockert and I stepped into leadership positions. So over and above doing our day jobs, we do the night job as well managing the retail business in South Africa as well. So yes, I think we're very privileged that we've got great people that I've called out, great management team, great board members, great 20,000 staff that make all this happen. So thank you to each one of them, and thank you to you for believing in us and continue to invest in us. So we appreciate the support. Thank you so much. Okay. So Justine, who's been listening who's asking questions. Have you got any questions? And then I'll ask -- we'll take a few questions on the floor as well, and hopefully try and answer them.

There are 2 questions that have come through on the webcast. First one, what are current stock positions and availability across all your geographies?

So let's start with the U.K. There's a shortage of stock in the U.K. because their product is coming from Europe. So they are not out of it as yet, and it will take at least another 4, 5 months before they get out of it. Fortunately, that's not the biggest part of our business. It's a small part of our business, but there is paying there with stock availability. On the truck side, DAF, which is our biggest part of the business, we're getting good stock availability. We do from time to have problems that have Mercedes trucks in the U.K. Fortunately, the order books are there as they come, we deliver it. So it's a bit of a mixed bag in the U.K. Australia, there is a bit of a shortage, but these guys are managing well because it's a shortage, it's play in our favor. We saw what Ockert describe is the Australian margins, they're still benefiting from margins because there is an abundant stock. So whatever you've got, we're managing to sell at good prices. So yes, there's a bit of a catch-up there. Getting to South Africa, there was a shortage of cars right up to the end of December. In January, a lot of the ships landed, Hyundai, Kia, Renault, Mitsubishi, VW ships landed. Toyota is back up to production after the floods that they've had. They've caught up their production. They've now -- in November, December, they got back into production, so that supply is great. We've shown in our working capital, so we've got the stock. So I'm pleading with management that now, we're just trying to sell the stock. So stock is no longer a problem. They have pockets of stock not available, for example, if you want a specific model in a Merc or an Audi or a BMW, you may not get it. But that's in the minority rather than the majority, but 85% of our stocks here, we can sell. And I think the shortage of the past are no longer here now. We took it to continue selling the cars as we have them.

Okay. Next question, debt looks comfortable despite the acquisition and the investment in working capital. Are you perhaps looking at altering your dividend payout ratio?

So we've had a good 6 months. We've done the acquisition. We need to see how this pans out before we make that decision. The general guideline we use when we determine the dividend payment, which obviously the board approves with us, is about 35% of attributable income. So that's the general guideline. But if we sell all the cars, get all the cash in and can get to comfortable debt to 60% to 65%, we don't change that because we still think that we need to improve from there. So say we get to 2024 June and the debt to equity for simplicity is 35% or 40%, and I can't do share buybacks or I can't -- then we look at it. But then we're hoping when I'm at that level, then I can look at another acquisition because you know what's it like, success breeding success. I mean, we found the FAI. Because of FAI, people heard in the market, MPD came our way. So like that, we get opportunities all the time. So we think we'll have use for our money. But if it's not there, share buybacks are always an option and bigger dividends will be an option, but we don't know.

Next question, are you concerned around numbers in the Importer business over the next 24 months, particularly highlighting new entrants in the market?

Let's ask Toyota that question 10, 15 years ago. Did they worry about the Korean products come in? They must have been worried because there was another player in the market. So new players come all the time, you may just find a niche that you can live with. And we as Motus are very comfortable that the 4 brands we have, if we can hold our 20% share, 22% market share, we're very comfortable. Do we want to get to 50%? No. Do we want to be a 10%? No. So the teams, the 4 importers that I've talked about, are very comfortable that they will do their best to hold their market shares. Yes, there are new entrants. we've got the Haval, we've got Chery. We've got Suzuki doing a great job. But likewise, our 4 guys are doing a great job with their teams. So if we can hold the 20% market share, we're very comfortable. Remember, it's not purely the selling of the car. Then what happens is that they feed another part of the family, which is Mobility Solutions. Mobility Solutions then feeds them with their workshops and parts. So you can see it's a continuous cycle, and if we hold the 20%, this family is fit to grow its business comfortably. But at 10%, we'll get into trouble, so that's not where we're going to get to. But we're very fortunate because, I mean, we've got OEMs, Niall and Gary and Shumani and try to talk to the importers all the time, so they're very aware of what units they want in South Africa, and our job is then to deliver. And the pricing or the currency is a problem, they'll come to the party and help. We could take a bit of a knock sometimes, they take a bit of a knock sometimes. But we've been in business -- in the importer business over 20 years, and we always find the middle road. So I'm very comfortable with the 4 leaders in the import business, they look after their market share.

Next question is around car rental. Just around the margins and whether we feel that the margins may decrease as rental peers look to refleet their fleet sizes closer to pre-COVID levels?

