Colonial beats expectations
The Colonial Motor Company has announced its trading profit after tax of $17.83 million for the year ended June 30, 2025, was better than expected.
The total was 0.3 per cent lower than the $17.88m achieved in the prior year.
Another key figure in the company’s unaudited preliminary results for the year includes total revenue of $1 billion, down slightly from $1.01b in the 2024 financial year.
Ash Waugh, chairman, says the vehicle market has been patchy at best during the past year, with new passenger cars, light commercials and trucks particularly affected by a sluggish economy and high inventory levels.
He notes in an announcement to the NZX on August 21 that this resulted in pressured trading, especially in the North Island metro markets.
“On the other hand, used car operations across the group had demonstrated strong growth and contributed positively to the overall result,” he continues.
Waugh, pictured, says most of the group’s dealerships responded well to the “new normal” trading market by addressing their cost structures and finding new business in a challenging environment.
New-vehicle sales for the first six months of 2025 were similar to the prior year after increasing 1.3 per cent to 63,458 units.
However, the commercial market was down 18.4 per cent in preference to mid-sized and large SUV vehicles.
“The Ford Ranger had protected its share in this reduced market but the decline in that segment is of some concern, as this has been a ‘sweet spot’ for a number of years now,” adds Waugh.
“The good news is the recent introduction of the hybrid Ranger into this segment, along with the Ranger Super Duty, will further enhance our Ford dealers’ light commercial range in the future.”
The heavy truck business at Southpac had a difficult year as trucking volumes fell off in all but the dairy and wider agribusiness sector. This led to inventory being held for longer periods across the entire industry and resulted in an aggressive trading environment.
Growing business
Waugh also outlined a number of changes for the group over the past year in relation to its brands and dealerships.
Colonial’s JAC Motors initiative continued its launch “into a very competitive market” but the company is confident its ongoing commitment to the brand is an important strategic investment in a Chinese-sourced product range.
“We were delighted to secure the Mitsubishi franchise in Manukau, South Auckland in May and establish that dealership on our Bakerfield Place site trading as Manukau Autos,” he adds.
“As part of that change, the Southern Autos business had relocated its central hub of operations to the Botany Road facility.
On the property front, a rebuild of Fagan Motors in Masterton has been completed and the new Avon City Ford sales and service facility in Rangiora, purchased earlier in the year, is now operational.
Colonial also recently purchased further land in Queenstown next to its Glenda Drive dealership to protect its options in the fast-growing region.
Outlook
Waugh points out all sectors of New Zealand, except agribusiness, are awaiting the rebound from official cash rate and interest rate reductions and the positive impacts expected from the many policy changes the Government has made and continues to introduce.
“However, it appears the economic headwinds along with global geopolitical instability will continue to hamper growth,” he says.
“We certainly see a two-speed economy in New Zealand. On the downside we have metro North Island while on the upside are the South Island and rural New Zealand.
“Until our metro areas in the North Island and the truck business enjoy the same trading environment, we maintain a cautious watching brief.”
The directors declared a fully imputed dividend of 20 cents per share (cps) to be paid on October 6. This will take the total dividend for the year to 35cps, 64 per cent of the trading profit after tax and matching the previous year.
