AHG annual results records keep tumbling


Refrigerated Logistics division comes to the party as Scott’s and JAT give full year contributions

AHG annual results records keep tumbling
Bronte Howson says logistics investment cycle is all but complete.

 

Automotive Holdings Group has brushed away economic impediments to report record annual results.

Milestones fell for revenues, up 10.8 per cent on last year to $5.2 billion, leading to record profits after tax of $94.2 million, up 20 per cent.

There was encouraging news on the refrigerated logistics side too, with its Scott’s Refrigerated Freightways and JAT Refrigerated Road Services acquisitions able to provide a full-year contribution.

But it was a record revenue performance of $4.27 billion from the car retail division that underpinned the outcome.

AHG’s Refrigerated Logistics division contributed revenues of $609.1 million, up 41.7 per cent, and profits before tax up 42.8 per cent to $20.2 million.

The ongoing integration of Scott’s and JAT, acquired in FY2014, delivered increased revenues and opportunities to focus on cost and operating synergies within the Group.

"The result reflects weaker transport volumes across the industry and the impact of the Group’s investment cycle in acquisitions and new facilities, which is now largely complete," AHG managing director Bronte Howson says.

"We are pleased with the margins given the business is still in the process of a substantial transformation program to upgrade technology platforms and further leverage operational efficiencies."

Howson adds that the focus for this financial year will "largely be on greater integration of operations and facilities to drive further efficiencies and synergy savings", with the company saying last year was marked by "difficult market conditions with reduced transport volumes"..

Though it is open to acquisitions elsewhere, AHG says the investment cycle of logistics business acquisition and facility expansion is coming to an end.

At 60 per cent utilisation by June 30 and forecast to be around 85 per cent next month, Its new Erskine Park facility in Sydney was was "ahead of expectation".

The group’s Other Logistics division, with encompasses Genuine Truck Bodies  and VSE Solutions (GTB/VSE) and aftermarket firm Covs Parts saw revenues decrease 13.3 per cent to $365.2.

Howson says this was due to a number of factors including a "change by Mitsubishi in its parts distribution model in Western Australia [that] reduced AMCAP revenues, the [Australian dollar/Euro] exchange rate negatively impacted KTM and Husqvarna imports, and the downturn in the broader bus and truck market had a negative effect on the operations of GTB/VSE and WMC."

The $43-$45 million Covs sale to GPC Asia Pacific, which includes a vehicle supply deal to GPC, is due for completion next month, while GTB/VSE will undergo a restructure.

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