Car and truck retailer Adtrans Group Ltd is looking for further gains in earnings as it rides out the downturn in the car sector.
The company yesterday upgraded its 2007 full year profit forecast after the revealing a 19 per cent increase in earnings for the December half.
That was thanks to the recovery in confidence in the industry on the back of the fall in fuel prices. It helped Super Cheap Auto improve in the half but luckless Repco spun its wheels and went nowhere.
Adtrans said net operating profit after tax reached $4.3 million in the six months to December 31, up more than 19 per cent on the $3.6 million earned in the first half of 2006.
The company now sees the full 2007 result being more than 10 per cent higher than the $7.4 million earned in the June 2006 year. That would put net earnings at over $8.1 million.
This forecast is an upgrade on the 7.5 per cent forecast at the AGM last October.
The higher result was struck on a small fall in revenue to $322.35 million for the half. That was down 0.4 per cent on the $323.63 million in the previous corresponding half.
Chairman Graeme Mr Bignell said the first half results were helped by the fall in fuel prices.
The forecast for the second half flows from the improved prospects for the company’s truck business.
“The group expects excellent truck sales throughout all of calendar 2007 due to the Euro4 Emission Standards introduction on 1 January 2008 which will cause significant engine changes and probably increase initial running costs,” Mr Bignell said in a statement accompanying the profit release.
“Overall, the vehicle market is expected to remain strong.”
Adtrans said the second half results will take into account the benefits of a full six months from its new $7 million Medindie showroom in Adelaide.
Interim has been raised to 9c a share from 8.5 cents. Adtrans shares rose 14c to $3.58.
The after-tax profit includes a $270,200 distribution from the HIH Liquidator.
Adtrans said that during the period, it also acquired Australia Wide Transport Spares (a truck parts operation which was consolidated within the existing Whitehorse truck business in Victoria) and also purchased a Kia dealership at Clovelly Park in Adelaide.
