Weaker market shifts guidance down a gear for AHG

Weaker market shifts guidance down a gear for AHG

Automotive Holdings Group (ASX: AHG) may see its profits fall 11 per cent on previous guidance due to issues with its retail and refrigerated logistics arms.

The company, which is in the midst of a takeover bid from competitor AP Eagers (ASX: APE), today downgraded its net profit after tax (NPAT) forecast for FY19 down from $52-56 million to $50 million.

"The revised outlook reflects the challenging conditions in franchised automotive retail volumes and margins, as well as weaker than expected April performance in AHG's Refrigerated Logistics division on the back of subdued Easter trading," the group said today in an announcement to the ASX.

"May and June are typically higher profitability months in the automotive retail sector and will have a significant bearing on AHG's FY2019 financial performance."

AHG added the end result could be impacted by a range of factors including evolving market conditions, consumer behaviour around the upcoming Australian Federal Election and any negative impact resulting from a review of its refrigerated logistics business.

AHG believes the review could lead to write-downs in the carrying value of receivables, which may have a bearing on the earnings outlook for this year but is unlikely to have a material impact on the balance sheet beyond FY19.

"AHG would not expect any of the above to impact the takeover bid from AP Eagers," the company clarified.

AP Eagers lifted its bid for the company last week to one share for every 3.6 shares in AHG, which has until this Friday to put out its target statement.

Yesterday AP Eagers announced it had lifted its stake in AHG from 51.3 per cent to just over 54 per cent.

Meanwhile, another group of investors comprising WFM Motors, NGP Investments and Sitil Management has lifted its stake from 28.8 per cent to 31.2 per cent. 

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Crypto staking: a new way to earn passive income
Partner Content
You may be familiar with traditional ways of earning passive income such as trading sto...
Etoro
Advertisement

Related Stories

SNL’s Pete Davidson to star in QLD feature film ‘Wizards!’

SNL’s Pete Davidson to star in QLD feature film ‘Wizards!’

The Australian screen sector has bagged two major wins today, with ...

Bendigo-based Apiam Animal Health saddles up with $13.8m acquisitions

Bendigo-based Apiam Animal Health saddles up with $13.8m acquisitions

Vet services business Apiam Animal Health (ASX: AHX) has gone ...

Space Machines Company partners with SpaceX for 2023 spacecraft launch

Space Machines Company partners with SpaceX for 2023 spacecraft launch

In-space transportation and logistics start-up Space Machines Compa...

Scrap metal recycler Sims picks up Brisbane port site for $88 million

Scrap metal recycler Sims picks up Brisbane port site for $88 million

In order to acquire one of the few remaining Brisbane sites with de...