AHG puts financial pedal to the metal

Purchases help revenues rise 103 percent despite impact of Queensland floods and Japanese natural disasters

August 29, 2011

Automotive Holdings Group (AHG) has recorded a stunning 95 percent rise in net profits to $52.4 million in the last financial year.

But the performance was tempered by a non-cash impairment of $19.9 million, mostly related to the impact of floods on its Queensland parts distribution operation, the car and truck retailer says.

In the face of tough times in the truck market, AHG saw revenues balloon to $3.34 billion, a 103 percent rise.

"This was a pleasing result in the face of challenging market conditions, including new vehicle supply disruptions related to the Japanese tsunami and Queensland floods," Managing Director Bronte Howson says.

The purchases of Coventry’s automotive parts business in Western Australia and Harris Refrigerated Transport in South Australia were completed last month.

Harris cost $32 million including hire-purchase and lease liabilities of $15.3 million, while the Coventry parts business came to $31.5 million.

"The Harris and Covs acquisitions significantly increase the scale of the Logstics division and present exciting opportunities to drive efficiencies and earnings growth," Howson says.

AHG’s Logistics division delivered record revenues and earnings before interest, taxation, depreciation and amortisation for the full year.

Revenue increased 7.8 percent to $412 million while operating1 EBITDA was up 6.6 percent to $29 million.

The division continued its growth strategy with Rand opening two new cold storage and transport facilities in Melbourne and Brisbane, the company says.

The expertise of Harris "in road transport will complement Rand’s existing rail capability and allow it to expand its fresh produce, and frozen and chilled product offering", Howson says.

"Similarly, AMCAP will broaden its product and customer base, benefiting from Coventrys’ automotive and mining parts business including its extensive branch network throughout WA."

Rand’s new Melbourne and Brisbane helped the Transport and Cold Storage segment to a 20.6 percent lift in revenue to $201.6 million.

For the future, Howson was quite bullish.

"In Logistics, we have a clear focus on delivering value and earnings growth from our acquisitions with dedicated integration teams in place for both Harris and Covs," he says.

"The expansion of our cold storage facilities in FY11 provides a solid foundation for future growth with additional cold storage facilities due for completion in late 2012."

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