Perth-based Automotive Holdings Group has flagged a slight reduction in profit for the half year, but the company said it had noticed increased confidence in the Western Australian car market.
AHG reported net profit of $39.9 million, representing a 2.5 per cent dip from the previous year, while revenue was up 7.5 per cent to $2.87 billion.
In announcing the results, managing director John McConnell said there had been a noticeable improvement in sentiment towards the WA car industry.
“It is particularly pleasing to note the broad levels of increased consumer and business confidence in the WA market, which had been depressed by the sharply reduced level of construction in the resources and energy sectors,” he said.
The company will pay an interim dividend of 9.5 cents per share.
In November, AHG announced the sale of its refrigerated logistics business to Chinese conglomerate HNA Group for $400 million. Mr McConnell said the deal was being finalised, with various approvals still required.
Mr McConnell said AHG’s automotive division performed well in a challenging environment due to the lower margins available from the sale of finance and insurance products.
“Our franchised automotive dealerships are benefitting from our restructuring and cost management measures, and from continued demand for new vehicles,” he said
“While there has been pressure on margins we have adjusted our processes and costs to the new environment.”
Shares in AHG were up 5.3 per cent to $3.64 at 1pm AEDT.
