Automotive Holdings Group (AHG) has recorded an 11% drop in half-yearly operating net profit after tax as the Western Australian market continues its slump.
That equates to A$43.9 million (NZ$46.89 million) for the six months to December 2016.
However, in contrast the east coast of Australia and New Zealand have been the stand outs for car sales.
AHG managing director John McConnell says the automotive division has seen strong broad‐based growth across its diversified portfolio of brands and locations, which allowed it to mitigate the downturn in the WA economy.
AHG reports strong automotive revenue and earnings growth in NSW and New Zealand, and above‐budget results in Queensland and Victoria.
Auto earnings improved 10.4% to A$78.5 million (NZ $83 million) before tax and interest on an 11.8% rise in sales to A$2.53 billion (NZ$2.7 billion).
In regards to its refrigerated logistics arm, McConnell says the company remains focused on growth and cost control after a 7.2% fall in revenue to A$82.95 million (NZ$88 million).
It will continue to monitor underperforming businesses with a view to turnaround or divest as required.
Outlook
AHG expects the automotive division to continue to deliver a strong performance, with further expansion of the easyauto123 warehouse model.
“The current ASIC and ACCC reviews of finance and insurance commissions, once finalised, will most likely lead to industry‐wide changes to the revenue mix and cost base at dealership groups and the relative shares of vehicle sales margins, finance and insurance sales, aftermarket and vehicle servicing,” McConnell adds.
“We expect these changes to commence across the industry after the current financial year with an extended transition period.”
As announced in November 2016, the company continues to expect to deliver a full year operating net profit after tax outcome ahead of FY2016.
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