AHG bullish on Refrigerated Logistics despite writedown


Transformation program and parent hails improved performance

AHG bullish on Refrigerated Logistics despite writedown
Refrigerated Logistics outlook seen as positive

 

Automotive Holdings Group (AHG) has warned the market of a non‐cash impairment of $226 million in its half‐year results, a quarter of which involves its refrigerated arm.

The brunt of the writedowns affects the company’s Franchised Automotive business unit to the tune of $147 million, while 79 million is down to Refrigerated Logistics (RL), impairment charges, the ongoing half‐year audit review process reveals.

Relating to "automotive retail franchises, goodwill and intangibles", AHG sees it as reflecting "soft market conditions across the automotive retail sector" and "some underperforming brands and locations".

Action to deal with changed circumstance will lead to unusual items of $38 million being recorded in the half‐year results.

"As part of the audit review process, the Board has also decided to make a non‐cash adjustment to the carrying value of the Refrigerated Logistics division," AHG says.


Read how AHG saw its refrigerated logistics performance in a tough market, here


Otherwise, the company retains confidence in the RL unit, the sale of which fell through last year.

"The transformation program to combine the four brands as a single national operating unit is now complete and the Refrigerated Logistics management team is delivering an improved performance and has a strong business development pipeline," AHG MD John McConnell says.

"The underlying fundamentals of the RL business are in line with the previous half‐year and the outlook remains positive.

"This impairment reflects a mechanical assessment of the carrying values of the intangible assets in accordance with the relevant accounting standards."

Unaudited half‐year operating net profit after tax (NPAT), which excludes the anticipated non‐cash impairments and unusual items, is said to be in line with AHG’s internal expectations for the half‐year.

 

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