The logistics division of Automotive Holdings Group has buffered the company from further losses as its core retail division suffers a 24 per cent fall in earnings over the past four months.
The logistics division of Automotive Holdings Group has buffered the company from further losses as its core retail division suffers a 24 per cent fall in earnings over the past four months.
In a trading update notice, AHG said earnings before interest, tax, depreciation and amortisation for its retailing division over the four months to the end of October was $21.5 million, or 76 per cent of the previous corresponding period.
The dealer's logistics division recorded an EBITDA of $9.5 million, a 66 per cent jump compared to the same period last year.
Overall group EBITDA totalled $31 million, or 91 per cent of the previous corresponding period, AHG said.
Unaudited group net profit after tax from continuing operations reached $10 million, a 29 per cent fall on the same period last year.
"The negative impact to profit has principally come from higher interest charges, start up costs from the establishment of greenfield sites and the re-alignment of used vehicle pricing in the first quarter," managing director Bronte Howson said in a statement.
"We remain very cautious about the impact of global economic and markets factors on the Australian economy.
"However, with the introduction of the federal government's stimulus packages, lower interest rates and fuel prices we anticipate an improved trading performance."
Meantime, AHG said it is conducting a review of its operations including New Zealand where a number of site in the Auckland area have been closed.
"The intent is to streamline the management functions and enhance operational efficiencies."
AHG is currently holding its annual general meeting in Perth.
Shares in AHG were up three cents to 46c at 12:15 AEDT.
The announcement is pasted below:
Automotive Holdings Group Limited (ASX: AHE) which holds its Annual General Meeting today provides the following update on its trading performance to 31 October 2008 and an outlook for the remainder of 2008.
Group trading during the month of October showed improvement on the first 3 months of the year on the back of better automotive retailing and further growth in logistics activity.
AHG Managing Director Bronte Howson said the decline in profitability in the September quarter stabilised in October and a number of indicators point to an improved trading performance in the months ahead.
Group EBITDA for the 4 months to 31 October amounted to $31.0 million, 91% of the previous corresponding period ("pcp").
EBITDA for the Automotive Retailing Division totalled $21.5 million (76% of pcp) while EBITDA for the Logistics Division was $9.5 million (166% of pcp).
Unaudited Group NPAT from continuing operations for the 4 months to 31 October amounted to $10.0 million, which was 71% of the pcp, a marginal improvement on the first quarter result which was 70% of pcp.
This result excludes the benefit of GST refund claims received in the current financial year of $4.75m before tax, following the Federal Court decision of KAP Motors Pty Ltd v Commissioner of Taxation [2008] FCA, 159.
Mr Howson said he was very pleased with the performance of the Group's Logistics Division, particularly Rand Transport's recently established cold store and distribution facility at Homebush in NSW.
He said the Automotive Retailing Division was performing well considering the difficult market conditions.
New and used vehicle unit sales for the 4 months to 31 October 2008 were marginally down on 2007 levels.
"The negative impact to profit has principally come from higher interest charges, start up costs from the establishment of greenfield sites and the re-alignment of used vehicle pricing in the first quarter," said Mr Howson.
"We remain very cautious about the impact of global economic and markets factors on the Australian economy."
"However, with the introduction of the Federal Government's stimulus packages, lower interest rates and fuel prices we anticipate an improved trading performance."
In other developments:
- AHG is conducting a review of the Group's operations including New Zealand where a number of satellite sites in the Auckland area have been closed. The intent is to streamline the management functions and enhance operational efficiencies.
- Genuine Truck Bodies, a division of AHG's Vehicle Storage & Engineering (VSE) business at Dandenong in Victoria, commenced trading this month. The new bodybuilding operation will leverage off the VSE business and the AHG-owned truck retailing outlet.
