Colonial’s profits tumble

The Colonial Motor Company has reported a trading profit after tax of $6.9 million for the six months ending December 31, which was down by 23.8 per cent on the comparative period. 

The board has declared an unchanged and fully imputed interim dividend of 15 cents per share to be paid on March 31.

Chairman Ash Waugh says this is a better result than anticipated at the time of the company’s annual general meeting in November “when the market and outlook appeared bleak”. 

The second half of 2024 largely lived up to that expectation, but a strong December result – assisted by “continued prudent cost management” – has seen the six months end on a more positive note. 

“The market remained subdued relative to trading conditions enjoyed over the past few years, with recessionary impacts affecting demand for new light vehicles and now heavy trucks,” says Waugh, pictured.

He points out that in terms of light vehicles, continued excess stock in the market has been maintaining the challenging trading environment. 

“The refreshed focus management has placed on used vehicles in dealerships, together with ongoing cost management, have been contributors to the better-than-expected result. 

“At the same time, the positive tone in the agricultural sector, driven by an increased dairy payout and aggressive marketing by major brands, has seen some ‘life’ return to the tractor market.”

Waugh notes Colonial will continue to support its property investment and refurbishment programme, including a new showroom at Fagan Motors in Masterton that’s all but complete. 

Development activity has been slowed in response to a costlier market. This year will see progress in the development project in Palmerston North for Southpac Trucks. And the company has purchased a site in Rangiora to strengthen Ford’s representation in that growth corridor.

As for the outlook for the remainder of 2024/25, Waugh says January’s market across the country heralded no significant news for a change in market sentiment with new-car volumes 14 per cent lower than January 2024. 

He adds: “Given the concentration on cost reduction, efficiency, a revitalised used-vehicle focus and the strength of the core franchise offerings, the company is well-placed to compete in this changed and challenging market environment.”

This year’s AGM has been scheduled to start at the Harbourside Function Venue, Wellington, at noon on November 7.