Metair's turnaround lifted operating profit 28% — and kept CEO O'Flaherty to 2028
Restructured around OEM volumes, out of Turkey and into aftermarket parts, Metair swung Hesto to profit and cut net debt — shares jumped 15%.
What was changed
On March 26, 2025, South African automotive components and battery maker Metair extended CEO Paul O'Flaherty's tenure to the end of 2028, citing his positive contribution to implementing the group's turnaround plan — and shares jumped almost 15% in early trade. The same morning it reported operating profit up 28% to R603m for the year to end-December 2024, on revenue from continuing operations down 2% at R11.8bn amid lower production volumes at local original equipment manufacturers, particularly Toyota SA.
The turnaround rebuilt the company around the volumes it actually receives. "We've restructured the company to fit our business to OEM volumes. We're geared up for lower or higher volumes and are re-addressing our footprint to be more flexible," O'Flaherty said, adding that fixed overheads were being reduced and made more variable to adapt to fluctuating OEM demand.
Metair also disposed of its Turkish business Mutlu Akü, reducing exposure to hyperinflationary and high-interest-rate environments, and bought aftermarket retailer AutoZone for R278.5m in 2024. The acquisition is expected to provide a platform for growth in aftermarket automotive parts and services, diversifying revenue streams away from OEM reliance, with O'Flaherty expecting AutoZone margins of 5%-6% in a market of about 13 million cars needing parts.
The reset showed up in the units and the balance sheet: Hesto Harnesses reported a R253m profit before interest and tax against a R608m loss the prior year, and a debt restructuring completed after year-end cut net debt to about R4bn from R4.5bn. O'Flaherty's top priorities for the next three years: cash flow to support the debt, expanding the AutoZone-led aftermarket, and aftermarket parts opportunities in Sub-Saharan Africa, while ensuring components suit hybrid models as South African EV adoption lags.
Why it worked
Restructuring fit the cost base to OEM volumes instead of waiting for volumes to return, converting fixed overheads to variable.
The Mutlu Akü disposal removed hyperinflation and high-interest-rate exposure from the group.
The R278.5m AutoZone acquisition builds an aftermarket leg whose revenue does not hinge on OEM production cycles.
What can be applied
Fit the cost base to the volumes you actually get, then buy a second revenue stream that does not depend on the first one's customer.
Aftermath
The board said the extension provides leadership certainty and the runway needed for the group's long-term growth strategy and succession plans. CFO Anesh Jogia resigned but will serve his notice until the end of June 2025. By market close, shares had pared most of the day's 15% gain.