Auckland drags down Colonial Motors half-year

By Phil Boeyen, ShareChat Business News Editor

Wednesday 14th March 2001

The competitive Auckland auto market continues to weigh down Colonial Motors (NZSE: CMO) with the company recording a much lower interim profit.

For the six months ended December CMO made a profit of $2 million, down from $4.3 million for the same period the previous year.

Although trading profit only fell slightly, to $5.06 million compared with $5.2 million, the company says its investment in Auckland Auto Collection performed poorly in an extremely difficult Auckland metropolitan market.

"Its performance was influenced by a number of its own non-recurring items, including the closure of two major dealership sites and all the costs this entailed, together with the write-down of one of those sites to its realisable value for subsequent sale," the company says.

CMO says another reason for the lower comparative profit figure is that it had no non-recurring unusual items arising from property sales in the period whereas the previous year was boosted by $641,000.

Interim sales rose 15% to $166.9 million, which the company says reflects its exposure to the South Island market and provincial New Zealand in general.

It says the heavy truck industry also had a particularly strong year, and increased vehicle prices, driven by exchange rates, added further to the revenue growth.

CMO says it is working with the other shareholders of Auckland Auto Collection to overcome the difficulties being experienced, and it expects a return to profitability for the new financial year.

A fully imputed interim dividend of 6 cents per share, totalling $1.671 million, will be paid.

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