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Eagers says it can now deal with anything COVID throws at it

Business

Automotive group Eagers Automotive has boldly stated it can withstand any future COVID-19 impacts after its first half profit was slashed and it endured 27 months of declining new vehicle sales.

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But it said the second half of its financial year had started well in states without Government restrictions and it was able to support its Victorian businesses where lockdowns are still in place.

The company’s net profit fell to $11.8 million from $42 million for the same period last year and its underlying profit was down 24 per cent because of the impact of COVID-19.

No dividend will be paid to shareholders and the funds will be directed to managing further impacts from the pandemic.

The company had a $40 million non-cash impairment associated with the Holden exit from the market and received $72 million in wage subsidies and rent relief.

On a positive note, Eagers cut its costs by $78 million and increased its share of the new vehicle market despite the 27 months of falling new vehicle sales.

The Queensland market was down 20 per cent, but there was a bright spot with the market for hybrid and electric vehicles up 20 per cent from a small base.

Managing director Martin Ward said the ability to produce a profit for the first half was a “testament to the company’s swift response to the pandemic” which included reducing in size and managing the cost base

“Eagers Automotive is in a strong financial position with a significant liquidity buffer to withstand any future COVID-19 impacts,” Ward said.

“Importantly, our scale, geographic diversity and financial strength positions us to accelerate the execution of our Next100 strategy and provides flexibility to pursue restructuring and growth opportunities that arise due to the evolving market dynamics and industry transition.”

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