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'Unusually strong dynamics' drives Eagers profits

Business

Brisbane-based auto retailer Eagers said its March quarter had produced a pre-tax profit of $105 million.

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The company doesn’t normally report quarterly results but the trading update was made to keep the market informed of what it said was “unusually strong dynamics” which had been characterised by demand continuing to outstrip supply.

While there was no comparison with the March quarter of last year, the company’s 2020 half-year result was for a profit of $11 million, which was significantly affected by the nationwide lockdowns.

Eagers said also affecting the March quarter performance was its ongoing cost-cutting.

The release pushed the Eagers share price to an all-time high of $15.58, a remarkable turnaround from last year’s price of $2.90.

It said it was focused on balancing the risk of changing market dynamics, its own Next 100 days strategy and disciplined cost management.

The update did not include the sale of its Daimler Truck business or the Milperra property.

It said the sale would be a key step in the simplification of the business and deliver a gain of between $32 million and $36 million.

The sale is expected to be completed in the first half.

Moody’s Analytics this week said used-vehicle prices were up 5 per cent for the March quarter and were 37 per cent higher than the pre-pandemic level.

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