Used sales boost profit
The Colonial Motor Company recorded a trading profit after tax of $10.4 million for the six months up to December 31, 2025.
The result was significantly ahead of the previous comparative period – up by 50 per cent – and the board has declared an unchanged, fully imputed, interim dividend of 15 cents per share to be paid on March 30.
Chairman Ash Waugh, pictured, confirmed the financials were “appreciably better” than what was anticipated at Colonial’s annual general meeting in November. He notes that, as is often the case, December can be a fickle month to predict with last year’s being no exception.
Strong new and used-car sales elevated December trading to positively impact on the half-year. Alongside the economy in general, the new light-vehicle market continued its gradual recovery with the company’s six-month result being evidence of that.
“Despite this trend, somewhat erratic vehicle supply and demand was an ongoing hurdle, something that could be further compounded by several model changes expected during 2026,” adds Waugh.
“Management across the group has continued the refreshed focus on used vehicles in dealerships and this had been a significant factor in the better-than-expected half-year result.”
The heavy-commercial truck sectors that Southpac Trucks operates in remained subdued with national volumes well down on the prior year. It’s not anticipated a recovery in this market will build any marked momentum in the short term.
The company remains confident these market sectors will eventually improve as the wider economy picks up. Despite the current tough conditions, the truck business has been performing well.
Waugh says improved outcomes in the agricultural sector – driven by a continued positive dairy outlook and its related strong returns, together with a better level of demand in the red-meat sector – has contributed to a solid recovery in Colonial’s tractor business, an industry that remains “fiercely competitive”.
Agricentre South sold the Kubota business in November to focus on its core New Holland and Case IH heavy-tractor franchises. The sale included the North Road property in Invercargill.
Also on the property front, Hutchinson Motors has opened a new leased facility in Detroit Place, Christchurch, which has replaced the previous inner-city site on St Asaph Street.
The new facility trades under the banner of “Team Hutchinson All Makes”. The aim is for it to provide a much-needed capacity boost for used cars and new-vehicle preparation support functions.
Waugh says while the heavy-truck market remains subdued, Southpac Trucks continues to see growth opportunities for its parts and service network. Two new truck-related parts’ stores have been set up in Nelson and Dunedin to support local service dealers and large fleet customers operating in those regions.
He adds that maintaining Colonial’s first-half trajectory may not be a realistic prospect, but the objective remains to hold onto – if not build on – the gains of the first six months of the financial year.
That said, new-vehicle registrations in January 2026 were 8.9 per cent higher than in the same month of 2025. If there’s confidence the economy will continue a growth trend, this should reflect positively on new-car sales.
Waugh adds headwinds in the heavy-commercial truck sectors are anticipated to continue into the second half of 2025/26. At the same time, disruption from new-vehicle model changes and a weak New Zealand dollar have the potential to impact trading results.
