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LISTED prestige dealer company Autosports Group Ltd has defied the COVID-19 lockdown with a huge 132.2 per cent increase in net profit after tax to $16 million for the half year to December 31, 2020.

The increase, compared with the corresponding period in 2019, also came with a revenue boost of 7.8 per cent to $903.7m despite a $49m hit from the lockdowns in Victoria.

The costs associated with the lockdowns included dealer backend revenue income that fell 46 per cent in Victoria.

It said that four dealerships and two collision repair sites that in the first half of 2019 generated 22 per cent of the company’s revenues, only contributed 14 per cent in the latest half year.

But against that, November and December experienced strong trade in every department, including service and parts, and new and used-car gross margins improved despite vehicle supply being constrained.

Autosports said that since its inception in 2006, the luxury car market has consistently outperformed the total market with a compound annual growth rate of 4.5 per cent against the market’s negative 0.3 per cent.

But to show how beneficial the niche market has been to the company, from 2014 through to 2020, Autosports’ compound annual growth rate has been 19.4 per cent.

The trickling of new-vehicle deliveries shrank the inventory by $148.4m compared with the first half of FY2020, said Autosports in its statement to the Australian Securities Exchange (ASX), which impacted the OEM rebate opportunity.

Its figures for the first half of the current financial year showed the period had strong cash generation with an increase in its cash balance of $22.8m.

Operating expenses slid by 6.6 per cent as the company closed its Volvo franchises at Mt Gravatt, Queensland, and Brighton, Victoria.

It finalised its purchase of Jaguar Land Rover Brighton during the period which, aside from the franchise opportunity, took Autosports’ total real estate holdings to $55m.

The company showed that it received $10.m in JobKeeper allowances and had redundancy costs of $0.3m.

Optimistically, Autosports sees this financial year as being an improvement because of post-COVID lockdown relief, service volumes showing a strong rise, and an advantage of having a consistent supply of used vehicles as new customers trade in their old cars.

By Neil Dowling

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