Thursday 18th February 2021
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The Chairman, Jim Gibbons, confirmed that revenue was up 4.6% on the same period last year, with most of this growth occurring in the last month. Favourable trading conditions flowed through to a Trading Profit after tax up 58% on the low 2019 result and up 18% on 2018.
Mr Gibbons said that the new vehicle market for the full calendar year was down 22% on the previous year, but that disguised a stronger second half. Most of the decline in the second half was due to the absence of the seasonal concentration of rental car registrations. The business and private market available to retail dealerships in the second half of the year was very similar to the previous year.
The new vehicle market is now dominated by supply constraints. Early Covid predictions over-estimated the market decline resulting in reduced ordering of product by distributors. The subsequent faster and stronger recovery has stayed ahead of supply due to Covid related capacity constraints and supply chain disruption. The issues are widespread. Consumers have adapted and are committing to forward orders, or selecting from what is physically available. Near-new used vehicles are also affected with significant shortages.
Mr Gibbons said that Southpac Trucks successfully launched the new Euro6 range of DAF heavy trucks into a declining market and where the Euro6 emission standard is not mandatory. The New Zealand heavy truck market was down 22% on the previous year.
Mr Gibbons commented on the Government’s planned Clean Car Import Standard. It is a supply driven requirement for all new vehicle importers to meet stringent CO2 emission averages by 2025. Mr Gibbons pointed out that 95% of the new vehicles registered in 2020 did not meet the required average of 105gm of CO2/km. The ability of the importing franchisors to meet the target in the required timeframe cannot be taken for granted where the international supply of very low emission vehicles, EVs and PHEVs, is both limited and disrupted. The new technologies necessary to meet the required standard will cost significantly more than the current price ranges.
The Company has three ongoing facility developments. At Christchurch, the Team Hutchinson Ford greenway project will be completed this financial year. At Lower Hutt, the separate Ford and Mazda showrooms have been completed but other work on the site continues. At Botany, a new Southern Autos-Manukau facility for Suzuki and Isuzu will open in March.
The Directors have declared a fully imputed interim dividend of 15 cents per share.
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