Finance Ghost: Super Group’s M&A activity is repositioning the group

Super Group tends to be synonymous with the automotive value chain. After all, the Dealerships segment contributed 51.8% of group revenue in the year ended June 2026(1). But if you dig deeper, you’ll find that the Supply Chain segment contributes more than half of operating profit.

There are structurally different segmental margins at play here, making it trickier to classify Super Group in a particular sector.

A further nuance is that the Supply Chain segment has historically been heavily exposed to the automotive sector, a risk that Super Group has been taking decisive action to try and address.

Supported by earnings growth, the share price has increased 28% over 12 months(2). But the year-to-date move is -7.5%, indicating that the share price hasn’t been immune to a challenging macroeconomic and geopolitical environment.

With interesting M&A and capital allocation strategies at play here, Super Group is actively responding to the disruption in the automotive value chain.

Management struck a bullish tone in the latest earnings release, but will that be enough to put some positive momentum back into the share price? Or will investors remain cautious despite the underlying progress?

Follow the profits, not the revenue

It’s not unusual for a diversified group to have structurally different margins across its segments. Super Group is just an amplified version of this phenomenon, particularly when you compare Fleet Solutions and Dealerships.

The Dealerships segment generated 51.8% of revenue, but only 26.6% of operating profit. Meanwhile, Fleet Solutions delivered just 3.5% of revenue and 18.4% of operating profit, showing that the margin in Fleet Solutions is much higher than in Dealerships. As the anchor for the group, the Supply Chain brought in 44.7% of revenue and 55% of operating profit.

Based on the operating profit split, investors who view Super Group as merely another member of the JSE automotive stable alongside Motus and CMH may be missing an important part of the story.

Supply Chain is carrying the heavy load

The Supply Chain generated over half of group operating profit in the latest period, making it the most important segment in the group. It has exposure to a number of underlying themes and geographies.

In South Africa, Super Group operates in the commodity transport sector, serving coal and copper customers. This means that the performance in the mining industry has an impact on the numbers. There are also industrial logistics activities, so Super Group needs to navigate the broader concerns around the deindustrialisation of the South African economy.

The consumer logistics business has arguably better fundamentals at the moment, with Super Group locking in upstream benefits from the increased activity in quick-service restaurants and FMCG players. In the outlook statement for the latest results, management highlighted the consumer supply chain sub-division as being “expected to perform strongly, supported by the onboarding of new customers and the expansion of service operations.”

If we look abroad at the rest of the Supply Chain segment, we find an interesting approach to the European market that leads us neatly into the Dealerships business as well.

Avoiding the European automotive disaster

Volkswagen has announced plans to cut 100 000 jobs(3) and reduce production in Germany in the coming years. The disruption to the global automotive sector is clear to see, creating considerable concerns further up the value chain.

With a front-row seat to this disruption in their Dealerships segment, Super Group chose to dispose of the InTime operations in 2025(4). This helped reduce exposure to the growing industrial risks in Europe (and especially in Germany).

As part of that deal, Super Group opted to retain Ader, the Spanish logistics business. This is a region that has attracted investment from businesses in the consumer value chain, as evidenced by the increase in the number of JSE-listed property companies actively executing and seeking deals on the Iberian Peninsula.

With exposure to consumer-focused logistics categories such as home delivery, commercial distribution and outsourced logistics services, this business appears to have lower customer concentration risk than the previous focus on the European automotive value chain and the German economy.

They are doubling down on this strategy, with the acquisitions of EC Express and Gestservi during the year further bolstering the Spanish platform. They are also in the process of negotiating the disposal of a 78.82% stake in AMCO, a UK and European logistics business. Super Group only acquired AMCO in 2023(4), showing just how quickly the fundamentals can shift in this industry.

A willingness to actively reshape the portfolio (rather than being anchored to historical decisions) is important when dealing with rapidly changing sector dynamics.

And there’s no better place to see those dynamics playing out than in the Dealerships business.

More than just transporting cars: Super Group also sells them

Super Group’s Dealerships have required careful management in the wake of disruption by Chinese and Indian brands. The group has reduced exposure to European brands further up the value chain (as discussed above), and they’ve used the Dealerships business to lean into the Chinese and Indian brands from a retail perspective.

