Logistics drags on AHG profit

Strong vehicle sales have offset a fall in logistics earnings for Automotive Holdings Group in reporting a 1 per cent increase in net profit for the first half to $38 million.

The national dealership network had revenue for the six-month period of $2.32 billion, up 7 per cent.

Managing director Bronte Howson described the result as measured performance underpinned by solid growth in the automotive retail business, which saw a 12 per cent hike in operating earnings to $64 million.

But operating earnings for AHG's logistics arm slid 14 per cent to $25 million.

Mr Howson said the automotive division's result was strong considering uncertainty caused by the fringe benefits tax issues and last year's Federal election.

"In Western Australia where AHG has clear market leadership, there's been an easing of demand from the mining sector but our dealerships have demonstrated real growth in new vehicle sales and clearly outperformed the broader market," he said.

AHG said the logistics performance was hit by a $1.8 million move into new premises in WA and South Australia by subsidiary Rand, which also saw weaker demand for fresh goods in Queensland and NSW because of both flooding and drought.

"It's a reasonable result considering the market conditions and the necessary timing of the investments we have made in new cold storage facilities to ensure we remain focused on future growth and confident of the future returns in this sector," Mr Howson said.

AHG increased its interim dividend by 0.5 cents to 8.5 cents a share.

The company's shares were down 17 cents, or 5 per cent, to $3.53 at 8.50am.

The West Australian

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