AP Eagers lifts half-yearly profit

Prominent car and truck dealer AP Eagers’ half-yearly after tax profit has risen 8.8% to $53.7 million.

That’s compared with $49.3 million last year, while overall revenue was 2.09 billion – up 3%.

The group delivered record trading performances in Victoria, Tasmania and its National Trucks division, according to chief executive Martin Ward in its half-yearly report to the ASX.

“Our largest geographic segment of Queensland recorded improved performance, while challenging market dynamics in our New South Wales and South Australia geographic markets adversely impacted trading performance.

“Increased profit contribution from car and truck retailing operations and increased dividend income from our strategic investment in Automotive Holdings Group Ltd (AHG) helped offset reduced gains on sale of non-core operations and property.”

Ward says its greatest upcoming opportunity is the introduction of the revised vehicle financing models being implemented by all financiers by November 1.

“Currently, the Australian industry dealership finance penetration is consistently below 40%. This compares with dealership penetration in the USA and UK of 84% and 89%, respectively.

“The new financing models have been developed to provide highly transparent and ultra-competitive pricing with interest rates tailored to individual customer profiles.

“These new models are expected to significantly lift finance penetration within Australia with a shift towards these higher overseas rates over the coming years.”

AP Eagers new car brands include Toyota, Ford, Mazda, Holden, Honda, Hyundai, Jaguar, Jeep, Kia, Lexus, Nissan, Mitsubishi, Subaru, Suzuki, Audi, BMW, Citroen, Mercedes, Renault, Porsche, Volkswagen, Volvo, Chrysler and Dodge.

And its new truck brands include Fuso, Hino, Iveco, MAN, Mercedes Benz and Western Star.