Results for announcement to the market
Name of listed issuer: The Colonial Motor Company Limited
Reporting period: Six months to 31 December 2016
Corresponding reporting period: Six months to 31 December 2015
This report has been prepared in a manner which complies with New Zealand equivalents to International Financial Reporting Standards and gives a true and fair view of the matters to which the report relates.
The report is based on unaudited financial statements.
Consolidated Statement of Financial Performance
Current half year $ million Up/(down) % Previous corresponding period $ million
Trading revenue $437.461 (0.3%) $438.784
Total operating revenue $438.193 (0.2%) $438.989
Operating profit $15.244 10.1% $13.844
Adjustments to value of property & intangibles ($0.306) $1.072
Net profit before tax $14.938 0.1% $14.916
Taxation $4.394 15.8% $3.794
Profit after tax $10.544 (5.2%) $11.122
Net profit for period attributable to shareholders $10.032 (5.1%) $10.572
Profit attributable to non-controlling Interest $0.512 (6.9%) $0.550
Profit for the period $10.544 (5.2%) $11.122
Basic earnings per share (cents per share) 30.7 (5.0%) 32.3
Diluted earnings per share (cents per share) 30.7 (5.0%) 32.3
Net tangible assets per share $5.03 9.1% $4.61
INTERIM DIVIDEND
Fully-imputed dividend cents per share 13.000
Imputation credit cents per share 5.056
Supplementary dividend (where applicable) 2.294
Payment date 18 April 2017
Record date 07 April 2017
The Directors are pleased to announce the unaudited results for the six months to 31 December 2016. Trading profit after tax of $10.270m is again a record high, up 8.9% on last year’s result.
The new vehicle industry for the full year 2016 grew by 9.5% over 2015 to a new all-time record of 146,753 registrations. The market growth favoured light commercials and SUVs at the expense of the traditional sedans and hatchbacks. Ford with the Ranger light commercial, and Mazda with its SUV models (CX3, CX5, and the new award winning CX9) continue to benefit from these trends. Both Ford and Mazda increased their market share in this growing market. The Ford Mustang stands out as a niche product that has brought panache to the brand. Our trading profitability is helped by a rising market, but it is not a direct link. The extra heavy truck market declined in both 2015 and 2016 from the peak 2014 volume, however Southpac Trucks has increased its share of this market.
Jeff Gray BMW
As announced last year, the Jeff Gray BMW and MINI dealerships were sold following BMW NZ’s decision not to renew the dealer agreement. BMW’s decision resulted in the company writing off $315,000 of its intangible assets with the sale of the businesses. The sale of the dealerships will have no impact on our future trading profitability.
Developments
Construction has commenced on Southpac Trucks’ new parts and service facility at Te Rapa, Hamilton. This is expected to be completed in the middle of 2017. A new leased service facility for South Auckland Motors at Takanini is expected to be completed before the end of 2017. The company has committed to a new site, subject to resource consent, for Macaulay Motors in Queenstown which will double our Ford and Mazda service capacity in the growing Queenstown Lakes District market.
Outlook
The total new vehicle market continues to grow and there are strong forward orders for heavy trucks. Those parts of our business that are reliant on the agricultural economy are beginning to see signs of an uplift. The outlook for the immediate future is positive. However, in contrast to the previous year, trading profit in the six months to December 2016 was stronger at the beginning of the period than at the end. In addition, there is heightened risk that international events could impact on consumer confidence which is so essential to our success.
