Colonial Motor Co's 1H result steady despite increased new vehicle sales

The Colonial Motor Co, the listed motor vehicle distributor, posted a 0.8 percent increase in first-half net profit despite increased industry sales, due to competition biting into margins.

Net profit rose to $12.9 million in the six months ending Dec. 31, from $12.8 million in the previous corresponding period, the Wellington-based company said in a statement.

Revenue at $410 million, including the contribution from Jeff Gray BMW, was up 15 percent on the same period last year while trading profit after tax of $8.35 million was down 3 percent on last year's record result. There were record sales of new vehicles last year, up 15 per cent to 127,179, but while industry sales continue to grow, the pace of growth has tapered off, the company said.

"Our dealerships have experienced an even more competitive market which has impacted on profitability. Heavy trucks, on the other hand, have continued with growing sales and profitability," it said in a statement.

The forecast drop in dairy payouts has also impacted on its tractor business.

The Jeff Gray BMW and Mini business was bought in August last year, with the move into the luxury sector not in direct competition with the company's existing Ford and Mazda dealerships.

The board declared a fully imputed interim dividend of 13 cents per share, totalling $4.25 million, unchanged from the same period last year. The dividend will be paid on April 20, with the record date on April10.

The shares were unchanged today at $6.41, nearly 31 percent up on a year ago.