AHG makes mockery of economic gloom

Annual revenues and profit soar despite automotive and logistics purchase and development costs

AHG makes mockery of economic gloom
AHG makes mockery of economic gloom
August 19, 2013

Automotive Holdings Group (AHG)
goes from strength to strength, reporting a bumper $66.8 million annual net profit, a rise of 31.9 per cent.

The result was based on record revenues of $4.28 billion from the firm’s Automotive and Logistics arms during a financial year that saw it pick up Toll Refrigerated, Coffey Ford, Newcastle and Brisbane Trucks, Bayside and Peninsula Motor Groups, and McMillan Toyota dealerships.

"In Automotive, we’ve had strong performances from our established dealerships while developing additional greenfield sites and integrating recent acquisitions, all of which provide significant future upside," AHG Managing Director Bronte Howson states.

"The focus of our Logistics division in FY2013 was on the acquisition and integration of Toll Refrigerated, the closure of the Coopers Plains (Queensland) parts operation and completing the integration of Covs, with the opening of their new state-of-the-art distribution centre."

Logistics contributed revenues of $735.6 million, up from $712.1 million last year, an increase of

3.3 per cent, and gross operating earnings rose 4.6 per cent to $48.4 million, up from the previous $46.3 million.

The $6.18 million purchase of Toll Refrigerated, which added a 20 per cent rise in revenues, and the integration of Covs and Harris helped secure the performance.

The Toll additions contributed an estimated $50 million in revenue and a net profit before tax and acquisition and integration costs of $1 million.

Against that, the closure of AHG’s Cooper Plains parts distribution operation cost $20 million in revenues.

Core refrigerated transporter Rand increased gross operating profit 10.3 per cent from $14.6 million to $16.1 million, despite "a combination of natural disasters and weak industry volumes which materially reduced stock-turns" in the second half of last calendar year.

Looking ahead, Howson reflects certainty about the space AHG has carved out in the refrigerated sector.

"In Logistics, demand from Rand’s clients for fully integrated service offerings in temperature controlled transport and storage has provided us with the confidence to invest in new facilities in Perth, Sydney and Adelaide, which will provide growth opportunities and significant economies of scale," he states.

"The contribution from the Group’s truck businesses was especially pleasing and reinforces the value of the investments the company has made in strengthening its brand presence to create greater exposure to the broader transport market."

Adding Daimler’s Brisbane and Newcastle truck operations and the Newcastle Iveco truck operations cost the firm $13.67 million in all.

They gave $86.75 million in revenues and $800,000 in net profits before tax.

Trading losses and restructuring costs in Newcastle amounted to $550,000, as the firm develops its Newcastle Truck Hub.

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