JSE-listed Combined Motor Holdings (CMH) on Thursday posted higher earnings for the six months to August 31, despite subdued economic activity and depressed business and consumer confidence levels.
Headline earnings a share rose from 98.2c in the first half of 2015 to 116.6c apiece during the half-year under review, while basic earnings a share lifted from 73.8c to 96c during the same period.
Profit for the year climbed to R71.9-million from R65.2-million in the six months to August 31, 2015.
Revenue contracted from R5.5-billion to R5.2-billion, on the back of a 12.4% decline in national new passenger and light commercial unit sales, offset by a 6.7% rise in used-vehicle sales.
However, despite the improvement in the first six months of the year, CMH did not expect trading conditions to improve during the second half of the financial year under review.
“The optimists are speculating that the new-vehicle sales levels are bottoming out and that further year-on-year declines will be limited. It is clear that new-vehicle price hikes have made purchases very expensive, despite the marketing incentives offered by manufacturers,” the company explained.
However, the company, with a strong used-car presence, can take advantage of the uptick in the increase in bank applications for used-vehicle financing, which indicates that consumers are switching from new to used vehicles, rather than not investing at all.
“While the directors do not believe that the 19% increase in headline earnings per share is sustainable for the full year, they are confident that the group will emerge favourably from a difficult trading period,” CMH said.
The group declared a dividend of 55c a share.