Record result for Colonial Motors

Net operating revenue was $461,729, up $5.4 per cent compared to the previous corresponding reporting period.

Performance

The record result for the Company was driven by heavy trucks, with both sales volume and trading profit growing in the six month period. Kenworth and DAF had strong sales growth with a full calendar year total of 482 heavy vehicles registered. The total new light vehicle industry for the second half of the last calendar year was up 3.9 per cent on the same period a year before, a materially lower rate of growth than the 13.5 per cent growth of a year earlier. This slowing rate of growth impacted on the profitability of our car dealerships. The car dealerships trading profit was lower than the record result a year earlier but above that achieved in both 2015 and 2014. Segment shifts within the market continue with the established pattern away from sedans and hatches into SUVs and light commercials. This trend affects Ford and Mazda differently. Mazda is strong in the important SUV segment, while Ford is successful in the light commercial sector.

Developments

South Auckland Motors’ new facility at Takanini (leased) successfully opened on time in December. Late in 2017, Southern Autos-Manukau was appointed the Suzuki car franchisee to replace Moyes in Panmure, and on 3 January 2018 began selling Suzuki vehicles from its site at Manukau in addition to Isuzu utes, Peugeot and Citroen. Work has commenced on a CMC-owned workshop facility in Wellington City for Capital City Motors.

Outlook

The total new vehicle market continues to grow and there are strong forward orders for heavy trucks. However the pace of growth has slowed from a year ago and business confidence is more cautious. Dividend The Directors have declared a fully imputed interim dividend of 15.0 cents per share, totalling $4.904m up 2.0 cents from the same period last year. The dividend will be paid on Monday 16 April, with a record date of 6 April 2018.