Refrigerated Logistics division sale process starts formally
Automotive Holdings Group’s (AHG’s) last annual results are marked with red ink, just as it is being consumed by rival AP Eagers.
Net profit plunged from $63.88 million last financial year to a $125.7 million loss this year as “unusual items” worth $184.42 million, compared with $11.36 million last year, hit the bottom line.
The Truck division saw returned a profit before tax of $6.89 million on revenue of $600 million, up from last year’s $6.53 on $563 million.
“Given the increasing contribution from, and scale of, the Trucks business, the company has decided to report this segment separately,” AHG says.
“The business’s strong brand portfolio and relationships with major customers helped to deliver significant increases in revenue and earnings compared with FY2018.”
Read AHG’s advisory on the accounting review’s impact, here
The company’s freight arm, Refrigerated Logistics (RL), is now counted a ‘discontinued operation’, with a buyer still being sought formally and expected to be found in the next 12 months.
“AHG has been encouraged by the level of enquiry received in relation to the RL division
It confirms an earlier guidance statement flagging a restatement of the division’s results,” it says.
“AHG, with the assistance of external advisors, conducted a receivables review following extensive upgrades to the Refrigerated Logistics division’s computer systems,” it says.
“Luminis Partners and UBS are advising AHG on the sale process”
“The receivables review has shown a material overstatement of revenues in FY2018 which arose as a consequence of complexities associated with, amongst other matters, the introduction of the new computer systems for transport management.”
Under new accounting guidelines, RL’s loss before tax was $117.43 million on $573.63 million of revenue loss before tax of $63.85 million on $580.31 million of revenue a year earlier.
As a result of the restatement, the company has further written-down the carrying value of the Refrigerated Logistics division by $24 million,” it says.
Much of the issue is related to changes to national accounting standards on the measuring of financial assets and revenues.
“The result reflected the challenges associated with, amongst other matters, the implementation of new computer systems for transport management, the disruption caused by the aborted HNA sale process and weaker than expected trading conditions across the reporting period,” the parent company says of the division’s performance.