Global conditions take Apollo profits down a gear
29 August 2019, Written by Business News Australia
A subdued global RV sales market has seen Apollo Tourism & Leisure's (ASX: ATL) underlying profits slide by 24.6 per cent to $14.7 million.
Despite the soft profit Apollo reported record revenue of $365.2 million, up 2.7 per cent, and its global rental days hit a record of 886,000.
Globally retail sales were subdued with macro-economic headwinds encountered in all regions where the company operates.
The final months of FY19 saw some improvement in the Australian retail environment, which Apollo says has continued into the new financial year.
The group's statutory NPAT included non-cash impairments of goodwill and intangible assets totalling $11 million.
CEO and managing director Luke Trouchet says there is plenty of room for improvement at Apollo.
"While our financial result is disappointing, the overall health of the company remains strong," says Trouchet.
"Following the significant steps taken in Apollo's global growth strategy during FY18, FY19 has been a period of consolidation and integration as we invest in people and infrastructure to support our ongoing global expansion."
The group's Australian rental business performed strongly during FY19, with 434,000 rental days (up from 426,000 in FY18), and rental income of $60.9 million, up from $56.4 million in FY18.
However, the company experienced soft sales during the financial year, affecting overall earnings for the segment.
"While sales volumes have remained solid in comparison to prior year, we saw a decline in margins as a result of the relatively uncertain economic environment in the lead up to the Federal Election in May 2019," says Trouchet.
"Promisingly, however, improved sales performance in the final weeks of the year suggest that consumer sentiment has begun to improve post-election and early FY20 indicators are that this positivity is continuing."
Shares in Apollo are down 7.32 per cent to $0.38 per share at 10.57am AEST.
Business News Australia
Author: Business News Australia