West Perth-based Automotive Holdings Group has swung to a record net profit after tax of $33.6 million for the six months to December 31 2009, after improved market conditions with an increase in demand in the new and used vehicle markets.
West Perth-based Automotive Holdings Group has swung to a record net profit after tax of $33.6 million for the six months to December 31 2009 after improved market conditions with an increase in demand in the new and used vehicle markets.
The full statement is below:
Automotive Holdings Group, Australia's largest automotive retailer, today announced a record net profit after tax of $33.6 million for the six months to 31 December 2009.
This includes the profit on the sale of carsales.com shares as announced in September 2009. The underlying profit, net of the sale of carsales.com shares was $28.7 million and represents 157.9% of pcp on Group revenue of $1.6 billion (100.4% pcp).
EBITDA improved 15.0% to $57.9 million, while the group EBITDA margin was stronger at 3.6%, up from 3.15% previously.
Earnings per share excluding unusual items was 12.7 cents (9.5 cents previously) and the Directors have declared a fully franked interim dividend of 7.0 cents per share (4.0 cents previously). The record date is 19 March 2010 with the dividend payable on 6 April 2010.
AHG Managing Director Bronte Howson said the underlying interim result was a record performance in improved market conditions with an increase in demand in the new and used vehicle markets, continued inventory control and consumer sentiment remaining high².
"The performance of our Automotive division was strong and it was encouraging to see the EBITDA margin improve to 3.05% (2.5% previously), and underlying NPBT nearly doubling to $31.2 million ($15.7 million previously)," said Mr Howson.
"The contribution from Logistics included a solid performance from the Transport and Cold Storage segment and a steady result from the Other Logistics segment despite tougher trading conditions".
¹ Excluding profit on sale of carsales.com shares - $4.92m (net)
² Westpac-Melbourne Institute Survey of Consumer Sentiment - 10 Feb 2010
Automotive
Underlying EBITDA for the automotive retailing division was $42.9 million (123.4% pcp) on revenue of $1.4 billion (100.9% pcp).
"The Federal Government's economic stimulus package and investment allowance continues to have a positive impact on automotive sales volumes," said Mr Howson.
"AHG has a strong order book going in to the second half of FY10 and with consumer sentiment remaining high, sales are forecast to remain stable.
"National new vehicle sales in the December half improved 2.69% compared to the same period last year, while AHG's Australian new vehicle sales increased approximately 6%. AHG's used vehicle sales increased 5.4% on pcp.
"Parts and service remained strong".
Logistics
AHG's Logistics division contributed EBITDA of $15.0 million (96.0% pcp) for the December half on revenue of $199.30 million (96% pcp). EBITDA margin was 7.5% (pcp 7.5%).
"The Transport and Cold Storage segment continues to experience strong demand, reporting EBITDA of $8.7 million ($9.2 million pcp) on revenue of $86.2 million ($83.2 million pcp)," said Mr Howson.
"The Other Logistics segment which comprises AHG's automotive parts, warehousing and distribution businesses, motorcycle distribution and vehicle storage and engineering contributed EBITDA of $6.3 million ($6.4 million pcp) on revenue of $113.1 million ($124.5 million pcp).
"While the Logistics division performed solidly with the Transport and Cold Storage segment and parts distribution delivering stable results, it was impacted by competitive pricing and exchange rate pressures in motorcycle distribution."
Outlook
AHG is cautiously optimistic about the economic outlook and general trading conditions for the second half of FY10 and expects current EBITDA margins to be sustainable.
"It is anticipated that national new vehicle sales will continue to trend up this year with an industry forecast of 975,000 new vehicle sales for the calendar year 2010¹ (up 4% from 937,329 pcp).
¹ AutoTeam Australia, January 2010
"The solid performance from our Logistics division is also expected to continue. Expansion plans for Rand Transport are on track with the new Melbourne facility due to be completed in August 2010 and the Brisbane facility in December 2010. The expansion will increase Rand's storage capacity to approximately 65,000 pallets in 2010/11 from approximately 42,000 currently. Also, it is anticipated that AHG's parts distribution business will continue to maintain a strong market position.
"VSE and GTB, while still a greenfield site, continues to mature and it is anticipated they will deliver an improved performance in 2010.
Mr Howson said AHG would continue to consider growth opportunities that added value to the business and shareholders, and remained committed to ongoing improvement and cost control.