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MARTIN Ward has announced that he has resigned his post as long-serving CEO and managing director of Australia’s biggest car retailer, Eagers Automotive Ltd.

Mr Ward immediately handed the reins to his right-hand man, Keith Thornton, and said he will now become an advisor to the board and to Mr Thornton.

The timing may not have been better. Eagers concurrently posted a substantial $209.4 million operating profit before tax for 2020, more than double the $100.4m earned in the 2019 year. It came on revenue of $8.75 billion, up from $5.82b in 2019.

Mr Ward has previously told GoAutoNews Premium that he was unlikely to leave the company until his “dream” – the BNE Auto Mall at Brisbane Airport that is dominated by Eagers’ franchised operations – was cemented. The first stage of the 9.0-hectare mall is expected to open later this year and Eagers has 6.14 hectares allocated to 12 of its franchises.

Mr Ward has been CEO of Eagers – then AP Eagers – for 16 years. His new role as an advisor will move him away from day-to-day operations and into concentrating on the company’s $470m portfolio of owned properties, its leased real estate and the BNE Auto Mall.

Mr Thornton, who has been with the company for 18 years including the past three years as chief operating officer, has worked closely with Mr Ward since 2005.

Keith Thornton

Eagers said in a statement that the shuffling of the executive chairs will not change the commitment to its Next100 strategy that covers new and used-car sales and an enhanced customer experience.

The company reported that 2020, the first full year of the integrated Eagers and AHG entity, was disrupted by COVID-19 but the growth in vehicle sales demonstrated the strength of its national footprint.

“Pre-owned vehicle strategy delivered strong year-on-year growth with the last seven months of the year delivering both profit and an enhanced customer offering including a new ‘click and collect’ channel and online finance product,” the company said in its statement to the Australian Securities Exchange.

“Vehicle sales rebounded strongly from the historical lows experienced during April and May 2020 when government-mandated COVID-19 restrictions were in place nationwide.

“Customer orders have continued on their strong trajectory and supply constraints caused by global manufacturer factory closures and reduced production capacity have started to ease as demonstrated by growth in national vehicle deliveries in November and December 2020.”

Eagers said cost reductions of $100 million and the synergies of the Eagers-AHG merger, which produced $35.8m in savings, were better than expected.

Martin Ward

There were also significant bottom-line benefits from the sale of the former AHG-owned Refrigerated Logistics business and the agreement for the sale of the Daimler truck operations and an associated real estate site.

But the company incurred non-cash impairments of $90.7m including leased assets associated with the exit of Holden; a restructuring of its dealership portfolio; and downward property valuations in South Australia and Queensland.

On Holden, it said: “Agreement reached with General Motors with compensation amount being less than the impact of the Holden-related impairment.”

Mr Ward said: “Despite the COVID-19 disruptions during the period, we made substantial progress on a number of key strategic initiatives including further simplification of our business through divestments and unlocking value in our property portfolio.

“Eagers Automotive maintains a strong balance sheet and has the scale, geographic diversity and right team in place to withstand further challenges and accelerate our Next100 strategy to extend our leadership position in automotive retail.”

The board has reinstated its dividend payment – suspended at June 30, 2020 – and will pay a final dividend for the full 2020 year of 25 cents per share fully franked. In the 2019 year it paid 25.3c/share.

By Neil Dowling

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