Colonial records ‘strong result’
The Colonial Motor Company is hailing a “strong result in a tightening market” after its trading profit after tax for the year to June 30 came in at $30.34 million, a drop of nine per cent from the 2022 financial year.
Ash Waugh, chairman, says light vehicle trading conditions were inconsistent through the second half of the 2023 financial year, due to changes in the government’s clean car scheme and taxes on higher emitting vehicles driving short-term, artificial demand.
“Coupled with this came the challenge of lumpy supply for key products,” he adds. “Despite these challenges, our light vehicle dealerships generally posted strong full year results.”
Waugh, pictured, notes in a report to shareholders released on August 22 that Colonial’s tractor dealerships had a challenging last quarter as the agricultural sector struggled with high inflation and cooling primary produce returns, but still posted a respectable full year result.
Meanwhile, results for its heavy truck dealerships remained steady and strong demand persisted throughout the year.
On the property front, Colonial is focusing on refurbishment projects already under way in preference to commencing any major new redevelopments as building costs continue to escalate.
Work has been completed at the Timaru Motors, Avon City Ford and Dunedin City Motors dealerships, while redevelopment of the Fagan Motors sales and administration building in Masterton is due to take place in the coming year.
A major development in Palmerston North to support Colonial’s heavy vehicle operations in the Lower North Island has continued through the planning stages but construction remains some time away yet.
Looking ahead
Waugh says higher fuel prices, inflation, government interventions and a continued cooling economy look set to take a heavier toll on the company’s customers and the business into 2024 and potentially beyond.
“Balancing this outlook somewhat will be a continued refresh of products from both Ford and Mazda,” he continues.
“Whilst overall the demand for new vehicles is forecast to decline, these new models, together with the improving availability of other hybrid and electrified vehicles, will support customer enquiry coming into our dealerships in a weakening market.”
He confirms management is continuing to explore new opportunities to expand the group’s core competencies “in order to provide resilience to the overall operations”.
Colonial’s directors have declared a fully imputed dividend of 42 cents per share (cps) to be paid on October 2, which will take the total dividend for the year to 57 cps, or 61 per cent of the after-tax trading profit.
