Colonial profit climbs to $18.7m

The Colonial Motor Company has announced a trading profit after tax of $18.7 million for the year to the end of June 30, noting it was marginally ahead of the previous financial year but affected by the Middle East conflict during much of the second half.

The total was up by 4.7 per cent from $17.8m, while revenue from ordinary activities climbed 6.8 per cent from $1 billion to $1.07b.

Ash Waugh, chairman, says the company indicated in its half-year report on February 26 that positive growth in some vehicle segments and strong used-vehicle trading had delivered a solid result for the firm.

“The aim was to hold onto and ideally build on those gains in the second half,” he adds. “That was not to be the reality, as the geopolitical environment abruptly shifted two days later with the beginning of the Middle East conflict. 

“The resulting oil shock and supply disruption significantly impacted the sales mix in the light-vehicle market and this shift continues.”

Waugh, pictured, explains demand for diesel vehicles slowed and the desire for new energy vehicles (NEVs) dominated the market for a time, as customers quickly reacted to ballooning fuel prices and oil supply uncertainty. 

“Understandably, the timing of this shock was unfavourable for the group’s businesses, falling as it did in a window where vehicle supply, model changes and the inventory mix were not positioned to take advantage of the demand shifts,” he says. 

Shareholders have been told management across the group acted quickly and decisively to the situation, revaluing inventory to meet the market and by doing so, limiting potential impacts and maintaining sales momentum. 

While margins were affected, Waugh notes finishing with an improved profit after tax position relative to last year was a satisfying and respectable outcome in what was a disrupted trading environment. 

The preliminary result for the 2026 financial year was announced to the NZX on August 14. Waugh says it shows the company’s balance sheet was also strong, particularly relative to the two previous years, because of significantly lower inventory levels and reduced external borrowings. 

The directors have declared a fully imputed dividend of 25c per share to be paid on October 5 and with a record date of September 25. This would take the total dividend for the year to 40c per share, representing 70 per cent of the trading profit after tax and higher than the 35c per share in the previous year.

Market developments

He continues in his message to shareholders to say that exciting new models are due to here soon, with a focus on NEVs. 

“The arrival of Mazda’s all-new electric 6e model was imminent and it would be quickly followed by the CX-6e,” he explains. 

“The current Ford model range remained resilient and was maintaining its market share. The Ford Motor Company would, as it had in the past, continue to adapt its portfolio to meet evolving market trends, as demonstrated with the launch of the Ranger Hybrid. 

“New Zealand Automotive Limited had successfully previewed the new JAC T9 plug-in hybrid ute at Fieldays and Mitsubishi had also announced exciting new vehicles due this year.” 

Meanwhile, Southpac was focused on bringing the more fuel-efficient Next Generation DAF to market, with the first customer trucks already on the road. 

The strength of the agri-sector in general was also driving “welcome” growth in Colonial’s tractor and implements business. 

Waugh says the focus on growth in used vehicles would continue across the group and dealerships had proven over the past two years that without market disruption this business had more potential. 

“The company was pleased to have secured an expanded representation of the BYD brand into the Canterbury and Wairarapa regions, joining the Energy Motors subsidiary that had operated a BYD dealership in New Plymouth. 

“From a strategic perspective, access to a range of competitively priced NEV product was a priority.” 

On the property front, Colonial expects the added BYD dealership opportunities to require a significant investment in property and facilities in Christchurch and the other regions where the company would now have representation. 

Plans have also been finalised for a more significant Ford facility on Harris Road, Botany, and at the Rangiora branch, with construction about to begin. 

Outlook

Waugh notes the Middle East conflict acted as a catalyst in lifting the level of adoption of NEVs this year, particularly in the passenger segment. 

“The fact was, business and consumers always seek to adapt, so life goes on,” he says. 

“Local and geopolitical disruption seemed to be the ‘new normal’ for a time to come and the company had to respond by continuing to adapt. 

“The New Zealand economy appeared to be slowly improving, with our agri-based country showing a degree of resilience. The team across the group has a busy year ahead.”