Car dealer Colonial Motors boosts trading profit 18% as car sales rise

Trading profit for the year ended June 30 was up 18%.

Colonial Motor Company [NZX: CMO], which owns motor vehicle dealerships nationwide, posted a record underlying profit of $19.2 million as the nation's new vehicle industry hit the highest level of sales.

Trading profit for the year ended June 30 was up 18% on last year's $16.3 million, the Wellington-based company said in a statement, though the results are still preliminary and unaudited. Property and investment revaluations and a gain on the sale of a property lifted net profit to $21.5 million.

The new vehicle industry had a 5% sales lift on the previous year in the first six months of 2016 and CMC's two main brands, Ford and Mazda, both increased their market share. The Ford Ranger, a light commercial, was New Zealand's top-selling vehicle in the first half of the year.

CMC increased revenue to $867 million, up nearly 10 % on the previous year. Directors have declared a fully imputed dividend of 27c  a share to be paid on Oct.17 with a record date of Oct. 7 at a total cost of $13.1 million. That takes total dividends for the year to 40c per share, 7c up on the previous year.

Cash on hand was up nearly $10 million for the year.

Sales and profitability of heavy trucks were strong and forward orders remain good, despite the overall market being slightly down, it said.

The company has bought a site at Te Rapa in Hamilton to develop as a parts and service centre for Southpac Trucks and it opened a new airport service centre for Ford and Mazda in south Auckland in January where it also plans to develop a pre-delivery workshop for the dealership. The company is trying to lease a site for a further service centre in Takanini.

CMC shares are currently trading at $6.55, up 19 % since the start of the year.

(BusinessDesk)

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