The South African business is described by management as delivering an "outstanding overall performance." Revenue increased 12.3%, although this must be seen in the context of the excellent new vehicle sales in the broader South African market. Rivals like Motus(5) have also posted the best local sales growth we’ve seen in years.

Better volumes aren’t a guarantee of operating margin heading in the right direction. In fact, as the mix has shifted from luxury brands towards cheaper Chinese and Indian alternatives, operating margin has declined from 3.75% to 3.52%. A reduction of 23 basis points might not sound dramatic, but it becomes meaningful in a business that already operates on extremely thin margins. As a result, operating profit increased by only 5.5%, well below the revenue growth rate.

The UK Dealerships business is another area where Super Group has acted decisively. They have closed their Hyundai and Suzuki dealerships, while the KIA dealerships remain classified as held for sale.

Here’s another data point from the UK Dealerships business that shows the level of disruption: while Ford volumes were down 2%, Omoda and Jaecoo volumes surged 228.5%.

Unlike in South Africa, the change in mix has been extremely beneficial for operating margin, which has nearly doubled (from 1% to 1.8%). Despite revenue falling 1.6%, operating profit jumped 174.2%.

Fleet Solutions punches above its weight

Fleet Solutions generated only 3.5% of revenue in the latest period, but it contributed 18.4% of operating profit.

A significant driver of this growth was the 70% acquisition of DIG Group, a mining-focused plant and equipment hire business. This R448 million deal was finalised in February 2026. DIG contributed R103.9 million of Fleet Solutions' R441 million operating profit despite being included for only four months of the financial year.

This speaks directly to Super Group’s diversification strategy, as this is a world far removed from the automotive value chain.

Capital allocation is key

With varying capex intensity across the segments, as well as the ongoing M&A activity, Super Group’s capital allocation is important to keep an eye on.

As an example of how this can play out for investors, the proceeds from the disposal of SG Fleet funded a special dividend of R5.54 billion paid to shareholders in June 2025. It’s important to keep that in mind when viewing a long-term share price chart, as the group was made significantly smaller through this substantial distribution of value to shareholders.

Looking at free cash flow, a jump in operating cash flow from R1.96 billion to R2.44 billion shifted the group from a free cash outflow of R38.7 million to an inflow of R399.1 million. This is a reminder of the underlying volatility that shareholders can experience in this group.

Over the past two years, Super Group invested R681 million in maintenance capex, largely related to vehicle replacement in the Supply Chain business. Expansionary capex amounted to R1.322 billion, almost double the maintenance spend. The company is focused on growth rather than simply harvesting cash flows.

The bottom line

The 6.2% revenue growth in the latest period doesn’t tell the full story. Operating profit was up 26.6% and HEPS increased 36%. These are clearly strong results.

But the more interesting question is: how should investors classify this business? Is this still primarily a play on the automotive sector, with Super Group’s strategy able to drive growth despite disruption? Or has there been enough diversification for investors to see Super Group as a broader logistics play?

And if the latter argument holds, then does diversification into areas like mining logistics actually improve the appeal of the group? Could the consumer supply chain focus be the source of better growth and earnings in years to come, or does it introduce yet another layer of risk?

This is a complex group. One thing is for sure: it’s an oversimplification to refer to Super Group as a dealership, or even as an automotive value chain player. Recognising this limitation in comparability, it’s interesting to note that Super Group’s P/E multiple of approximately 5.3x is lower than automotive sector peers Motus Holdings and CMH, at around 6.5x and 7.2x respectively(6). The market seems to be taking a cautious approach to the value of the underlying earnings mix.

This reflects the investment debate currently facing the company.

Disclosure: The Finance Ghost does not hold a position in Super Group at the time of writing. BROKSTOCK, its employees, representatives or related parties may hold positions in the financial instruments discussed.  

(1)  All financials sourced from Super Group’s results for the year ended June 2026

(2)  Google Finance, accessed on 10 September 2026

(3)  Widely reported in the press, including the Wall Street Journal

(4)  Super Group’s Milestones page

(5)  Motus Investors Results 

(6)  Moneyweb, 10 September 2026

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