Friday 28th May 2021
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NZ Automotive Investments Limited (NZAI) today reports full year earnings to 31 March 2021 (FY21), achieving NPAT slightly above guidance and delivering a strong dividend yield, demonstrating the ongoing profitability and resilience of the business.
FY21 revenue and income2 of $66.1m decreased by $10.3 million on FY20, with an estimated $7.4 million due to the effects of Covid-19 (NZAI could not fully trade for 68 days or 19% of the year) and a further estimated $6.9 million due to the impact from closing five less profitable dealerships. These revenue reductions were offset by growth of $3.3 million in the underlying 2 Cheap Cars retail business as well as $0.7 million growth in finance income from the automotive finance business (NZ Motor Finance).
The Board of Directors are pleased to declare a dividend of 5.0 cps for FY21, to be paid on 17 June 2021. The dividend represents 60% of underlying net profit after tax1 in accordance with the Group’s dividend policy. This represents a gross dividend yield of approximately 6.5% based on the share price of $1.07, being the closing price on 27 May 2021. The record date will be 9 June 2021.
In the second half of FY21, sales volumes from existing dealerships recovered to FY20 levels. Group second half FY21 revenues of $35.5m versus $37.2m in the second half of FY20 were based on a reduced dealership footprint and the effects of the February/March lockdown in Auckland.
NZAI’s long-term strategy is to leverage its retail business to build a diversified automotive services group. NZAI’s automotive finance business will continue to be a focus area for growth.
CEO David Page said: “NZAI remains focused on the digital transformation of the business and its processes, as well as growing and investing in our team, securing relevant partnerships and maximising operational efficiency.
“Growing the automotive finance business loan book will continue to be a key focus. We also have a long-term strategy when it comes to electric and hybrid vehicles – this will be an area of focus to grow market share, and we will be looking to leverage opportunities with electric and hybrid vehicles over time.”
Demand remains strong for used vehicles across 2 Cheap Cars dealerships in April and May 2021.
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