In the six-month period ending 31 August 2026, South African car dealer Combined Motor Holdings (CMH) saw its total group revenue climb to R8.1 billion, marking an increase from the R7.6 billion reported in the comparable prior period.
During this time, the wider picture was impacted by conflict, which led to a surge in oil prices, an adjustment in the local inflation forecast, and added pressure on household finances, as noted in local reports.
Notwithstanding these obstacles, CMH achieved an 18.6% increase in headline earnings, supported by a 6.6% rise in revenue, a performance that garnered praise from the company’s directors.
Core operations fuel revenue growth
CMH’s motor retail and distribution business, its core function, was the primary engine of the group’s turnover, accounting for 93.4% of total external revenue.
External revenue for the dealer reached R7.57 billion, reflecting a 6.3% increase from the R7.12 billion reported in the prior period, with operating profit rising to R223.3 million.
Despite this upbeat performance, the CMH board anticipates challenging economic conditions for the remainder of the financial year.
According to the directors, “The new vehicle market will remain heavily oversupplied and highly competitive.”
Furthermore, they noted, “Manufacturers will apply pressure, threats, and incentives on the dealer network to move their stockpiles and maintain market share.”
The directors also foresee fuel prices remaining at record highs, which, combined with potential further interest rate increases, will continue to strain consumer finances.
Car rental business sustains high margins
First Car Rental, the company’s car hire business, continued to generate high margins, with external revenue of R415.5 million over the last six months.
CMH directors commented that “High fuel prices increase the cost of moving the vehicles between cities, and from drop-off areas to the nearest depot and back.”
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They also stated that “The recent interest rate hike will have a significant impact on fleet holding costs.”
The company noted that First Car Rental’s forward reservations book bodes well for the summer season, and the fleet life optimisation should ensure that the vehicles are well priced next year.
Expansion through property acquisition
Earlier in the year, CMH announced plans to acquire 13 properties used by its dealerships from three executive directors for R745 million, as disclosed on the Johannesburg Stock Exchange News Service (SENS).
The transaction involves 13 separate rental enterprises and their underlying properties, all of which are currently leased and occupied by CMH group businesses, meaning the acquisition will not lead to an expansion of dealership locations.
Seven of the properties are situated in Gauteng, while the remaining six are located in KwaZulu-Natal.
The purchase is being made by CMH Management, a subsidiary of CMH, from executive directors BWJ Barritt, SK Jackson, and JD McIntosh, along with their associated family trusts.
The R745 million cash purchase price is below the combined independent valuation of the properties, which stands at R780 million, resulting in CMH effectively securing a discount of around R35 million (4.5%) off the assessed market value.
The acquisition will be funded using R395 million in cash and a R350 million bank loan, leveraging the company’s surplus cash reserves that have been maintained above operational requirements for years.
Historically, CMH has operated as both the owner and tenant of its dealer properties, reporting lease liabilities of R544.7 million as of February 2026.
By acquiring the 13 properties, CMH aims to reduce its lease obligations and eliminate rental payments on the acquired assets, which is expected to have a positive impact on its earnings, as the savings from eliminated rental expenses outweigh the costs associated with the purchase, such as loan finance charges and lost interest on the cash.
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