Do you want to take that on others? I'll be standing here for the rest of the time.

That's fine. So yes, obviously, you'll get these ups and downs through the whole market. So the whole market will probably in the next year, by December next year, probably be at even a higher level than what we saw this year. But I think the percentages of market shares even through COVID hasn't materially changed. And the margins on those, obviously, it depends on how much you could get out to the market, yes.

Ockert, another one for you just around the inventory valuation. So with inflation in current car prices, is there a concern around inventory value?

So on the inventory valuations, I think the first one was more of a concern around June. At that specific time, we needed to make sure we had proper valuations for the vehicle standing in due to the fact that there was almost a bit of a bubble being created within the used car space. In the new car space, because of the inflation pressures we have continuously, you will always have a slight increase over a longer period of time, and that's probably what you will see. So no concerns there.

If we can just check whether there are any questions there in the conference room.

There are questions there at the back.

It's [indiscernible] of PTY Limited. I just want to know, I noticed elsewhere that they use very weird ways to calculate the cost of equity, things that are definitely not acceptable. So I want to know how did you calculate the cost of equity?

I'll ask Professor Ockert to answer that.

Yes, so our weighted average cost of capital, which is effectively with equity is it's calculated by looking at the different regions in which we operate. So for every one of those, we've got a specific rate based on the actual usage, so that's the issues we obviously will use and then weighted average specifically towards that. And that's one of the reasons why you would see that it actually did increase even in this period. So that's the short answer. I bet we have another discussion about the longer discussion. Sounds like you've got a long discussion on, but that's fine. We've just been through our calls around value creation, so I'm on your page.

That's why i am calling you professor, Ockert, because you spent a week in Pennsylvania, you spend a week in Madrid, you spent a week in Singapore to be educated from your question.

That's Kwame from [ Long Mark ]. Osman and Ockert and team, well done on a very good set of results. Just one area of concern. If we look at your parts business, particularly your International Parts business. If we strip out the ZAR 146 million from your acquisitions, it would suggest that the core business actually went backwards by about ZAR 70 million odd-ish, so it moved from ZAR 97 million down to about ZAR 27 million. Can you kind of shed some light on what happened there?

Yes. So the ZAR 146 million, let me just ask you since you're at the mic. The ZAR 146 million, is that the EBITDA number you quoted?

Yes, the EBITDA number.

Okay. So let's say EBITDA number, and I think the other one you're comparing against is the operating profit. So obviously, there's a bit of a difference between the 2. So now the Asia business that actually substantially increased in any event without the acquisition, but you need to take out that depreciation piece. There is something in the dot.

Mr. Arbee, are you prepared to give an indication of what finance costs will total in the half year to June?

Like I said in the presentation, the finance costs wouldn't come down from that number. They'll go slightly up because remember, we did the acquisition in third of October, so those borrowing costs were not in for the full 6 months. If you take the working capital, that will be a straight line. If you take car rental, you'll get some negatives because you'll get the cash in. So you should -- you'll have the acquisition debt in there, but I don't think acquisition debt is coming down. It may grow, but from December. Yes, the interest number.

But you obviously didn't have it for the full 6 months, so you're going to have it now for the full 6 months. So reality is, yes, it will be slightly higher than the number but not also that material because you already have it in 4 ways, piece of the period and your car rental is coming down, yes.

I'm referring to the information provided on Page 20 by Mr. Janse van Rensburg. It deals with the forward exchange cover from the importers. It states that the U.S. dollar was purchased at -- they have forward cover to USD 16.65. Now this is rather fascinating given that the dollar is now over 18. Consequently, it's easy to work out that there's a theoretical profit hanging around that can be shared either between -- either by the manufacturers importers in full or together with you. The very fact that you've given this information is in itself a little bit of a puzzle. But given that, I'd like to know what is the intention, if any, of that additional theoretical profit? How do you intend making use of it, if at all possible?

I'm very glad you're calling out initially as theoretical because you're right, it's unrealized, okay. So it is around hedge effectiveness that you will actually see it. And if you look in the full set of the financials that you would have as well, you can actually see the full amount because it sits as hedging reserves in the equity side. So what we do as an overall principle is we would try and take hedges for longer periods to give our importer some certainty around what the price mechanisms are that they need to cater for as well around pricing, et cetera. So yes, you're right. At a particular point in time, you may be in the money, if you call it that. And as you can see with those hedges in the money, you can just as well, I mean, we know we've got quite a volatile currency stream the other way. We would very -- I would almost say never -- very, very seldom and then rare, I would call it, ever cancel a contract because we want to look at the long-term sustainability of the product range. And as soon as you cancel it, you would then have to replace it with something much more expensive. So there could be this immediate short-term gain to alleviate some sort of pressure, but the reality is we would never-- we haven't done this in the past and probably don't want to do it in the future either. What you will see is that profitability coming through within our margins within effectively the next 12 months then.

