AHG revises Refrigerated Logistics arm's revenue total


Takeover target’s intent for subsidiary’s sale confirmed in review

AHG revises Refrigerated Logistics arm's revenue total
Scott's Refrigerated is part of AHG's Refrigerated Logistics division

 

Automotive Holdings Group (AHG) has a better understanding of its Refrigerated Logistics division and must revise earlier advice on that division’s carrying value of receivables.

Listed AHG, which is undergoing a takeover by rival automotive sales rival AP Eagers, has been keen to divest the division for about two years and thought it was in line for around $400 million for it before China's HNA International withdrew the offer a year ago.

Now, a six-month review, aided by "external advisors following extensive upgrades to the Refrigerated Logistics division's computer systems", has reinforced the sale decision but uncovered an $18 million pre-tax overstatement of its revenues.


Read how AHG first backed the AP Eagers takeover, here


The result is a restatement of last year’s annual results.

"The overstatement of revenues in FY2018 arose as a consequence of complexities associated with the introduction of the new computer systems for transport management," AHG says in a stock exchange statement.

"As a result of the restatement, the Company will be required to further write-down the carrying value of the Refrigerated Logistics division by $24 million."

The adjustments come as AP Eagers withdrew all "defeating conditions" for the purchase and the AHG board unanimously recommended the deal that gained Australian Competition and Consumer Commission (ACCC) approval on July 25, subject to AP Eagers divesting Kloster Motor Group in Newcastle.

 

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