MTO racing ahead on increased market share, revenues
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Despite challenging market conditions, Motorcycle Holdings has delivered strong revenues and a bigger share of new motorcycle sales during the 2022 financial year.
Revenue was up 7% to $462.6m while gross profit climbed 3% to $132.4m thanks in part to a 6% increase in new motorcycle unit sales to 14,039 and a 10% increase in used motorcycle sales to 10,374 units.
Wholesales accessory external sales also increased by 7% to $43.2m on strong demand in both halves of the financial year.
During the financial year, Motorcycle Holdings (ASX:MTO) secured about 12% of national new motorcycle sales, up slightly from the 11.9% share in the previous financial year.
“Our full year performance demonstrated the strength of our geographic scale and diversity which enabled us to capitalise on market demand across the regions where we operate, and mitigate the impacts of localised COVID-19 government lockdowns and flooding in NSW and Queensland,” managing director David Ahmet said.
“Strong demand for new and used motorcycles continued throughout the period, driven by favourable economic conditions and changes in consumer behaviour because of the pandemic.
“Our national pre-owned motorcycle strategy has also continued to deliver profit growth.”
Ahmet added that the results also highlighted the benefits of its growth strategy with both Forbes and Davies in New Zealand and Wide Bay Motorcycles, which were acquired in early 2022, contributing to earnings.
“Australia’s underlying motorcycle market conditions remain positive at present, and we still have a large order book of presold motorcycles,” Ahmet added.
“While the cost of living for consumers is rising, employment and the labour market remain strong, and household savings built up over the COVID-19 period are providing a buffer.”
He also believes that high prices at the pumps and increased traffic congestion will actually help drive motorcycle and scooter sales.
This is likely due to their frugal use of fuel and ability to dodge traffic congestion, which would lower cost of living while reducing the amount of time road users spend in traffic.
“While supply chain challenges are ongoing, particularly for new motorcycles, we are hopeful that supply will improve over the next 12 months.”
Other sources of growth include the first full year of earnings from Forbes and Davies, and Wide Bay Motorcycles.
Motorcycle Holdings is also continuing to review a pipeline of dealership acquisition opportunities and is also investigating expansion into industry segments which it does not currently operate.
This article was developed in collaboration with Motorcycle Holdings, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions