News

Trading and operational update, and trading statement for the six months ended 30 June 2025

Metair turnaround momentum continues

Salient features:

  • Good progress made in strengthening the resilience of underlying businesses
  • Hesto’s performance well-entrenched, and AutoZone stabilisation continuing
  • SA Obligor refinance of R3.3 billion and Hesto Obligor refinance of R1.4 billion successfully concluded
  • Volumes at key South African OEM customers stable over the period
  • No tariff turmoil impact on Metair, as its OEM customers do not supply into USA market

For the six months ended 30 June 2025 (H1 2025), Group revenue is expected to increase by between 52% and 54% period-on-period (H1 2024: R5 672 million). This is largely driven by the inclusion of Hesto Harnesses (Hesto) as a subsidiary with effect from 1 April 2025, and AutoZone Holdings Proprietary Limited (AutoZone), which was acquired in December 2024.

Group earnings before interest and taxation (EBIT) is expected to range between R440 million and R460 million (+24% and +30%) (H1 2024: R354 million) at an overall EBIT margin of between 5.1% and 5.3%. EBIT was positively impacted by various recovery initiatives, stronger volumes and the inclusion of Hesto for three months from 1 April 2025. This was offset by the inclusion of anticipated losses at AutoZone for the period, which is still in a recovery phase as it emerges from business rescue.

Measures continue to be successfully implemented to restructure, right size and close certain operations, which has enabled Metair to dynamically address market shifts and volume variability. The focus for the current period has been on manufacturing excellence in delivering to Metair’s Original Equipment Manufacturer (OEM) customers as well as bedding down the newly-acquired AutoZone business to enable growth in the Aftermarket Parts and Retail segment.

Metair CEO, Paul O’Flaherty, commented, “Building on the progress we achieved in 2024, the Group’s manufacturing and production have been further optimised and our stringent focus on efficient project management and operational improvements has resulted in a more flexible operating model, ensuring that the business can deliver optimally to its customers. Furthermore, and while there is an obvious indirect impact on the South African local economy, it is pleasing that we do not expect the tariff turmoil to have a direct impact on our OEM customers, as these customers do not supply into the United States market”.

Despite some market headwinds, it is encouraging that volumes at key South African OEM customers have stabilised and remain in line with forecasts for the current period. The continued improvement initiatives at Hesto, the Group’s major wiring harness supplier, resulted in higher revenue and improved operating profit.

In the aftermarket sector, consumer demand remains subdued and as expected and communicated at the time of AutoZone’s acquisition in 2024, this business is currently in a stabilisation phase consistent with expectations. Encouragingly, the integration process is already delivering synergies across Metair’s automotive aftermarket and distribution operations. O’Flaherty added,“This acquisition has strengthened our strategic positioning in the aftermarket sectors and provides a robust platform for future growth. We expect that AutoZone will become a meaningful contributor to Group earnings by 2026”.

Metair’s Original Equipment Manufacturer (OEM) Segment

Total local market vehicle production increased by approximately 4% year-on-year over the six- month period, from c. 270 000 vehicles in the prior period, to c. 282 000 vehicles over the first half of FY2025, based on internal estimates.

  • OEM revenue for H1 2025 is expected to increase by between 65% and 70% (H1 2024: R3 287 million), with EBIT margins expected to improve to between 6.5% and 7.5% (H1 2024: 6%). This growth is primarily driven by increased volumes supplied to key OEM customers relative to the prior period, in line with expectations, and the inclusion of Hesto as a subsidiary from 1 April 2025.

  • The EBIT margin increase is supported by cost reduction and operational improvement initiatives implemented during 2024 and continuing into 2025. If Hesto had been included for the full six months in both comparative periods, OEM revenue would have increased by between 7% and 9%, and EBIT margins by between 6% and 7% (H1 2024: 5%).

Metair’s Aftermarket Parts and Retail (AFM) Segment

  • Revenue from the AFM Segment is expected to increase by between 32% to 35% (H1 2024: R2 385 million), primarily because of the inclusion of AutoZone

  • EBIT margins are expected to decline to between 3.6% and 3.8% (H1 2024: 7.3%) due to the expected current period EBIT loss recorded by AutoZone (which is in a stabilisation phase) and the EBIT margins at First Battery returning to normalised levels of between 8% and 9%, compared to the once-off higher margin of 14% in H1 2024. If AutoZone is excluded for the current period, then EBIT margins for this segment are expected to be between 6% and 7% (H1 2024: 7.3%), which is in line with forecasts.

At First Battery South Africa, sales volumes declined slightly in H1 2025, with c. 770 000 batteries sold compared to 786 000 in H1 2024. At Rombat SA in Romania, volumes sold improved by 6% to 1.426 million batteries (H1 2024: 1.345 million), supported by an improvement in both local aftermarket and OEM sales.

Conclusion

Metair expects that its financial results for six months ended 30 June 2025 will differ by at least 20% from the financial results for the previous corresponding period, and Metair has therefore also issued a trading statement.
Its total Group earnings guidance, including discontinued operations, are forecasting headline earnings per share (HEPS) of between 63 cents and 67 cents, compared to a headline loss per share of 3 cents in H1 2024; and a loss per share of between 90 cents and 95 cents (H1 2024: loss per share of 3 cents) due primarily to the once-off net capital loss of approximately R300 million relating to the accounting for Hesto as a subsidiary with effect from 1 April 2025.

In respect of the Group’s earnings from continuing operations, Metair expects to report HEPS of between 69 cents and 72 cents, being a decrease of between 6% and 10% (H1 2024: HEPS of 77 cents); and a loss per share of between 80 cents and 90 cents (H1 2024: EPS of 77 cents) due primarily to the once-off net capital loss noted previously.

O’Flaherty concluded, “We are pleased with the progress in the past six months, where there has been a marked recovery in volumes and improvement in margins on the back of the restructuring and optimisation efforts of the Group. The improvement in Hesto’s performance is now well-entrenched, and the initiatives to stabilise AutoZone are bearing fruit. Furthermore, the restructured debt package has provided the Group with a sustainable platform from which to further reduce debt”.


*The pro forma financial information contained in this announcement has been prepared in accordance with IFRS, is provided for illustrative purposes only and, because of its nature, may not fairly represent the financial performance of the Group

   Back to News