Automotive Holdings Group Ltd has announced a record interim net profit for the half year to December 2007 of $23.7 million from continuing operations, an increase of 110 per cent on the previous corresponding period.
Automotive Holdings Group Ltd has announced a record interim net profit for the half year to December 2007 of $23.7 million from continuing operations, an increase of 110 per cent on the previous corresponding period.
Group revenue for the period rose from $856.1 million to $1.7 billion for the half year, a rise of 98.9 per cent.
West Perth-based AHG said the December half delivered stronger than expected results assisted by the integration of the major acquisitions of the McGrath Lander and Zupps retailing groups acquired in FY07.
EBITDA for the period rose 108.1 per cent and EBITDA margin was higher at 3.28 per cent from 3.13 per cent previously.
Earnings per share was 12.4 cents (8.0 cents previously) and the directors have declared a fully franked dividend of 7.25 cents, up from 5 cents in the previous year.
AHG managing director Bronte Howson said the strong result has consolidated AHG's position as Australia's largest automotive retailing group.
The automotive retailing division contributed EBITDA of $45.1 million (up 120 per cent) on revenue of $1.52 billion (up 107 per cent).
"We are very pleased with the interim result, which has been driven by a strong performance across our business segments," said Mr Howson.
Mr Howson said AHG had continued to perform strongly despite consumer pressures such as higher interest rates and higher fuel prices.
"We have to date seen little impact on consumer sentiment in our automotive retailing operations," he said.
"Factors such as virtually full employment had a powerful effect on consumer spending and greatly reduced the impact of higher interest rates and high fuel prices.
"Notwithstanding these factors, based on trading for the first two months of the calendar year, indications are that the second half of FY08 will be equally strong.
"There remains strong demand in our automotive markets, substantially driven by the record high levels of employment nationwide, especially in the powerhouse markets of Queensland and Western Australia," he said.
Conditions in AHG's automotive retailing division in particular were buoyant, with new car sales reaching record highs during the period, driven by strong economic conditions and increased consumer spending.
In June 2007, the group announced the development of 4 new dealerships in Western Australia and Queensland.
These 4 dealerships, Volkswagen and Kia in Western Australia and Subaru and Hyundai in Queensland will provide further growth in FY2009.
AHG's Hino truck operations, WA Hino in Western Australia and Prestige Hino in Victoria also had a strong year in terms of sales growth with these operations now ranking No. 1 and No. 2 respectively in Australia in terms of Hino sales volume.
The Vehicle Storage & Engineering business has quickly established a strong platform from which to achieve growth into the future.
AHG's logistics division also traded well, contributing EBITDA of $10.7 million (up 70.5 per cent) on revenue of $184.1 million (up 50.4 per cent).
Rand Transport continued to grow its refrigerated transport and storage business, with expansion of its market position along the eastern seaboard arising out of its new facility in Homebush.
AMCAP automotive parts warehousing and distribution business has experienced significant growth in the period as a result of changes in competitor activity.and the expansion will see immediate dividends in the second half of FY2008, with some significant increases in product line volumes.
In July, AHG signed an agreement to become the exclusive Australian distributor of Vmoto branded scooters and related merchandise, a niche consumer segment.
Distribution of KTM Sportmotorcycles in Australia and New Zealand was buoyant through the period, despite some adverse pressures from international currency fluctuations which gave Japanese competitors substantial pricing advantages.
Mr Howson said the strong group result was particularly pleasing given the work carried out during the period to integrate the acquisitions from FY07, McGrath Lander Group in New South Wales and Zupps Group in Queensland.
"With the integration of McGrath and Zupps now complete, our organic growth strategy going forward is re-focused on building additional retailing capacity around our existing core operations and capturing scale benefits from the expanded group.
"We will continue to assess a range of opportunities that fit within our strict acquisition parameters and that have the potential to add value to our established branch network.
"With positive market conditions and good trading performance from all divisions, the indicators are pointing towards another strong year in both automotive retailing and logistics.
"We look forward to completing a record FY2008."
AHG shares closed flat at a price of $3.23 each.