Dealerships ,

LISTED luxury car retailer Autosports Group Ltd has posted a leap in statutory profit for the past financial year, with profit after tax up 140.9 per cent to $41.9 million.

The result compares to a loss in the previous financial year of $102.45 million. The latest profit for the 2021 financial year came from a 16.3 per cent rise in revenue to $1.978 billion for the 12 months and led to an interim dividend of two cents a share, making a total of seven cents a share for the year.

ASG shows strong performance in the luxury and prestige new-car sector which traditionally are less ruffled by economic cycles, with a close alignment with its OEMs.

GoAutoNews Premium contacted Pitcher Partners Motor Industry Services lead, Steven Bragg, for comment on ASG’s performance compared to its listed peers.

He noted that ASG was impacted more than its major peers Eagers Automotive (APE) and Peter Warren Automotive (PWR) by the Victorian lockdowns.

Mr Bragg said that while ASG’s new vehicle sales increased by 28.8 per cent in FY21, all their other department’s revenues remained relatively flat when compared to FY20. 

“While new-car sales soared, the lockdowns in Victoria undermined the possibilities of expanding the income from other departments – used service, parts, finance and aftermarket which impacted ASG’s gross margins in comparison to the other listed dealer groups,” he said.

This has filtered down to their gross margin achievement. Mr Bragg notes that ASG’s gross profit as a percentage of sales is at 17.1 per cent which is in line with APE at 18.3 per cent and PWR at 18 per cent.

He said that the normalised profit before tax, as a percentage of sales, was 3.8 per cent for ASG compared with APE and PWR at 4.7 per cent each.

Much of the potential was diluted by the lockdowns on the east coast, with the company’s statement to the ASX stating that for the current financial year and the near future “the trading environment remains uncertain” because of lockdowns.

In its statement to the ASX, ASG said: “The group acknowledges that it must remain vigilant and agile in the manner that it controls its operations.”

“The strategy and focus for FY22 will remain similar to that which was carried out in the second half of FY20. This includes preserving cash, reducing expenses and securing the future of its employees.”

ASG also outlined its acquisition and divestment strategy, announcing it has agreed to buy the land on which its Bundoora BMW is located. 

The Victorian property has been bought by ASG subsidiary Prestige Group Holdings from the site’s landlord, DMW Properties, for $18.35 million. ASG said it will save the company $1.6 million a year in rent.

ASG’s property holdings have been bumped to $76 million in value after this purchase.

The company is also developing a greenfields BMW dealership in Ringwood with construction expected to be finalised in late 2022.

On land it already owns in McGregor in Brisbane’s south, ASG will also build a Volkswagen dealership. Once the building is completed, it will vacate its existing lease of its Volkswagen McGregor dealership and move to the new site.

This year ASG bought the Brighton Jaguar Land Rover dealership in Victoria from the Stillwell Group for $3.2 million; and closed its Volvo franchises at Volvo Mt Gravatt (Queensland) and Volvo Brighton (Victoria).

By Neil Dowling

Manheim
Gumtree
Manheim
Manheim
PitcherPartners
DealerCell
MotorOne
Gumtree
AdTorque Edge
Schmick