Colonial Motors Posts Tidy Full Year Result

The Chair of The Colonial Motor Company, Ash Waugh, today announced a trading profit after tax for the financial year of $17.83m. That’s evidently a better than expected result.

He noted the vehicle markets in New Zealand had been tough throughout the year. New passenger cars, light commercial vehicles and trucks were all affected by a sluggish economy and high inventory levels. This had resulted in pressured trading, especially in the North Island Metro markets. 

However, used car operations across the Group had demonstrated strong growth and contributed positively to the overall result.

Mr Waugh pointed out that most of the Group’s dealerships responded well to the ‘new normal’ trading market. They addressed their cost structures and found new business in the challenging environment. 

The June calendar year-to-date total new vehicle market had been similar to the prior year in volume. It was up just 1.3 per cent at 63,458 units.

But the commercial market was well down by over 18 per cent. While the Ford Ranger had protected its share in this contracting market the decline was of some concern. Waugh said this has been a ‘sweet spot’ for a number of years. 

The good news is the recent introduction of the hybrid Ranger into this segment. And similarly the incoming Ranger Super Duty, which will further enhance Ford dealers’ light commercial range in the future.

He confirmed the Company’s JAC Motors initiative continued its launch into a very competitive market. We remain confident the ongoing commitment to the JAC brand is an important strategic investment in a Chinese-sourced product range.

Waugh said that Colonial Motors directors were pleased to secure the Mitsubishi franchise in Manukau in May and establish that dealership on the Bakerfield Place site. As part of the change, the Southern Autos business had relocated its central hub of operations to the Botany Road facility.

He pointed out that most sectors of New Zealand were eagerly awaiting the rebound from OCR interest rate reductions. However, he added that the economic headwinds along with global geopolitical instability will continue to hamper growth. “We maintain a cautious watching brief” said Waugh.

The Directors had declared a fully imputed dividend of 20cps. This would take the total dividend for the year to 35 cps, 64 per cent of the trading profit after tax. It matches the dividend payout of the previous year.