Colonial Motor Co shares climb to month-high after profit upgrade
Colonial Motor Co [NZX: CMO] shares rose to the highest in a month after the listed motor vehicle distributor said it expects to post a record profit in 2016.
The shares rose 1.6 percent to $6.30 after the Wellington-based company said strong sales of Ford and Mazda vehicles in the year would push trading profit to a "record result" in the 12 months ending June 30, beating the $16.3 million it posted in 2015 and its previous record of $19.3 million a year earlier.
"The new vehicle industry in which we operate has achieved all-time record levels and, in the first six months of this calendar year, new vehicle sales have grown by 5 percent over the comparable period of the previous year," chairman Jim Gibbons said in a statement. "Our volume brands, Ford and Mazda, have both achieved share growth in this rising market. The Ford Mustang, Ford Ranger, New Zealand's number one selling vehicle, and Mazda CX5 have been at the forefront of this growth."
The company had previously signalled 2016 earnings and dividends would be on par with 2015 as growth at city dealerships offset dwindling demand in rural areas contending with the slump in dairy prices.
Motor Industry Association figures yesterday showed new vehicle sales were at their highest level for a June month for 34 years, helped by demand at the National Agricultural Fieldays.
Colonial Motor also said its heavy truck business was strong in the period.
The shares have gained 13 percent so far this year, outpacing the 7.9 percent increase in the S&P/NZX All Index over the same period.