Colonial’s profits to drop

The Colonial Motor Company is expecting a 20 per cent drop in its trading profit before tax for the first half of its current financial year compared to the same period of 2023/24.

Chairman Ash Waugh, pictured, advised shareholders at November’s annual meeting that trading in the six months to the end of December remained “tough”. 

In a market update issued on January 31, he says: “This trading environment occurred in a flat market and economy where the new-vehicle market was oversupplied, so over-competitive, which meant some of the competition was ‘moving the metal’ just to keep cash flowing. 

“These supply and competition factors were consistent over the whole of 2024. They have had an inevitable impact on the half-year result to December 31. 

“Ahead of finalising that result, the suggested decrease in trading profit before tax against the 2023 comparative half-year is expected to be in the vicinity of 20 per cent.

“This is not as significant a decline as was expected back in November. While December was a strong trading month, it is too early to comment on whether that was an aberration or a sign of some level of market recovery. 

“Dealerships continued their cost-management focus to embrace the ‘new normal’ in terms of market volume.”

In February 2024, Colonial announced trading profit after tax for the first half of the 2023/24 financial year of $9.1m. That was down by 35.9 per cent on the comparative period’s “very strong result”.