AHG managing director, John McConnell, said the future remained strong because of the company’s broad-based growth that had mitigated much of the downturn experienced in the WA market.

“We’ve seen strong automotive growth in NSW and New Zealand, and above average growth in Queensland and Victoria which, with the contribution of recent acquisitions, has increased the automotive operating earnings before tax to $88.6 million, up 10.3 per cent,” he said.

“As expected, the first half result in Refrigerated Logistics was in line with the trend we saw in the second half of the 2016 financial year.

“The transformation program is expected to deliver stronger earnings in the second half.”

Mr McConnell said AHG remained focused on growth and cost control and “would continue to monitor underperforming businesses with a view to turnaround or divest as required”.

In his outlook for the next six month, Mr McConnell said he expected the Automotive division to continue to deliver a strong performance.

“The second half will also see the further expansion of the easyauto123 warehouse model,” he said.

Mr McConnell also used the announcement of the financials as a chance to comment on the recent ASIC and ACCC reviews.

“The current reviews of finance and insurance commissions, once finalised, will most likely lead to industry-wide changes to revenue mix and cost base at dealership groups and the relative shares of vehicle sales margins, finance and insurance sales, aftermarket and vehicle servicing,” he said.

“We expect these changes to commence across the industry after the current financial year with an extended transition period.”

But Mr McConnell said he did not expect this to change his company’s position.

He said AHG would remain as one of the best places for consumers to buy a new or used vehicle and complementary products and after-sales support.

“In Refrigerated Logistics we expect to see significant savings and margin improvement from the transformation program and there are strong prospects for increased revenues from new contracts,” he said.

“We also anticipate a solid finish to the financial year from the Other Logistics division.”

As announced in November, AHG said it continues to expect to deliver an increased  full year net profit over the 2016 financial year.

By Neil Dowling