MotorCycle Holdings is finding it hard to sell motorcycles
Usually companies try to talk up bad profit guidance, using all kinds of shenanigans to confuse and mislead.
But not MotorCycle Holdings (ASX:MTO).
Reading their latest half year results guidance you’d think the sky was still falling and crotch rockets were going the way of the dodo.
They are preparing shareholders for first half EBITDA (earnings before interest, tax, depreciation and amortisation) of $10 million to $10.5 million.
MotorCycle Holdings CEO David Ahmet weighed in, bemoaning the continuing national market decline in new motorcycle sales being reflected in the company’s performance.
And even the company’s stock reflected the Eeyore-like sentiment, dropping more than 20 per cent on Wednesday and resting at $1.58 (down 17 per cent) at 11 AEDT.
But the sky is not, in fact, falling.
That forecast EBITDA range matches what they made in the second half of fiscal 2018, when they took $10.3m.
And vastly beats what they recorded in the 18 months prior: EBITDA for the same period last year was a measly $7.4m, while the half before that was just $6m.
In August last year, Mr Ahmet spoke of a decline in new motorcycle sales of the past 12 months but said the market was stabilising and they were “cautiously optimistic” about the current year.
In spite of the dour announcement today, Mr Ahmet offered some hope for the coming year.
“The company is implementing a number of initiatives to boost sales, including a strategy to increase used motorcycle sales through MCA stores and enhancing our online presence to grow our market share of online sales,” he told investors.
“Our current activities to integrate recent acquisitions, strengthen our management team, improve processes and upgrade systems will ensure the company will benefit from improved market conditions when they return.”
MotorCycle Holdings has been contacted for comment.