STORMY SKIES BUT A RECORD PROFIT

Written on the 25 February 2015 by Laura Daquino

STORMY SKIES BUT A RECORD PROFIT

A BRISBANE-BASED automotive group has come through a stormy season for retail and in a literal sense to post a record full year underlying NPBT of $102.8 million.

A.P. Eagers Limited (ASX: APE) has posted an underlying NPAT of $79 million, an increase of 22 per cent from the 2013 full year, and an EBITDA increase of 12.9 per cent to $138.1 million.

Continued increases in used car profitability and related finance/insurance outcomes, improved NSW car dealership trading results, recent acquisitions and gains on sale of businesses and property "more than offset a disappointing truck division result" for APE over the reporting period.

Truck retail's profit contribution dropped from $8.4 million in 2013 to $3.5 million.

APE managing director Martin Ward says he expects this positive trend to continue, adding that replacement and repair activity for vehicles damaged by the late November Brisbane hailstorm will be a benefit to trading in the first quarter of 2015.

The majority of insurance claims for the event had been paid as at the end of December 2014.

"The storm was the single biggest storm to affect motor vehicles for a long time and also affected our own caryards," says Ward.

"We are fully covered in insurance to the point of covering all losses and damage on those vehicles and to be fair we will see the benefit over the next 12 months of insurance claims paid to the company."

APE was unaffected by Cyclone Marcia last week, with its caryards only located as far north as the Sunshine Coast in Queensland.

In the past calendar year, APE acquired Ian Boettcher Motors in Ipswich in July, followed by the Craig Black Group in October and Great Wall.

These groups combined are expected to increase annual group sales by around eight per cent.

"Our track record over the last decade shows significant growth in most years," says Ward when asked about further acquisitions in the next year.

"We are usually reviewing a significant number of acquisitions." 

While used vehicle purchases were on the up for APE, new vehicle sales have seen a decline almost Australia-wide over the past year, with only New South Wales reporting increased sales at 1.5 per cent.

However, luxury brands Audi, BMW, Mercedes Benz, Land Rover and Porsche all recorded record annual sales as their lower priced offerings captured market share.

A fully franked dividend of 18c per share will be paid to APE shareholders on April 27. This takes the total dividend based on 2014 earnings to 27c per share, up from 23c in 2013.

 


Author: Laura Daquino Connect via: Twitter LinkedIn

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