23/11/2018 - 13:45

AHG hits six-year low on trading update, first strike

23/11/2018 - 13:45

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Automotive Holdings Group’s shares have slumped to their lowest point since 2012, after the company’s trading update revealed that profit at the start of this financial year was lower than anticipated.

AHG hits six-year low on trading update, first strike
AHG managing director John McConnell at today's AGM. Photo: Michael Bain

Shares in Automotive Holdings Group have slumped to their lowest point since 2012, after the company’s trading update revealed that profit at the start of this financial year was lower than anticipated.

AHG is now forecasting full-year net profit after tax between $56 million and $59 million, after posting an operating net profit of $11.7 million from July to October this year, a decrease of 45.9 per cent compared with the same four month period in 2017.  

The West Perth-based company recorded a net profit after tax of $74.8 million last financial year.

AHG shares were trading at $1.66 each at 1.30pm AEDT today, its lowest point since January 2012.  

They rallied to finish at $1.70 each, a fall 6.32 per cent from yesterday’s close.

AHG managing director John McConnell said a weak private buyer market locally and in other states was a key factor behind the profit slump.

“The entire private buyer market has been weaker, with the east coast, especially NSW and Victoria, being affected by a falling housing market and the negative flow‐on effects to consumer confidence and auto sales,” he said.

“Of course we are also heavily exposed to the Western Australian market, which is yet to see any rebound in private sales.”

New vehicles sales in WA have decreased each year since 2012, but in a statement to the ASX the company said it was well positioned to benefit from the “inevitable” recovery of the state’s economy.

AHG said there were some positive signs in WA, with steady growth in truck sales as mining and energy projects are launched.

Meanwhile, at its annual general meeting today, 27.62 per cent of AHG shares voted against the remuneration report, which delivered a first strike.

The vote on a remuneration report is non-binding.

All other motions were passed at the meeting.

 

 

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