Colonial makes record profit
The Colonial Motor Company has reported trading profit after tax for the first half of the 2021/22 financial year as hitting a record high of $18 million.
That was up by 41.5 per cent on the equivalent period in 2020/21, while total revenue climbed by 22.4 per cent to $535.7m. The board has declared a fully imputed interim dividend of 15 cents per share, which is unchanged, to be paid on March 28.
“It’s seldom that all of our major trading operations within the group deliver outstanding results in one six-month period, but this has been the case over the first half of the financial year,” says chairman Ash Waugh.
“Motor vehicles, heavy trucks and tractors have all delivered excellent results in a very challenging environment, particularly in terms of stock availability and especially for used cars where supply remains an issue.
“Disruptions to the supply chain of new-vehicle arrivals have been the biggest operational challenge. From a dealership perspective, managing customer expectations is more complex than ever before.
“Demand has generally outstripped supply across the board and, while vehicle flows through our dealerships have been strong, we did experience some negative impacts from the Covid lockdowns.
“Despite these challenges, our dealership staff are working at capacity in an ever-changing and uncertain environment. These efforts are recognised and appreciated at every level.”
Waugh notes the total new-vehicle industry for the year recovered to an all-time record of 165,287 registrations.
“In the case of utility vehicles, the government’s new emissions-based taxes – due to be introduced soon after the end of March – contributed to exceptional demand as buyers endeavour to secure vehicles before prices rise,” he adds.
“Our major franchises scrambled well to meet that demand. But as we trade into 2022, stock availability is patchy. With some brands and models, it has the potential to adversely affect our trading over the second six months of the financial year.”
As for Colonial’s property developments, the Team Hutchinson Ford facility in central Christchurch, and the Capital City Motors Ford and Mazda facilities in Lower Hutt are finally complete “and we are delighted with the outcome of these investments”.
Waugh says: “A new leased service facility on Mustang Drive in Bell Block, New Plymouth, will improve Energy City Motors’ service offering in Taranaki. Southpac Trucks also has a TRP parts store in the same location.
“We have significant upgrade developments under way at Avon City Ford in Christchurch and Dunedin City Motors is going through a brand refresh. Two years after a major fire in our Nelson Ford dealership, MS Ford, a rebuild of the leased facility is nearing completion.”
Looking ahead
Waugh says the reality of the omicron outbreak of Covid-19 is that it has the potential to be disruptive across all of Colonial’s businesses, so the company has developed specific response plans for all operations, including the group office in Wellington.
He adds: “At a macro level, consumer demand continues to be robust. However, the potential headwinds that could impact results in the second half include direct and indirect disruptions to trading, labour and vehicle supply due to omicron, and price increases from tax changes and inflation.
“CEO Alex Gibbons and the management team are performing well, and our dealerships are guided by experienced and capable leaders. We are well-prepared as we enter a somewhat uncertain 2022.”
Colonial’s annual meeting will now be held on November 11. It has been delayed by one week due to difficulty in securing a venue.
