RESULTS FOR ANNOUNCEMENT TO THE MARKET
Reporting period Six months to 31 December 2010
Previous reporting period Six months to 31 December 2009
Results for the period: Amount ($’000) Percent change
Revenue from ordinary activities 232,184 +8.4%
Trading profit from ordinary activities after tax attributable to shareholders 3,589 +38.4%
Net profit attributable to shareholders 3,589 +38.4%
Final divided
7.00 cents per share
Imputed 3.00 cents per share
Supplementary dividend (where applicable)1.24 cents
Record date 25 March 2011
Payment date 4 April 2011
COMMENTARY
Group revenue was $232.2 million, up 8.4% compared to the $214.3 million in the previous comparable period. The profit after tax attributable to shareholders showed a greater improvement, rising by 38.4% to $3.6 million for the period, compared with $2.6 million in the six months to 31 December 2009.
As a general comment the consumer side of the market has continued to be constrained to a greater extent than anticipated while previously deferred fleet replacements have bolstered new vehicle numbers. Nationally, new vehicle sales for the 2010 year were 15% higher than in 2009. The increased Group revenue reflects this but was offset by a reduction in used vehicle sales, parts and service revenues. On the positive side, primary produce export activities are supporting stronger heavy truck and tractor sales.
For most of our Dealerships it has been a challenging period as the lower level of retail business has required finding further cost reductions and efficiencies. The early months of 2011 have shown no improvement in retail sentiment although it is expected to improve through the remainder of the year.
The earthquakes in Christchurch have complicated upgrading plans we have for Team Hutchinson Ford’s Tuam Street property. The September earthquake inflicted a small amount of damage but, due to our central city location, meant we were unable to open for three days. Strengthening work undertaken in the 1970s did its job. The Boxing Day earthquake caused more structural damage but did not disrupt business. We have been working with architects and engineers to find the best solution for the building, however the impact of last Tuesday’s earthquake on the building has yet to be fully understood and assessed.
Advance Agricentre, the Case IH tractor dealership we opened in 2009, has expanded its business by acquiring the Otago Case IH dealership and now operates from Invercargill, Gore and Milton.
The format of the financial statements is consistent with last year. The accounting rule that required us to make the $6.4m deferred tax charge to profit in the last financial year has since been modified to exclude “investment property”. This has no effect for us because all our properties are occupied by our dealerships and are consequently recorded as property, plant and equipment.
At the December board meeting John Wylie advised he wished to step down as Chairman at 31 January 2011. The Board elected J P (Jim) Gibbons as Chairman from that date. John continues on the board as an independent director.
The Directors have declared a fully-imputed interim dividend of 7.0 cents per share totalling $2.3m million to be paid on Monday, 4 April. This compares to a 6.0 cents per share ($2.0 million) interim dividend last year.
A copy of the full interim report is attached.
