Car seller and logistics firm Automotive Holdings Group (AHG) believes it can deliver a solid full-year result, despite the slump in car sales in the past six months.
AHG is the country’s largest automotive retailer and told the ASX in an update yesterday that it had maintained a "stable" performance in the current financial year.
The company however said it remained cautious about the economic outlook and general trading conditions.But expects similar earnings for the final quarter to those in the second and third quarters of the 2009 financial year.
The company said the federal government’s stimulation package and proposed 30% investment tax allowance may help boost sales and earnings.
AHG’s managing director Bronte Howson said in the statement that the group had been able to endure difficult market conditions during the 2009 financial year.
"Whilst the challenging conditions are expected to continue, we believe AHG will deliver a creditable full-year result," Mr Howson said.
"We have demonstrated the group’s ability to maintain a strong level of earnings during difficult market conditions and feel confident about AHG’s ability to improve revenue and earnings growth as markets recover."
AHG said that for the nine months to March 31, 2009 it had achieved a net profit after tax (NPAT) of $29.3 million from continuing operations (unaudited, pre adjustments reported in December 2008).
The profit 85% of that earned in the previous corresponding period and excluded a GST holdback refund of $4.75 million (pre-tax).
NPAT for the quarter was $11.1 million.
Group earnings before interest and tax, depreciation and amortisation from continuing operations for the nine months were $75.3 million (unaudited), 91% of the previous corresponding period.
That was after the interim result saw the company report an underlying net operating profit after tax from continuing operations of $18.2 million for the period December half on Group revenue of $1.6 billion.
The company said its automotive division outperformed the broader industry in the 6 month period to December 31, 2008, with AHG’s new car unit sales volumes declining just 6% compared to a 12% decline in the overall market.
Mr Howson said the group’s first-half result was cushioned by the strong performance of the logistics division, particularly from Rand Transport which experienced increased demand for cold storage and refrigerated-transport services.
"Whilst the logistics division continues to perform strongly, the automotive division has improved from the weaker conditions experienced in the first half," Mr Howson said.
"This is largely the result of lower interest costs and strict controls in areas such as inventories and operating costs."
Mr Howson said AHG sales of new cars had fallen 9.8% in the nine-month period, compared to a 13.5% for the market as a whole. At the halfway mark sales were off 6% in a market down 12%.
AHG said yesterday the group’s parts and servicing revenues are up on the previous corresponding period, while finance revenue was maintained.
AHG shares rose 4.5c to $1.245 yesterday, up 3.75%.
