Vehicle seller sees revenues soar but profits dip slightly
There is confidence at AP Eagers that it will stay in the black despite a Covid-roiled market.
Fresh from divesting the refrigerated logistics operations it inherited from the AHG takeover, the car and truck retailer, which has annual results on a calendar year basis, sees half-year revenue double to $4.15 billion but profits slide 2.1 per cent to $41.5 million.
It costs the pandemic impact roughly at about $12.6 million reports post-AHG merger annualised synergies of $35.8 million, exceeding the targeted $30 million and within the targeted timeframe.
Read how AHG Refrigerated Logistics was sold to Anchorage, here
While car sales make up the lion’s share of its business, truck sales aided the bottom line.
“The National Truck division delivered a statutory profit before tax from continuing operations of $8.1 million compared to a profit of $5.1 million in 1H19,” the firm reports.
“The statutory profit before tax was impacted by government wage subsidies totalling $2.8 million recognised for the period.
“Underlying operating profit before tax was $6.2m, an increase compared to $5.2 million in 1H19, reflecting AHG’s contribution.”
Truck retailing brought in $451 million in sales, up from $212 million in the first half of last year.
The federal government’s wage subsidy for that arm totalled $2.8 million.
Given the revenue rise, a bullish outlook is unsurprising.
“Despite the disruption and challenges presented by Covid-19, we were able to increase our share of the new vehicle market and deliver a profitable half year result,” MD and CEO Martin Ward says.
“Our financial performance was testament to the company’s swift response to the pandemic which included right-sizing our operations, managing our cost base, fortifying liquidity – all while continuing to serve our customers and partners and protecting our people.”