The Colonial Motor Company Limited (NZX: CMO) Annual Meeting

Friday 6th November 2020

Chairman’s Address

Revenue for the second half of the year was down 24%, 17% for the full year, with the worst month, April, down 82% on the previous year. Despite the revenue drop, employment was retained, total employees at the end of June was 965, only 3% down on the same time 12 months earlier. Total remuneration paid for the full year, including the wage subsidy, was actually up, from $75.9 m to $76.1m. The wage subsidy received during lockdown contributed around 40% of the actual remuneration costs for the period. The revenue bounce after lockdown ended started unevenly, but soon was stronger than expected. Revenue in March, April, and May were all materially down, but June revenue was only down 2% on the previous year.

Revenue in the first quarter this year, covering July, August and September, is down by the same 2%. We have bounced back to a level of revenue that is similar to last year. But we have not recovered the revenue lost during lockdown or the periods immediately before and after. The significant revenue lost in March, April and May has not been recovered.

The market post-Covid is different to the immediate past. There are very few new rental cars, so total industry numbers, comparing this year with last year, give a confusing picture. Near new used vehicle sales are strong, the complete reversal to predictions back in April. It all adds up to good numbers, but it could all suddenly slow down if consumer confidence is hit again. But for now, to use a concept that is familiar to salesmen, buyers are buying, not just looking. Its day-by-day trading, but it adds up.

There are two key strengths that helped the Company through the last six months. One is the strong balance sheet and the other is the depth and experience of its management.

See the links below for more details:

Chairman's address to the 102nd Annual Meeting

Annual meeting resolutions 6 November 2020

Source: The Colonial Motor Company Limited

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