Result for the six months to 31 December 2018

20/2/2019, 4:06 pm INTERIM

The Directors are pleased to announce the unaudited results for the six months to 31 December 2018. The half year trading profit after tax at $10.8m is down 9% on the six months to December 2017 record result of $11.9m, but ahead of the trading profit of $10.3 achieved in 2016.

The new light vehicle industry, in the six months to December 2018, grew by a modest 1% over the previous corresponding period, compared to 4% and 13.5% in the prior years. Coming off a growth curve with its unfulfilled expectations is always challenging. The established trends within the market continue, with traditional sedans and hatchbacks now the smallest segment at 26% of the total. SUVs continue to grow and are now 44%, while light commercials are steady at 30%. Ford continues to be market leader in light commercials with New Zealand’s number one selling vehicle, the Ranger, and is now adding the Transit Van range. Mazda’s strength is its desirable range of SUVs, CX9, CX8, CX5, and CX3. The extra heavy truck market grew and, within that, Southpac Trucks increased its market share with its two brands, Kenworth and DAF.

However, higher costs and lower margins resulted in lower trading profitability compared to the more favourable circumstances experienced in the comparable period a year ago.

Developments 
In Queenstown, Macaulay Motors Ford and Mazda has moved to the new larger company-owned facility at Grant Road in Frankton. A new subsidiary company, Southern Lakes Motors, is being established to represent Mitsubishi and Nissan at the previous site on Glenda Drive.

Capital City Motors, Wellington, has opened two new showroom hubs by the waterfront to bring the Ford and Mazda brands to the CBD. Ford Link and Mazda Connect introduce touch screen technology in a more relaxed environment. In addition a new company-owned retail service centre for both brands has been opened at 258 Taranaki Street.

A property has been purchased in Botany to expand the representation for Southern Autos - Manukau’s stable of brands in the South and East of Auckland.

Outlook 
The new light vehicle market and the extra heavy truck market have both levelled off at a historically high level. The effect is high volumes but tighter margins. The Company’s profitability is down on the record 2018 result, but ahead of 2017. The immediate outlook is for revenue to remain high but lower margins and higher costs will constrain trading profitability.

Dividend 
The Directors have declared a fully imputed dividend of 15 cents per share, totalling $4.9m, unchanged from last year. 
The dividend will be paid on 15 April 2019, with a record date of 5 April.

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