That’s a 25 per cent increase on October when the company said it expected underlying earnings of $20 million and a 66 per cent increase on last year’s profit.
Motorcycle Holdings’ share price has also taken off. Since the lows of 60 cents in March, MTO has climbed to $2.53, a rise of 320 per cent, but this still well below its highs in 2018 of $5.20. Its shares jumped 7 per cent this morning.
Underlying the company’s forecast is a boom in both bicycles and motorbikes. E-bike sales are soaring globally and in Australia, they have increased from 7000 in 2017 to about 50,000 this year, with stores now reporting severe shortages and wait times of three months for new stock.
A beneficiary is 99 Bikes, a company part-owned by Flight Centre. It opened its first bicycle shop in Brisbane in 2007 and now has 49 stores across Australia. Earlier this year it reported sales of 1500 bikes a day.
MTO managing director David Ahmet said sales had reversed the trend of the past four years and the company was now facing a shortage of used bikes which had restricted volume growth but had been very good for margins.
The renewed interest in both forms of biking could also be attributed to people not wanting to use public transport because of the increased risk of catching the virus.
Google’s mobility data shows a dramatic fall in the use of public transport across Queensland which has also been attributed to the increased sales in used cars.
The Brisbane City Council has also bowed to the demand for e-bikes and will replace its normal bikes in its City Cycle program with e-bikes.
MTO said that given the “exceptional” trading conditions care should be taken by investors who may use the profit as guidance.