The Chair of the Colonial Motor Company, Ash Waugh, today announced a Trading Profit after tax for the 30 June 2024 financial year of $17.88m.
Over the past couple of years the company reported deteriorating market conditions. It has been an increasingly challenging trading environment, and the deterioration is evident in this year’s result, said Waugh. The first half produced “a respectable result in a weakening market”, albeit with high inventory carrying costs.
The second half bore the full brunt of the recession with softer light vehicle demand, continuing high interest rates and an oversupplied market across the industry. New and used vehicle margins have been squeezed, reducing dealer profitability. Moreover, New Zealand new vehicle sales in H1 were down by 26 per cent.
The dealer response has been to review cost structures while remaining focused on delivering positive bottom-line results.
Waugh said the Company’s heavy truck business continued to perform well as customers replaced their existing vehicles with new units. Tractor operations have been heavily impacted by the negative sentiment in the agricultural sector, with fewer upgrading to new machinery.
During this new financial year, the state of the New Zealand economy will dominate the direction of retail markets. Demand for light vehicles is likely to remain subdued while interest rates remain relatively high. Oversupply will continue to be a challenge the industry has to manage, along with increased competition in a declining market.
Waugh added that one positive development is the Government’s decision to align New Zealand and Australian emissions standards.
The Directors declared a fully imputed dividend of 20cps be paid on Monday, 7 October 2024. This would take the total dividend for the year to 35cps, 64 per cent of the Trading Profit after Tax.
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