Stimulus Stimulates Auto Holdings

  The country's leading car dealer, Perth-based & #160;Automotive Holdings Group Ltd, showed this week that & #160;it was one of the biggest direct beneficiaries of the federal government's 2009 economic stimulus, especially the tax breaks for car purchases for small and medium businesses.The & #160;company revealed that its sales of new cars rose 6% in the December half year, more than double the 2.7% rise in industry wide new car sales in the same period.AHG shares ended up 3.9% yesterday at & #36;2.42, firming in a falling market as investors took another look at the result after its release earlier this week.CEO Bronte Howson said in a statement & #160; & quot;The Federal Government's economic stimulus package and investment allowance continues to have a positive impact on automotive sales volumes, & quot; said Mr Howson. & quot;AHG has a strong order book going in to the second half of FY10 and with consumer sentiment remaining high; sales are forecast to remain stable. & quot;Without the stimulus, it's clear the car industry and AHG would have struggled last year to find sales, let alone growth.The company said & #160;first half profit rose to & #160;a net & #36;33.6 million, from & #36;21.5 million earned a year ago.The latest net includes & #160;profit from the sale of shares in the auto website, carsales.com.For that reason the underlying profit was a better result, up a record & #36;28.7 million on group revenue of & #36;1.6 billion.The company declared a fully franked interim dividend of seven cents per share, up from four cents per share previously. (EBITDA improved 15.0% to & #36;57.9 million; while the group EBITDA margin was stronger at 3.6%, up from 3.15% previously.)CEO Bronte Howson said the underlying interim result was a record performance in improved market conditions with an increase in demand in the new and used vehicle markets, continued inventory control and consumer sentiment remaining high. & quot;The performance of our Automotive division was strong and it was encouraging to see the EBITDA margin improve to 3.05% (2.5% previously), and underlying NPBT nearly doubling to & #36;31.2 million ( & #36;15.7 million previously), & quot; said Mr Howson. & quot;The contribution from Logistics included a solid performance from the Transport and Cold Storage segment and a steady result from the Other Logistics segment despite tougher trading conditions. & quot;Underlying EBITDA for the automotive retailing division was & #36;42.9 million (123.4% pcp) on revenue of & #36;1.4 billion (100.9% pcp). & quot;AHG's used vehicle sales increased 5.4% on pcp while Parts and service remained strong. & quot;The company said its & #160;Logistics division contributed EBITDA of & #36;15.0 million (96.0% pcp) for the December half on revenue of & #36;199.30 million (96% pcp). EBITDA margin was 7.5% (pcp 7.5%). & quot;The Transport and Cold Storage segment continues to experience strong demand, reporting EBITDA of & #36;8.7 million ( & #36;9.2 million pcp) on revenue of & #36;86.2 million ( & #36;83.2 million pcp). & quot;The Other Logistics segment which comprises AHG's automotive parts, warehousing and distribution businesses, motorcycle distribution and vehicle storage and engineering contributed EBITDA of & #36;6.3 million ( & #36;6.4 million pcp) on revenue of & #36;113.1 million ( & #36;124.5 million pcp). & quot;While the Logistics division performed solidly with the Transport and Cold Storage segment and parts distribution delivering stable results, it was impacted by competitive pricing and exchange rate pressures in motorcycle distribution. & quot;AHG is cautiously optimistic about the economic outlook and general trading conditions for the second half of FY10 and expects current EBITDA margins to be sustainable. & quot;It is anticipated that national new vehicle sales will continue to trend up this year with an industry forecast of 975,000 new vehicle sales for the calendar year 2010¹ (up 4% from 937,329 pcp). & quot;Automotive Holdings Group Limited has operations in every Australian mainland state and in New Zealand.The Company is Australia's largest automotive retailer, with its major operations in Western Australia, New South Wales and Queensland.AHG also operates the Prestige Hino truck dealership in Dandenong, Victoria - one of the largest in the country.It sells & #160;all major brands of motor vehicles.It also operates logistics businesses throughout Australia through subsidiaries Rand Transport (transport and cold storage), AMCAP (motor parts and industrial supplies distribution), VSE (provides vehicle storage and engineering), Genuine Truck Bodies, (provides body building services to the truck industry), KTM Sportmotorcycles (motorcycle importation and distribution in Australia and New Zealand) and the exclusive distributorship of Vmoto Scooters in Australia. & #160;  

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