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Colonial Motors feeling retail pinch

By Phil Boeyen, ShareChat Business News Editor

Tuesday 12th September 2000

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Colonial Motors has lifted its full year profit by 20% but says the retail downturn and other market uncertainties are slowing business.

CMO announced a full year net profit of $7.853 million to the end of June, 20% higher than last year's $6.54 million. It will be paying a 9.5 cents a share dividend.

The company says on a same store basis sales were up 20% over last year on the back an ongoing strong level of retail spending by consumers on motor vehicles as well as significant business investment by the transport sector in new heavy trucks.

But it says the second quarter of 2000 has seen a significant slowdown in consumer spending in the metropolitan markets of Wellington and Auckland, in line with the decline in business and consumer confidence, and higher import costs.

The company says areas such as increased ACC costs, Fringe Benefit Tax and the uncertainty and costs of the new employment law are also having a negative impact.

Revenue at $292 million was slightly down on last year's $298.5 million, due to the exclusion of the Auckland dealerships which are now part of the Auckland Auto Collection Group - a new business made up of nine previously separate dealerships.

Colonial Motor's 9.5 cents per share dividend brings the year's total to 19.5 cents a share, and represents 75% of the trading profit after tax for the year.

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