Automotive Holdings Group has skidded to a first-half loss, scrapping its dividend and cutting its guidance after a flagged $223 million writedown against its struggling franchised and refrigerated logistics businesses.
The group on Friday reported a statutory loss of $226 million for the six months to December 31, down from a $40.7 million profit a year ago.
But investors appeared to be expecting worse, with shares in the company surging more than 11 per cent to $1.95 at 1023 AEDT, well past the $1.78 price before the impairments were revealed last week.
FAHG's automotive retail operations copped a $144.6 million hit, and its refrigerated logistics operations were written down to the tune of $78.8 million, while $29.1 million in one-off costs were related to restructure and trading losses on closed operations, as well as IT impairments.
A further $23 million in restructuring costs are expected in FY2020.
Revenue for the first half was up 1.7 per cent to $3.22 billion.
AHG managing director John McConnell said the result reflected tough retailing environment and regulatory changes to finance and insurance.
"To manage through the current cycle, we are taking a disciplined approach to address costs across the business, including headcount, the expansion of shared services and the reduction of non-floorplan debt to strengthen the balance sheet and to position the company for the future," he said.
AHG announced has commenced a strategic review of the refrigerated logistics business and has appointed UBS and Luminis Partners as joint financial advisers.
"The review will consider all options to maximise value for its shareholders," the company said.
AHG will not pay an interim dividend, having paid a fully franked 9.5 cents per share a year ago, and cut its full-year guidance to an operating net profit of $52 million to $56 million, previously $56 million to $59 million.
AGH PROFIT SKIDS ON WRITEDOWNS
* Net loss of $226m vs $40.7m profit a year ago
* Revenue up 1.7pct to $3.22bn
* Interim dividend suspended vs 9.5 cents a year ago
Share
