Company lifts half-year profit in the teeth of 'unfavourable' market while noting below-trend sales and pent-up demand
September 1, 2011
Despite a dire heavy vehicle market, car and truck retailer AP Eagers reported a 24.7 percent rise in net profit after tax for the first six months of 2011.
AP Eagers recorded a profit of $19.7 million, up from $15.9 million in the corresponding period the year before.
Revenues rose 36.8 percent to $1.16 billion.
The result comes in the face of what AP Eagers described as a difficult period in truck sales and car supply delays from Japanese manufacturers due to the earthquake and tsunami.
“The Adtrans National Truck business performed poorly during the half year, reflecting a subdued heavy commercial vehicle market and an unfavourable point in the model cycle for a number of brands,” the company says.
It has formed a Truck Franchise Retailing operation, following last October’s acquisition of the Adtrans Group, which had generated a profit before tax of $1.3 million in the 2011 half.
It added that the sector “remains difficult, reflecting weakness in the retail, transport and construction-related markets, with volumes reduced by 10.3 percent on already low 2010 levels”.
On the positive side, the company does see a likely upturn in the offing but not before the end of the calendar year.
“Demand for heavy commercial vehicles remains well below long-term trends and, at some point, we expect there to be a realisation of the pent-up demand in the sector,” it continues.
“Given the current economic weakness in the retail, transport and construction sectors, this recovery is unlikely to become apparent until 2012 at the earliest.”
Meanwhile, the company revealed that the Daimler Trucks dealership in Adelaide, the purchase of which surfaced in early July, cost it $2.4 million.
“This will see us represent Mercedes Benz, Freightliner and Fuso product, including buses and vans, at our existing Regency Par, Adelaide, site.”
The firm’s 20.8 percent stake in MTA Insurance returned a net profit of $400,000 compared with the corresponding period last year, while its previous 27.9 percent stake in Adtrans had garnered $1.19 million the previous year.
