Colonial Motor Co lifts annual profit 4.2%

The rise comes on the back of a car sales boom.

Colonial Motor Co, which listed on the NZ stock exchange in 1962, lifted annual profit 4.2 percent as the motor vehicle distributor continued to enjoy the nation's car sales boom.

Net profit attributable to shareholders rose to $22.2 million, or 68 cents per share, in the 12 months ended June 30, from $21.5 million, or 65.7 cents, a year earlier, the Wellington-based company said in a statement. Revenue fell 1.4 percent to $854.8 million due to the sale of its short-lived franchise agreement with the Jeff Gray BMW dealership. Still, sales volumes were up 14 percent, underpinning the company's improved profitability.

"The combination of low interest rates, strong exchange rate and new desirable technologies continues to stimulate growth in new vehicle sales," chairman Jim Gibbons said. "The outlook for both light and heavy vehicles is positive. However, as always, we are dependent on consumer confidence remaining high."

New car sales have been breaking new records in recent years as an expanding population, robust employment growth and strong tourism stoke demand for vehicles, while at the same time cheap credit and a strong exchange rate makes it easier to buy imported automobiles.

Colonial's board declared a final dividend of 31 cents per share, payable on Oct. 16 with an Oct. 6 record date. That takes the annual payout to 44 cents per share, up from 40 cents a year earlier.

The shares slipped 0.1 percent to $7.49 and have gained 7.1 percent so far this year, lagging behind the 11 percent increase on the S&P/NZX All Index over the same period.