The South African car dealer making R1.3 billion every month

South African car dealer Combined Motor Holdings (CMH) recorded a total group revenue of R8.1 billion in the six months ended 31 August 2026, up from R7.6 billion in the prior corresponding period.

According to the dealer’s board, the period under review was characterised by global conflict, resulting in higher oil prices, an upward revision in the local inflation outlook and pressure on household incomes.

Despite these challenges and headwinds, the group returned an 18.6% increase in headline earnings off a 6.6% hike in revenue, which the directors commended.

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.

The dealer’s external revenue reached R7.57 billion in the last six months, which was a 6.3% increase from R7.12 billion in the prior period, while its operating profit rose to R223.3 million.

Despite this performance, the CMH board expects the rest of the financial year to bring tough economic trading conditions.

“The new vehicle market will remain heavily oversupplied and highly competitive,” it said.

“Manufacturers will apply pressure, threats and incentives on the dealer network to move their stockpiles and maintain market share.”

Directors also expect fuel prices to remain at record highs and, coupled with likely further interest rate pressure, continue to create strain for embattled consumers.

The company’s car hire business, First Car Rental, continued to be a high-margin driver, earning R415.5 million in external revenue in the last six months.

“High fuel prices increase the cost of moving the vehicles between cities, and from drop-off areas to the nearest depot and back,” CMH directors commented.

“The recent interest rate hike will have a significant impact on fleet holding costs.”

It added 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.

CMH continues to expand operations

Earlier this year, CMH announced plans to buy 13 properties used by its dealerships from three of its executive directors for R745 million.

The transaction was announced on the Johannesburg Stock Exchange News Service (SENS), detailing 13 separate rental enterprises and their underlying properties.

All of the properties are already leased and occupied by businesses within the CMH group, meaning the deal will not result in an expansion of dealership locations.

Seven of the properties being bought are located in Gauteng, while the other six can be found in KwaZulu-Natal.

The properties are being bought by CMH Management, a subsidiary of CMH, from executive directors BWJ Barritt, SK Jackson and JD McIntosh, and their associated family trusts.

According to our sister publication, BusinessTech, tje R745 million cash purchase is below the properties’ combined independent valuation of R780 million.

This means CMH is effectively getting a discount of around R35 million (4.5%) of the assessed market value.

The purchase will be completed using R395 million in cash, along with a R350 million bank loan, since the company has maintained surplus cash above operational requirements for years.

It said this gives it the capacity to make a substantial investment without draining its liquidity.

Historically, CMH has been both an operator and tenant of its dealer properties, and reported lease liabilities of R544.7 million in February 2026.

Its plan to purchase the 13 properties will reduce its lease and eliminate rental payments on the acquired assets, which will have a positive effect on its earnings.

This is because the rental expenses it will eliminate outweigh the costs of the purchase, such as the finance cost of the loan and the lost interest on the cash.