KEY POINTS:
Listed Colonial Motor Company told shareholders today its first quarter group revenue and profit was looking slightly down on this time last year.
The Wellington-based company told its annual general meeting today that both outcomes were in line with its expectations.
Company chairman John Wylie said the last financial year had produced a satisfactory profit but the second half was less than forecast.
In August the company announced an 11 per cent rise in operating profit of $11.45 million after tax. Trading revenue for the year to June 30 was up 18 per cent at $464m.
The small car market continued to expand, prompted by concern over longer-term fuel prices and as a substitute to used car imports, which have dropped in price.
"As a group, we are retailing increased volumes of used cars compared to a year ago, but at lower retail prices."
Depreciation had also been at an unprecedented high, which had increased further for larger used cars and had required a lot of attention to stock management and trade-in prices.
During the year Colonial bought the operations of Metro Ford at Porirua and Kapiti, and sold its Johnsonville property.
It also bought land in Christchurch for a new facility for its Southpac Trucks operation, and had almost completed its building expansion programme in Queenstown.
The company bought land at Pukekohe for South Auckland Motors to build a satellite service facility.
It had yet to finalise its plans for a major upgrade of the Dunedin facility.
Colonial said rising valuations on its properties were being reflected in its accounts .
Its Southpac Trucks business had faced a challenging year, with increased used truck inventories and the exchange rate movements affecting customers' businesses.
Staff retention and recruitment had not been easy, and increased costs and intensified competition between brands would be an ongoing concern in the coming year.
Colonial said expectations in the industry were that new car and light commercial volumes would be lower in the first half of 2007 versus 2006, but were expected to recover in the second half.
The heavy truck industry was expected to continue at the lower level to the past six months, and the number of used imports coming into the country will continue to decline.
Colonial shares were untraded today but last traded at $3.20, compared with a year low in June of $2.90.
- NZPA
