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Motorcycle Holdings expects $20m first half earnings despite Victorian restrictions
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Motorcycle Holdings (ASX:MTO) was one of this morning’s biggest winners on the ASX with a positive sales update.
Several ASX companies in the automotive trade have done better than expected during COVID-19 and Motorcycle Holdings has also managed to come out ahead.
Motorcycle Holdings owns several motorbike and motorbike accessory dealerships across Australia.
It has 48 franchises operated from 31 dealership and eight retail accessory locations across Australia’s eastern seaboard.
The company expects earnings above $20m for the first half of the current financial year.
Motorcycle Holdings told shareholders it witnessed strong sales in the first half.
“We’re certainly trading better than expected. We’re ahead of our expectations,” managing director David Ahmet told Stockhead.
Result occurs despite Victorian restrictions
Ahmet said the results came despite Victoria’s Stage 4 restrictions.
These disrupted small caps even more severely than the initial bout of restrictions in March.
Motorcycle Holdings’ warned at the time these would deliver a $9m financial hit for the six weeks Stage 4 restrictions were initially anticipated.
But the business still traded online in Victoria and stayed open to fulfil online orders. Furthermore, trading conditions in other states were enough to deliver the predicted result.
“We’ve got six dealerships in Victoria, so we had to essentially close them to all retail traffic but we could continue doing business via email and by phone,” Ahmet explained.
“The Victorian dealerships were substantially affected during that period but the rest of the business traded strongly so it still gave us a very good result.”
Motorcycle Holdings shares rose 15 per cent this morning to over $2.31.
Shares dropped to 60c in March but have rapidly recovered in the last month. They climbed 17.5 per cent on Tuesday to $2.35.