I think it's probably for Ockert, coming back to financing. Understanding of the ZAR 3.7 billion acquisition, you said you used debt facilities plus cash. How much debt do you have in the U.K. still, and what rate? And short-term, long-term, and what rate, effective rate do you have on it?

Yes. I don't know if we call out the specific rates in the booklets, I probably don't want to give it away, tell all the bank this is exactly what I'm borrowing at. It is unfortunately mostly variable, and then it's linked. It's in sterling and it's linked to the SONIA. It's linked to SONIA plus a margin, but it is mostly variable the amounts that we borrowed. So how we structured our operations there is we've got a foreign entity that would be the treasury company on that side, effectively borrowing in pounds, so you don't have the additional concern around the South African debt on that side. So it's in pounds, and it's in a -- it's SONIA plus.

And how much debt do you actually have in the U.K. then? How would that be -- sort of ZAR 2 billion or so?

Yes, in terms of -- there's about ZAR 2 billion there.

ZAR 2 billion, GBP 100. Yes.

Plus a little bit of that we had, the assets.

Can you just talk a little bit more about the acquisition multiple on the Mercedes business, which is about 11x on an EBITDA basis? I think most of us will agree 5.3x for the MPD acquisition sounds like a really good price. But I'm curious to know why you would spend so much? Why that multiple looks so high?

It's in the eyes of the beholder, isn't it, because it depends how you determine the price. But remember, when we bought the business at ZAR 715 million, quite a bit of it is funded by the floor plan. So what check did I write out and what check did the OEM give me to take their stock line? So be careful. If you're taking the price divided by the ZAR 715 million, you'll have an answer. If you take the income, I can generate less the interest, my price is only ZAR 428 million or whatever after the floor plan. So it depends which number you're using. In the MPD, I have no financing from the OEM. Here, I get financing from the OEM. So the way to do this number is take the stake of your interest and divide it by the ZAR 428 million and not the ZAR 715 million because remember, that floor plan came as a package. You've got the stuff and you deduct it and you only pick ZAR 428 million. So I think -- I'm not sure how you did your number, but the way I did it, I think the 66 minus the interest divided by the ZAR 428 million, I come to a different answer. And that's the one thing that you've got to do. And the other thing is that don't underestimate the synergies we can bring to the party because we own now from Boxberg, [ Estate ], [ Glen ], Sandton, [ Constantia ], [ Brinston ] and [indiscernible], and we've got the trucking business. So the family is -- it's protecting the family, but not protecting the family at all cost, at a reasonable price.

One last question from me. Can you guys maybe tell us a little bit about the used vehicle market? What's happening in the market in terms of prices, and how you see things panning out in the next 6 to 18 months?

Okay. So maybe I won't answer that because I'm not in operation. So maybe Niall is going to tell us what's happening in the used car market. That's why you get the corner office.

Yes. So I think we all saw a massive bubble in the used car market which corrected very quickly. I mean, I think we were all taken -- quite taken aback by how quickly used car prices came back. If the used car market has normalized, so we're back at sort of paying kind of trade prices for trade-ins and those types of things, and I can't see it changing much over the next 6 to 8 months would be my view. So I think we're back on a normal trading cycle. Car rental, we see car rental stocks coming back. So I think we're in a more normalized market. We're in an artificial market previously, and I think it's now kind of rectified itself.

Okay. Can we take one more question then we run out of time because people need to do their full-time jobs.

Congratulations. Roy Campbell, RMB, Morgan Stanley. Maybe going back to the acquisition that Anthony was talking about. With the Mercedes Benz agency model in mind, perhaps just help me understand what then the floor plan is in place for, and then the intangible assets that have been acquired?

Okay. So with the agency, you don't own the new car, but you own the pre-owned stock and you've got the parts with you as well. So that was that money that they gave us as floor plan, we use it for the pre-owned stock. So you're quite right, that I didn't use it for new cars because I don't own new cars. Because as you place an order, I'll deliver your new car and I get the money from the banks. We set that all, but it was on the pre-owned. And remember, the Mercedes dealership wasn't purely a passenger business. It had the role of a trucking business as well, and there, you own the stock, the truck stock. So the trucking business is not an agency, the passenger side is, so we have to own some stock there, the pre-own stock in trucks and in passenger and a bit of parts, yes. Okay. Thank you, everyone. Thanks for your time. Thanks for joining us. We will do some interviews for the rest of this week and next week, so we'll be seeing some of you. But if there are any questions, I mean, Justine's e-mail address is on the website and in the booklet that you've got. Send an e-mail, and we'll try and respond to that as best as we can. Thank you, and all the best, and thanks for the support.