Colonial Motor Company posts $9.1m profit for first half of FY2024
The Colonial Motor Company (CMC) has released its unaudited financial results for the first half of 2024 which ended 31 December 2023.
A trading profit after tax of $9.1 million was recorded for the period, coming in below the comparative period’s strong result.
The Board has declared a fully imputed interim dividend of 15 cents per share. The dividend will be paid on 25 March, with a Record Date of 15 March.
Concerning recent trading conditions, CMC says the prior Government’s clean car legislation had significant distorting impacts on the new vehicle market. It adds that the current Government’s decision to cease the Clean Car Discount program led to inevitable negative market impacts in November and December 2023.
“It logically suppressed immediate-term demand for non-EV vehicles, pushing registration and sales into January 2024. This suppressed demand, a high-interest rate environment and associated inventory holding costs also influenced the half-year results,” CMC states.
The company notes that the new light vehicle industry totalled 140,850 registrations for the 2023 calendar year, down 15 per cent on 2022. The later months of the year were heavily impacted by the issues already mentioned. Conversely, the heavy truck market was up 7 per cent on the prior year.
Colonial says that trading conditions were also impacted by start-up costs incurred to launch its new venture into JAC light trucks. It says that diversification into the light truck market and the establishment of a new brand in New Zealand will take time to mature and it does not expect this investment to make a positive contribution in 2024.
Regarding the development of CMC’s properties, it has announced that the rebuild of Agricentre’s tractor dealership in Gore has been completed. Post the end of the half year, the company also acquired a desirable property in Nelson which provides a ‘foothold’ and opens options for the future in that key market.
“In this somewhat volatile property market environment, we have adopted a more conservative program for dealership development and refurbishment for the remainder of 2024.”
Looking ahead, Colonial says that although trading conditions stabilised in January, it will remain cautious for the remainder of the financial year.
“The same fundamental issues of economic uncertainty, a relatively low New Zealand dollar, cost-of-living factors and stubbornly high-interest rates, along with concerning geo-political tensions, will continue to influence consumer confidence.
“These will impact to an unknown degree on new and used vehicle enquiry in the second half of the financial year. As inventory levels ease from their current peak, but remain elevated in the short term, high interest costs will continue to impact earnings.”
